Luis Aburto identified the advantages of outsourcing development work when he made decision to start Scio Consulting International LLC, information technology company. But he still has problem: Where in world (literally) must he go for talent he requires? He has considered linking up with service provider in Bangalore, India, as the wages are very low, pool of well-trained employees is deep, and technical skills are strongly emphasized in university system. But India is long way from company's home office in San Jose, California, that means greater travel costs and dealing with hassle of working between times zones which are nearly opposite one another. Also, cultural gap would be important, although most educated workers in India speak English. Aburto has also been in touch with operation in Morelia, Mexico. His contacts there tell him that the skilled workers he requirements are available, cultural gap is limited, turnover is very low, and technical staff will not require special visas to travel between Mexico and project sites in United States. Though, wages are cosiderably higher than in Bangalore, university graduates in Mexico get little practical training, and law makes it very difficult to restaff once you hire them. Clock is ticking. Aburto requires to line up employees for three big contracts he is currently negotiating, and his potential clients all want to get their projects started within month or so of final decision. If he even gets two of three deals to pan out, he will have much more work than his staff in United States can handle. He will require additional employees - he is just not certain where to go for outsourcing support.
problem 1 What extra information would be useful to Aburto as he ponders this decision?
problem 2 What extra advantages and disadvantages can you think of that Aburto must consider when selecting between off shoring this work to India and "nearshoring" it to Mexico?
problem 3 Which location would you select- India or Mexico? Make sure to create strong case for your final decision.