Softtek, based in Mexico, provides nearshore services for companies in the U.S., Latin America and Europe. It operates seven delivery centers — four in Mexico, two in Brazil and one in Spain — through which it provides application-related services, IT-infrastructure support and business process outsourcing.

The idea behind nearshoring is to leverage Mexico’s proximity, cost structure and international trade agreements to provide U.S.-based companies with a more convenient alternative. Softtek has a solid base of Fortune 500 clients, and is expanding the nearshore concept to serve the European market with a new global delivery center in Spain.

The fundamentals of the nearshore model are to leverage lower cost structures and achieve high productivity by means of specialization and quality initiatives, plus taking advantage of proximity and international trade agreements: NAFTA (North American Free Trade Agreement) in the case of the U.S. and the EU trade regulations for Europe. These elements provide convenience, lower indirect costs, streamlined contract management and higher intellectual property and legal protection. Although nearshore rates tend to be higher, the overall cost of engagements is equivalent or less than offshore, thanks to the efficiency gains that working in close proximity to the U.S. and in the same time zones can bring. The model is capable of achieving higher percentages of work performed at a lower cost location than offshore.