Mexico
Jumps to Number Six Services Location Worldwide: A.T. Kearney
11 November 2011
Mexico
rose five spots to become the sixth-ranked country worldwide in A.T. Kearney’s
2011 Global Services Location Index, boosted by depreciation in its currency
and “increased nearshoring sentiment in the United States.”
Now the highest-ranked Latin American country in the index, wages in Mexico fell 18 percent in dollar terms last year
“as it was buffeted by economic headwinds from the United States,” according to A.T.
Kearney’s summary of the index. Those lower wages, one of the highest
concentrations of Capability Maturity Model Integration (CMMI) certified
centers in the world, as well as improved management schools, will continue to
draw customers despite “the difficult times related to escalating drug violence
in the northern states,” the report said.
The country’s strong English-language skills make it a center of BPO and
voice-based activities with a somewhat lower level of voice-based services. The
report did cite, however, the Mexico First program that aims to certify 60,000
specialized workers in both technical and soft skills by 2013; the Mexico IT initiative to
promote Mexico as a nearsourcing location, as well as ProSoft, which offers subsidies and tax incentives for firms
investing in the IT sector.
A.T. Kearney also chose Mexico for the only city-by-city
examination (see chart) “because not only is it a top performer in a large industry,
it also presents a range of capabilities” across multiple locations. It cited Guadalajara’s history as
a major electronics center, as well as the 16 ITO and BPO centers, 150 software
companies and 35 design houses located there. It did note, however,
“competition is fierce for the limited talent that speaks English.”
Monterrey is another major ITO and BPO center, the report said, which is
home to Mexico’s most successful home grown IT firms as well as some of the
country’s top technical talent through the Monterrey Technical Institute. The
report did note, however, that “a general sense of unease” related to an
upsurge in drug-related violence is stifling investment or expansion of
operations.
Mexico City,
the report said, has seen growing voice, BPO and KPO (knowledge process
outsourcing) activity, with an increased focus on BPO on recent years. Queretaro’s skilled
population and lower wage rates make it a viable alternative to more well-known
locations, although its labor pool is “shallower” than other Mexican regions. Culiacan, another “tier
two” location, is focused mainly on IT and contact
centers. Yet another emerging alternative is Hermosillo, which has in the past been primarily
devoted to manufacturing “but which is emerging as an IT destination in close
proximity to clients on the U.S. West Coast.”
While Ciudad Juarez
has long been a center for nearshore BPO services, it has been hit hard by
drug-related violence, the report said.
Elsewhere in the Nearshore, Chile
dropped from eighth place to tenth, largely because wages remained relatively
stable as it escaped the worst of the economic contraction seen elsewhere in
the world. Brazil
kept its 12th place ranking despite a strengthening currency which hinders the
growth of exports. Costa
Rica moved up three spots to 19th place
“thanks to infrastructure modernization, increased international bandwidth and
improvements in electricity infrastructure.”
At 43rd place, Colombia
performed particularly well in “people skills and availability,” with A. T.
Kearney citing Colombian Spanish as “a neutral accent that allows call centers in Colombia to serve people throughout
the Spanish-speaking world with relative ease.” It noted the need for improved
English skills to continue to draw customers as its low-cost lure fades with an
expected appreciation of the currency.
Source: globaldeliveryreport.com