The concept of nearshore was first coined by Softtek in 1997 as we began to do work with our first U.S. clients. The concept began to gain ground during 2002-2003 as Softtek and the Mexican government began marketing the concept more aggressively. The broad market now identifies Nearshore with primarily Canada and Mexico for the U.S. market. The term has also now evolved to describe any outsourcing location “near” to its primary market (i.e. Eastern European countries to Western European Countries) Some analysts describe it as services delivered from an adjacent or nearby country.
The original concept of Nearshore, as we defined in our white paper, Nearshore Goes Global, essentially promoted the following customer benefits:
These benefits represent the most elemental form of value proposition for a nearshore offering, since they are seemingly available for every company that establishes in a nearshore location, and for a seasoned global sourcing professional can be easily justifiable. Thus, it is understandable to see many players jumping into the nearshore bandwagon and claim the nearshore value proposition.
By the year 2002 Softtek introduced the Total Cost of Engagement or TCE concept, as an approach that evaluates the total expenditures of offshore engagements, bringing to light the cost competitiveness of a mature nearshore model, even when compared to highly cost efficient offshore models.
Although nearshore rates tend to be higher, the overall cost of nearshore engagements is equivalent or less than offshore, because of the efficiency gains that working in close proximity to the US and in the same time zones can bring. Through the use of a mature and disciplined process, the Near Shore® model is much more efficient in achieving higher percentages of work performed at a lower cost location than offshore. We must reiterate on the caveat that a mature and disciplined process is needed to achieve such levels of nearshore usage. As of December 2007 we have an average of over 90% of work performed at the lower cost location, representing huge savings for our clients.
In 2007 Softtek outlined its vision of the evolution of the Near Shore® model into a truly global delivery model, with the release of the whitepaper called Nearshore 2.0: Nearshore Goes Global, in which we stated: “(Nearshore companies will) open global locations outside the “Nearshore comfort zone”. This means expanding not only into their primary markets, but opening up delivery centers in parts of the world that offer them access to more skill sets and scale.” In August of that year, Softtek acquired I.T. UNITED a leading China-based provider of software development and outsourcing services, with operations in Beijing, Shanghai, Xiamen and Xi'an. This step enabled Softtek to expand its global services footprint, and complement its European and Americas coverage with the Asian component. A revised version of Nearshore Goes Global was published in April 2011.
As of February 2013 Softtek has 10 Global Delivery Centers in Mexico (4), Brazil, Argentina, Spain, China, India and the U.S. These enable the company to provide Global Nearshore™ solutions as well as complete “follow-the-sun” solutions for application-related services, IT infrastructure and BPO services.
In more than a decade of nearshore history, we have evolved our value proposition from being strongly supported in delivering services from a nearby location, to one that helps our clients to globalize their IT operations, reduce the complexity of service management, optimize cost and support the evolution of the business.
Softtek has more than 30 offices around the world – 10 of which qualify as Global Delivery Centers, as they comply with the following:
Monterrey, the capital city of the state of Nuevo Leon, was founded in 1596 in a valley near the Sierra Madre Oriental, surrounded by the famous “Cerro de la Silla” (‘Saddle Hill,’ for its similar-looking shape).
This city is considered the industrial pole of Mexico, due in part to the presence of approximately 10,000 industries of different specialties that operate in the state: food production, beer, tobacco, glass, cement, plate, steel, chemical products, equipment, and machinery are just some of the most important production areas.
Nuevo Leon also stands out for its large commercial development, reflected in more than 25,000 businesses with diverse specialties established throughout the city.
Regarding high level education, Monterrey is the alma mater of the Instituto Tecnologico y de Estudios Superiores de Monterrey (ITESM), internationally renowned for the quality of its education techniques and the level of excellence of its graduates. The Universidad Autonoma de Nuevo Leon, the Universidad de Monterrey, and the Universidad Regiomontana, among other education institutions, place Monterrey as one of the most important education centers in Mexico.
Mexico City is an important hub for airlines from Europe, North and South America. The number of flights to/from the U.S. ranges in the hundreds per day, making the city a very important and accessible business destination.
With a population of more than 20 million people, Mexico City and its metropolitan area host a growing number of universities, including campuses from Monterrey Tec, Universidad Nacional, Universidad Iberoamericana, ITAM, Universidad Anahuac, and Instituto Politecnico Nacional, which rank at the top of universities in Latin America.
Our Global Delivery Center in Mexico City is built in a technology park, sharing facilities with the Tec Milenio University campus Mexico City—a subsidiary of Monterrey Tec. Softtek works in collaboration with Tec Milenio to define the curricula of its students, to expose them to real life situations by working in internship programs, and to offer a rapid inclusion to post-grad life.
Aguascalientes is a municipality that conserves the vestiges from its 400-year-old history. The area has a perfect balance of old and new worlds. The level of the population's well-being is within the five top entities nation-wide, with the highest levels in housing, health care, education, and electricity.
The city has an international airport that hosts direct flights from Houston and Dallas.
Fishing, canning, and winemaking are among its main industries. The warm Mediterranean climate, vineyards, museums, golf courses, whale watching, and beautiful beaches are just some of the factors that have made Ensenada to be considered as one of the most important ports on the Pacific Rim.
Softtek’s Global Delivery Center in Baja resides within the UABC campus (Universidad Autonoma de Baja California), which is the largest university in the region. Softtek and UABC have created a partnership to align the curricula of academic programs and to expose their students to world-class projects by participating in internship programs and getting them up to speed in their professional careers.
São Paulo was chosen for the second time as the best destination in Latin America for its business, according to the annual study conducted by “América Economia Intelligence,” investigations unit of the communications company ‘América Economia.’ The analysis resulted in a ranking of the top 42 municipalities of the region for business, taking into account innovator potential, capacity to generate new businesses, telecommunication, security, quality and cost of living.
The capital has an excellent metro service that is considered one of the most modern and comfortable of the world, as well as 33 million taxis. There are over 200 heliports, with 500 helicopters, making it the second largest in the world. In addition, it has the second contingent of private jets around the globe.
For air traffic, the city of São Paulo is accommodated by two airports: the International Airport of São Paulo, in Guarulhos; and the Congonhas Airport. For small planes and helicopters, the airport used is Campo Marte. More than 40 cities from another 23 countries connect regularly by commercial flights. In the Congonhas airport there are connections with 70 local towns in nearly all of the Brazilian states.
The capital of the state of São Paulo has a temperate climate and is located in southeastern Brazil. With an area of 1,530 km2 it is the fourth largest city in the world and in the Southern Hemisphere. In accordance with the IBGE, the population of the municipality of São Paulo is 10,886,518.
La Plata is a paradigm of advanced, urban planning dating of the nineteenth century. It is also an example of the hygienic (ecological) movement that started gaining importance in that period.
In general terms its population is highly qualified, with a greater proportion of university students compared to other cities. Since its foundation, it has been a place for excellence in education, serving as the facility for three universities: Universidad Tecnológica Nacional (UTN), Universidad Nacional de La Plata (UNLP) and Universidad Católica de La Plata (UCALP). It also has important third, second and first establishments.
The zone in which it is located is extremely important to the growth of the Software industry, due to its:
The Global Delivery Center in La Plata is located in the middle of the urban center, facilitating access and mobility of our associates and visits of our clients. This center was inaugurated by the city mayor and Vice President of the nation Daniel Scioli (present governor of the province of Buenos Aires) and was presented as the facility of the first technological pole of the city.
This delightful city has pleasant weather for the majority of the year, and it is a regular tourist destination spot for its gastronomy and local beaches. Furthermore, A Coruña is known for its high quality of life among its inhabitants – a population of 250,000 people that make it the second most populous city in Galicia.
A Coruña is in communication to the north of the peninsula with Madrid with diverse Spanish cities along the highway. Additionally, with only a two-hour flight to get to London, A Coruña has three airports in the area:
There are three large universities in Galicia that generate more than 1,300 graduates each year. The seven campuses of the Galician cities offer more than seven technical careers.
Throughought the years we have evolved our nearshore value proposition in four waves as depicted in the graph below:
Each wave adds to the previous to conform a solid value proposition in globally delivered services.
This was our first wave, the idea behind the concept was to fill the gap left by India-centric global service delivery. This concept remains as a solid differentiator of Softtek, although it is just the bigining of our venture in global services.
Proximity and Time Zone
Because of proximity, most nearshore locations have closer cultural affinity to their primary markets than offshore locations. Mexicans for example are very familiar with U.S. lifestyles, customs and styles of communication. In addition, because of NAFTA, Mexico has not only been an important manufacturer and provider of services to the U.S., but is an important market for U.S. businesses. This business exchange has further increased familiarity between the two cultures, helping to minimize communication issues due to cultural differences. In addition, because of NAFTA, visa issues are virtually non-existent as Mexicans can obtain TN visas (renewable 1 year term) easily.
Total Cost of Engagement, or TCE, is an approach that evaluates the total expenditures of offshore engagements, bringing to light the cost competitiveness of a mature nearshore model, even when compared to highly cost efficient offshore models.
By combining the mature quality model, digitized processes and domain expertise, we are able to offer our clients services that are based on Service Level Agreements (SLAs). This represents an enormous advantage to hiring managers and their employers, since value is measured by results rather than time sheets, and man hour rate comparisons.
Today we pledge to reduce the complexity of IT services management; optimize costs and support the globalization of IT and BPO operations while contributing to the evolution of our client’s business.
The afore mentioned is possible due to the capability to provide world-class cost efficient services, the focus of the company in addressing the market needs that are overlooked by traditional providers and the dedication to provide an outstanding experience to our customers.
World-class cost efficient services
Fill the gap left by India centric global sourcing.
Outstanding customer experience
Reduce the complexity of IT services management