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As many executives in the US know all too well, the cost of everything is rising rapidly. From raw materials to labor to software, everything is more expensive. It’s now more important than ever to successfully leverage strategic outsourcing.
Often, manufacturing companies outsource the manufacturing function to reduce labor costs. We’ve written extensively on how contract manufacturing or using a shelter service in Mexico can greatly reduce manufacturing costs. But there are other areas of your business you can outsource, too. Most of these fall into the category of business process outsourcing or BPO.
BPO in Mexico is particularly advantageous for companies located in the US and Canada. In order to better understand just what this is and how to take advantage of this kind of outsourcing, we’ll break it down and examine how BPO in Mexico typically works to benefit North American companies.
Whenever a company contracts with an external service to perform an essential business task on their behalf, this is business process outsourcing or BPO. Typically, BPO pertains to what is known as commodity processes – that is, those processes essential to the performance of the company but not substantially different from one company to another. Usually, processes or services like the following are strong candidates for outsourcing:
When considering utilizing BPO in Mexico, it is essential to identify which processes are not part of your company’s core value proposition and thus not necessary for your own staff to perform. These are often called back-office functions or internal business functions.
BPO is especially common in the manufacturing industry, because there are several common areas that meet this criterion. Manufacturers discovered that outsourced vendors and suppliers could actually outperform in-house efforts due to their specialized nature, cost efficiency, and focus on excelling in just that particular service.
Business process outsourcing or BPO in Mexico offers a unique set of advantages over BPO within the US or Canada – or other common outsourcing destinations like China or India. As costs rise for office space rent, labor costs, and energy, it just makes sense to outsource some processes to a country like Mexico, where overall, costs are substantially lower. But cost is only one of the factors. Here’s is precisely how BPO in Mexico works to the advantage of companies based in the US or Canada.
Mexican workers are known for being highly specialized. The country graduates a high number of engineers and technicians aimed at specific industry needs. Some of the specific needs educational institutions produce skilled workers for include sales, customer support, IT, computer science, and machine learning.
Because Mexico is so close to the US, this leads to key advantages over BPO in other destinations like Asia. For example, Mexican time zones are perfectly aligned with time zones for the rest of North America. So, call centers are better able to connect with customers. Management is better able to respond to urgent issues. Travel time is short, especially to the border region, where most BPO offices are located.
Mexican wages, even along the border, are typically much lower than in the US or Canada. Outsourcing to Mexico means a reduction in the cost of labor by 50-75%.
The way business works in Mexico requires fewer associated costs. Insurance is less expensive and not as complex. Utilities and office space are far less expensive than in the US, too. Businesses outsourcing processes to Mexico often experience a 50% reduction in administrative and other expenses.
This is especially relevant for call centers – probably the most outsourced business process in Mexico. Particularly in border regions like Baja California, Mexican workers are fluent in English, often without an accent. Thus, it is easier to manage and align the culture of your call center with that of your US corporate office. And having fluent and even native English speakers in your Mexican call center fosters better rapport and communication with US and Canadian customers.
Discover how TACNA’s BPO services can impact your company. Contact us for a customized analysis.