Global Expansion for Small Businesses
Luis Aburto recognized the advantages of outsourcing
development work when he decided to start Scio Consulting International LLC, an
information technology company. But he still has a question: Where in the world
(literally) should he go for the talent he needs? He has considered linking up
with a service provider in Bangalore, India, because the wages are very low,
the pool of well-trained employees is deep, and technical skills are strongly
emphasized in the university system. But India is a long way from the company’s
home office in San Jose, California, which means greater travel costs and
dealing with the hassle of working between times zones that are nearly opposite
one another. Also, the cultural gap would be significant, even though most
educated workers in India speak English. Aburto has also been in touch with an
operation in Morelia, Mexico. His contacts there tell him that the skilled
workers he needs are available, the cultural gap is limited, turnover is very
low, and technical staff will not need special visas to travel between Mexico
and project sites in the United States. However, wages are significantly higher
than in Bangalore, university graduates in Mexico receive little practical
training, and the law makes it very difficult to restaff once you hire them.
The clock is ticking. Aburto needs to line up employees for three big contracts
he is currently negotiating, and his potential clients all want to get their
projects started within a month or so of a final decision. If he even gets two
of the three deals to pan out, he will have much more work than his staff in
the United States can handle. He will need additional employees – he’s just not
certain where to go for outsourcing support.
Question 1 What additional information would be helpful to
Aburto as he ponders this decision?
Question 2 What additional advantages and disadvantages can
you think of that Aburto should consider when
choosing between off shoring this work to India and
“nearshoring” it to Mexico?
Question 3 Which location would you choose – India or
Mexico? Be sure to build a strong case for your final
decision.
