Outsourcing Data & Analytics: Consider Nearshore

For many businesses, outsourcing data and analytics projects can be a daunting and overwhelming task. However, it can come with significant cost savings, among other benefits. The nearshore model of outsourcing data and analytics offers a unique solution that combines cost savings, access to top talent in STEM fields like data science and analytics, and North American cross-border agreement benefits.

By leveraging available talent pools in Mexico, companies can benefit from proximity to North America. This can provide an excellent advantage for many reasons:

  • Similar time zones for seamless communication and measurably faster action
  • Collaboration between teams on either side of the border
  • Cost savings

The cost-saving benefits achieved using nearshoring services are hard to ignore in today’s competitive marketplace. Outsourcing can save a company 40% or more on information technology needs. There is a reason 70% of American businesses are eyeing nearshore outsourcing

This article will discuss how nearshoring data analytics helps businesses by assessing the CAGE model, USMCA (United States-Mexico-Canada Agreement), while tapping into Mexico’s talented pool of STEM professionals.

The problems with outsourcing data analytics offshore

There are various aspects to consider outside of the availability of talent. First, look at the fragile domestic policies within Eastern European countries where offshoring has been the norm. Political instability is common in countries with a significant hub for remote work, including technology jobs. Offshoring outsourced data analytics has become even more challenging with additional political constraints. 

Next, the distance between the countries can make communication and collaboration difficult. This can significantly slow workflow, making it difficult to troubleshoot any issues that arise, especially when dealing with large or complex projects.

Finally, the time zone difference, while not as prominent a factor as the language barrier, can still create complications. Team meetings, reviews, and discussions may need to take place outside traditional business hours to accommodate both teams. 

Why nearshore outsourcing in Mexico

When working with an outsourcing partner, you want to ensure it is done right, on time, and within budget. To do this, nearshore outsourcing provides several advantages.

When outsourcing, it is important to consider the CAGE (Cultural, Administrative, Geographical, and Economic) model to assess offshore and nearshore opportunities. This can help companies identify a nearshore destination that best suits their data and analytics needs. For example, Mexico is an ideal nearshore country for American companies. This model looks at four things: Culture, Administrative rules, Geography, and Economics. 

  • Culture looks at the language people in the area speak and how they act. 
  • Administrative rules cover laws that may affect how you do business there. 
  • Geography means looking at how near or far away the place is from where you live or work and what potential impact the distance creates. 
  • Economics means considering how much it will cost to outsource your data and analytics project there. 

Protecting intellectual property

It is important to note that the USMCA (United States-Mexico-Canada Agreement), benefits the nearshore model through tight intellectual property protection laws and is inclusive of the digital economy, especially as it relates to the free movement of data across all countries. The USMCA is the renegotiation of NAFTA and regulates trade between the United States, Mexico, and Canada, including updated intellectual property protections that aligns with the United States IP laws. 

Streamlined visa procedures

The relationship between the US and Mexico bolsters the discussion of security and migration, making Mexico more appealing compared to Asia, Eastern Europe (due to the current fragile political environment), and other offshore options because of its preferential access. Work visas can be applied for and granted throughout the year, whereas H1B visas are strictly monitored and processed and only issued in October. The NAFTA Professional (TN) visa is a temporary, three-year work permit for citizens of Canada, Mexico, and the US. It can be renewed indefinitely for qualified workers from each country to reside in the US with their spouses and children. This means team collaboration can be seamless as professionals can be mobile and, if necessary, stay for extended periods based on the project’s needs. 

The bottom line

When it comes to outsourcing, nearshoring data and analytics work in Mexico poses tangible benefits. From near-identical time zones, language skills, ease of work visa and travel, cost savings, and IP protection to US standards to a large pool of skilled professions, nearshore data and analytics solutions can yield positive outcomes. Read more about these solutions here.

Gartner’s 2022 Top Data & Analytics Trends

Finding the talented labor resources to solve the increased scarcity problem in data and analytics (D&A) is becoming mission-critical for companies around the world, according to technology research and consulting firm Gartner, as revealed in its 2022 list of the top D&A trends.

The company pinned down three key areas that need addressing overall:

  • Institutionalize Trust
  • Augment People and Decisions
  • Activate Dynamism and Diversity

The Lack of Data Literacy
Technology is again outpacing the workforce’s ability to understand and master its use. The chief deficiency comes from a lack of needed data literacy in most companies’ workforces. Employees across every industry lack the basic knowledge and practical understanding of how data is sourced and constructed, how to apply techniques and analytics to it, and how to implement AI-powered analysis into use cases, applications, and future business decisions. With Machine Learning (ML) and Artificial Intelligence (AI) already becoming significant components of most companies – 86% of CEOs report it’s already considered mainstream technology in their offices – this is no passing fad, but the definitive way competitive business functions now and in the future.

The Gap Between Technology and People to Understand the Value of Data

Gartner predicts the lack of sufficiently trained professionals to fully employ data and analysis will continue for the majority of Chief Data Officer (CDO) organizations through 2025. The belief is that companies that have become hyper-focused on technology are betting on the wrong horse. No matter how good AI is at recognizing patterns and making recommendations, companies still need talented, trained human employees to understand the value of the data to make the best decisions on how it will create ROI for the company in the future.

Gartner promotes digital learning for companies to handle the widening gap between what they are technologically capable of and what their employees are capable of. The gap is widening rapidly chiefly because of the digital aspect of installing new systems without needing new hardware. Twenty years ago, implementing a new ERP system or switching from one workflow system to another was a long slog of upgrading hardware, buying licenses, and new hardware. These steps to implement new systems and processes would allow time for employees to start training on the new workflow. With tech now deliverable instantly by the cloud, that lag time has virtually vanished, and employees are falling behind as technology moves faster and faster.

A New Working Culture and A Matter of Security, Risk, and Trust

With a lack of employees who understand the process of data analysis powered by AI also comes the risk of companies losing their customers’ trust and their ability to remain transparent in their processes. This lack of cohesion can be amplified in the ever-popular remote working model. Allowing employees to work from home was deemed mandatory during the COVID-19 pandemic, but as most countries move past those uncertain times, the push to enable workers to occupy whatever space they wish during business hours is now seeing repercussions. With employees logging in to virtual servers and cloud environments from their homes, coffee shops, airports, hotels, and every place in between, connected governance goes out the window. The hard and fast rules of how data is viewed, shared, manipulated, and utilized on-site can fall by the wayside when employees venture off the premises, making data security a primary risk.

When AI models misrepresent, particularly without adequate staff to recognize the shortcomings, the risks mushroom into bad business decisions, including those that risk lives in hospitals, government facilities, power grids, and the like. The push to achieve value from substantial investments in D&A and AI is leading some companies to cut corners on best practices in developing connected governance throughout edge environments and distributed systems.

It’s another area where a lack of fundamental knowledge of data and its usage is causing employees to make decisions without knowing what they are risking. Upskilling the workforce and obtaining highly skilled expertise that understands data protection, sharing, and usage is necessary to keep companies from risking legal trouble, violating privacy regulations, and destroying the company’s reputation, not to mention limitations on return on investment.

Contact Swoon Consulting to learn how our Nearshore Data & Analytics solutions can help solve talent scarcity and upskilling gaps.