In bad economic times

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In Bad Economic Times, Mexico Is Here to Help |
Externalize- Internalize- Outsourcing |
Maria Laura Ramirez Pumarino. / Georgina Giovanna Parada Fierro. /Nabila Amarsy Hiridjee. |
10/14/2010
10/14/2010

Contents

In Bad Economic Times, Mexico Is Here to Help.
1. Introduction

2. 1. United states of America

2. 2. Estados Unidos Mexicanos
3.1 Mexico, a near shore to outsourceInformation Technology
3.1.1 Drivers

3.1.2 Inhibitors

4. CRM.

4. 2. 1. Drivers

4. 2. 2. Inhibitors

5. Conclusion.

6. Sources and articles

In Bad Economic Times,
Mexico Is Here to Help
American companies outsourcing to Mexico
1. Introduction

The idea of outsourcing has been in the world for years, although the methodology is certainly not the same, the idea remains similar.The idea of outsourcing is to specialize a group of individuals from an specific location to be able to take out sectors of management and production areas and transfer administration to outside companies. This paper will talk about outsourcing to Mexico by American industries, we will present a brief summary of the economic situation in Mexico, drivers, inhibitors and why choosing Mexico foroutsourcing. We will especially focus on the information technology sector and the customer relationship sector. This will provide a better understanding of outsourcing, the reasons of its success and will demonstrate how these activities are evolving in the USA and how Mexico turned out to be an important actor in this transformation process.
First we need to understand the concept of outsourcingthe definition of outsourcing according the BTET Business Dictionary is “the transfer of the provision of services previously performed by internal personnel to an external organization, usually under a contract with agreed standards, costs, and conditions”. So in few words outsourcing is an activity that has given companies the opportunity to contract internal processes out to third-party venturesat lower costs or for a special advantage. So before taking this decision and transferring an activity, companies have to take in count some factors like cost, location, language, sector. A PEST and industry analysis are encouraged.
We are trying, in our case, to analyze why Mexico could be the perfect choice for outsourcing in the customer relationship and IT areas for American companies.

2.1. United Estates of America

The USA are the past decade’s superpower. Indeed, with a total population of more than 307 million citizens,the country generates around 14,204 billion of US dollars of gross domestic product. Being in a fierce competition on a domestic side but also internationally, American companies have felt the need to cut their costs. Yes, the labor is skillful, but theminimum wages are set around 7.25 US $/h which is almost the double of the Mexican minimum wages. Therefore, the decision to outsource has been quite a logical decision for some companies who decided to turn to Mexico. It is a rule, you shouldn’t outsource one of your core-activities. So far, Mexican workers have been working in transportation services, call centers, assembling process etc. But thereis always a risk to have a more attractive country, which doesn’t unable Mexico from having other opportunities such as the medical industry, technological development or logistics. When the US will master these activities so well they finally become uncore, there is a high chance they go see their actual partner. Therefore, the USA started a relationship with one of their neighbors and member ofthe NAFTA for the long term and with more emerging activities coming for outsourcing.

2. 2. Estados Unidos Mexicanos

The USA have two frontiers: Canada and Mexico. This position is strategic for the country, cause in fact Mexico is literally on the border of the USA. It makes sense that Mexico is emerging in the market place for outsourcing because it has more IT graduates than any other...
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