Mexico's Softtek: Success through Nearshoring

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When Softtek began its operations in 1982, the company had access to a limited market in Mexico. It could not go beyond its country's boundaries because of the Export-Import restrictions between the North American countries. But with the implementation of NAFTA in 1994, the barriers were removed and Softtek gained access to the US market. In 1997, it began to work with its first US client and the concept of 'Nearshore' was first coined, which described any outsourcing location near its primary location as 'Nearshore'. For instance, Mexico and Canada were considered as nearshore destinations for the US market, while Eastern European countries were considered nearshore destinations for Western European countries...

Softtek maintained the quality of the products and services offered to its clients by using three key elements. These elements allowed full visibility to track the quality of its services. Softtek, being a CMMi level 5 organization, used SEI CMMi guidelines for planning, engineering, and managing software development and maintenance. It thus met its goals for cost, schedule, functionality, and product quality...

Over the years, since the development of the 'Nearshoring' concept, Softtek had added value to the process. The process had evolved in terms of offering greater value proposition to its clients. First, the idea behind the concept was to leverage on the aspect of proximity and to fill in the gap left by the India-centric global service delivery. This aspect remained a strong differentiator for Softtek to fight competition from distant offshoring destinations like India.

The geographic proximity offered similar time-zones which made it convenient for Softtek's associates to work simultaneously with their clients. It also allowed the company to have increased communication and face-to-face interaction if needed, allowing more complex projects to be carried out efficiently. Moreover, the nearshore locations offered Softtek a closer cultural affinity to the primary markets. For instance, a Softtek delivery center in Mexico would be familiar with and would be able to understand the lifestyles, customs, and working and communication styles of the US better than an offshore delivery center in a destination like India. ..

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