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 Technology News | April 2006 
Border Tech Firm Pools Best of Mexican Talent
 Wire services/El Universal
| | A screen shows Internet services available through a broadband-connected TiVo digital video recorder at the Consumer Electronics Show in Las Vegas, Nevada January 5, 2006. In an east Texas courthouse, TiVo Inc. and EchoStar Communications have been battling over a key patent that makes digital video recorders work. A TiVo victory would not only resurrect the fledgling company but also encourage a shift in DVR strategies at the major pay TV providers. (Steve Marcus/Reuters) |
Kevin Harris found a way to get extra sleep and make more money: Stop dealing with computer programmers in India and Pakistan in favor of their counterparts in Mexico.
Harrisī company, Silicon Space Inc., creates Web-based systems so companies can automate tedious tasks such as bookkeeping and develop ways to market their services online.
In 2002, Harris, the companyīs chief officer and a minority shareholder, began tapping a new source of talent across the border. He hired a handful of Mexican technology experts to work in his office in San Diego. And he started sending extra work to a software company in Mexico City.
"Near-sourcing," as this type of cross-border relationship is called, wouldnīt have been possible a decade ago, because of a lack of sufficient technical expertise south of the border. But in an effort to compete with China and India, Mexican officials are beefing up their technical training, giving incentives to foreign high-tech companies and providing funding to promising Mexican start-ups.
One of the pockets of innovation is along the San Diego-Tijuana border, where companies such as Silicon Space are contributing to an increasingly vibrant economy. Last year, the 75-person company, whose clients include Fortune 500 companies, raked in US$10 million in revenue, up from US$3 million in 2002.
"The beauty of working in Mexico is, I can pick up the phone and have their guys here tomorrow," said Harris, 34, who worked at a San Diego tech company before joining Silicon Space six years ago. "And they donīt have to fly 26 hours to get here, and it doesnīt cost them thousands of dollars. And because 30 percent of my staff is from Mexico, culturally and language-wise they can communicate beautifully."
Harris was an early advocate of outsourcing. As far back as the mid-1990s, he tried shipping less-technical work - such as code design and testing - to India and Pakistan. But he gave up after a few years juggling time zones and communication gaps.
As the cost pressures increased, Harris decided to try Mexico. He started looking in Tijuana but couldnīt find any computer companies large enough to spare a couple employees for months at a time. He found his present partner, a large Mexico City-based software company, at a business conference.
BORDER RELATIONS
The cross-border relationship gives Harris the flexibility to operate like a much bigger company, taking on larger jobs and supplementing his technical staff with programmers from Mexico. It makes it cheaper for him to do the research he needs to develop products, such as search-engine marketing tools.
"Our ability to use our partner for ... (research and development) has made it affordable to us," he said.
Silicon Space offers its clients a one-stop shop for transitioning from pen and paper to the Internet age. San Diego-based Harcourt Trade Publishers asked the company to develop a Web-based system to manage its publication rights and royalty payments. The Navy needed a system to manage the flow of documents related to satellite launches.
PenChecks Inc., a San Diego company with 15 employees, came to Silicon Space three years ago looking for help automating the arduous process of managing and distributing employee benefits checks for a number of large companies.
Cheryl Einsele, PenChecksī chief operating officer, said she didnīt consider outsourcing the job because she wanted to meet regularly with the team developing the Web-based system. She said she didnīt know at first that the project manager, Gustavo Peņa Verplanken, 29, was commuting from Tijuana.
When she found out, Einsele called Harris to learn more about the arrangement. She was reassured to learn that Pena was being fairly compensated. And she has since become convinced that everyone has benefited from the cross-border strategy.
Not only is she pleased with Penaīs handling of the difficult project - which has already lasted three years - but she also said Silicon Spaceīs use of resources in Mexico had lowered the final price tag.
"Our company is not that large, and for us, this product will be very expensive," she said. "Ultimately, itīs good that we can make this cost-effective."
Given the public backlash against outsourcing, many U.S. companies donīt want anyone to know that their work is leaving the country.
But Harris said most of his private clients didnīt care whether their work was done in San Diego, Tijuana or Bangalore, India, as long as the products were delivered on time and under budget.
Still, he knows not everyone shares his enthusiasm for cross-border integration.
Harris is looking into opening an office in Tijuana. But he isnīt sure whether the savings will outweigh the headaches, and he worries that some of his U.S. clients may get nervous if too much of their work is heading south. |
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