As chairman of IT@Baja, Antonio Silva helps coordinate the efforts of more than 45 informational technology companies. (photo /Sergio Zermeño Ochoa)

As U.S. companies look to the Far East for software development outsourcing, a competitive alternative has emerged right next door. San Diego companies that develop or require custom software don’t need to travel 10,000 miles; their needs can be met cost-effectively from only 10 miles away.

Baja California has made good progress in building upon 40 years of manufacturing experience by developing higher value-added products and services. Developing information technology has become a core capability of a maturing engineering workforce and educational systems. Local entrepreneurs and engineers from some of Mexico’s largest companies have given birth to the Baja California Information Technology Cluster: IT@Baja.

IT@Baja is a public agency/private sector initiative to help small and large IT companies thrive.

“We now coordinate the efforts of over 45 IT companies, 12 universities and over 15 government and economic development agencies, becoming one of the leaders of PROSOFT, Mexico’s national competitiveness initiative for the software industry,” says IT@Baja Chairman Antonio Alamos. (Check out mexico-it.com for more.)

Some of the leading companies of IT@Baja include Zentrum, the brains of the back-end operations of what Business Week calls one the most advanced IT companies in the world: America Movil. Zentrum, now part of the Eidon Consortium, is a 180-engineer software development center located in Tijuana.

Another company is Softtek, one of Mexico’s leading IT solutions outsourcing contractors, which recently established operations in Ensenada to serve its California-based customers.

With more than 4,000 engineers in North and South America and Europe, Softtek describes itself as “near shore” (as opposed to off shore) and has proven to be a very competitive service. Melik Hernandez, director of business development, says: “Our new delivery center in Ensenada will open highly efficient outsourcing opportunities for West Coast corporations, with a cost competitiveness that could surpass providers in India.”

Telvista, a customer contact center, provides services to a wide array of mid-size and Fortune 1,000 clients in industries such as telecommunications, technology, travel, tourism, banking, financial services and public utilities. Telvista has grown from 30 operators to more than 7,000 in the last eight years. “Mexico has proven so competitive and professional that we are even exporting expertise and process improvements to operations within the United States,” says CEO Higinio Sanchez. Telvista has contact centers in Tijuana, Mexicali and Mexico City, and Dallas and Odessa, Texas, and Danville, Va.

The success of local entrepreneurs also is noteworthy, with such examples as Grupo Tress, a software firm that started in the 1990s and created a leading human resources application for the manufacturing industry with more than 60 percent of the market using its licenses. Newer enterprises, like Imedis, are finding solutions to complex problems in the health industry. Recently, Imedis began operating Baja California’s State Health System, an all-digital medical records and radiology imaging control system. Another company, Medida Inc., has developed innovations in wireless sensor technology that require less energy and have farther reach.

Baja California’s software development promoters cite advantages of a highly competitive workforce, fast turnaround and lower costs of operation. They say the region’s IT entrepreneurs demonstrate mature project management capabilities and most engineers are fluent in English and understand American business practices. Geographic proximity is a key element to managing the total cost of engagement; site visits and meetings can be arranged within a day, not weeks. It is easier than visiting facilities in Los Angeles.

Baja has advanced telecommunications infrastructure, providing broadband connectivity at comparable U.S. costs and quality. A UCSD San Diego Dialogue study on cross-border technology sectors says more than 630 software-related professionals in Baja graduated from college, which is about 10 percent more than in San Diego. The same study quotes Kevin Harris, COO of Silicon Space, a San Diego-based software firm, saying, “Cross-border development projects… result in a product that better serves the needs of our clients at competitive costs.” Additionally, Baja universities are establishing centers of excellence in software development such as one established at CETYS in Mexicali in collaboration with IBM, focused on open-source technologies, and CENI2T, a technology innovation incubation program in Ensenada.

(To learn more of what IT@Baja is doing, to establish software development operations or subcontract with local firms, contact IT@Baja CEO Antonio Silva, an experienced cross-border IT professional, at antonio.silva@itbaja.org or visit itbaja.org.)

Flavio Olivieri is an economic development specialist.