Open Mexico Operations
Expand your business into Mexico swiftly and strategically—without the high costs and risks of going solo in a new region.
Choose an approach tailored to your strategy—whether you prefer starting with a small, adaptable setup or launching a full-scale center from day one.
Build, Operate, and Transfer (BOT) Evolution
Companies that seek the assistance of a local provider to help them reduce entry risks and gain local expertise to increase the success rate of their new operations, can opt for the Build-Operate, and Transfer (BOT) model. This approach is ideal for establishing a large center with a defined scope and size, which will be fully transferred to the company after an agreed-upon period. Its primary goal is to ease the challenges of setting up a new operation in an unfamiliar location.
Alternatively, for companies unsure of the operation’s size and prefer to validate assumptions while scaling, the Subsidiary-as-a-Service model is the best fit. As an evolution of the BOT model, this flexible, pay-as-you-grow framework is provided by vendors with substantial economies of scale, and also has the option to transfer the operation later. It provides benefits expected from the as-a-Service approach, reducing operational expenses thanks to a shared infrastructure and volume efficiency.
Subsidiary-as-a-Service Model
It helps companies avoid the initial learning curve like its predecessor, but also reduces the initial setup costs and operative expenses, creating a more cost-efficient structure. And for those companies that want to plan on every outcome possible, the model significantly reduces shutdown cost exposure.
It has a faster time to value, starting in weeks, not months. As it does not depend on building everything from the ground up as a self-run independent BOT operation. This agile approach allows businesses to scale in size and functionality without committing to a specific structure size at the start.
The model is also known as GCC-as-a-Service, Virtual Subsidiary, and Virtual Captive.
Operations supported
For decades, companies in the Financial, Healthcare, CPG, Travel, and IT Industries, have opened offshore/nearshore operations in cost-efficient countries. Traditionally, the primary goal of these centers, known as Global Business Services (GBS), Shared Services Centers (SSC), Global In-House Centers (GICs), or Captives, has been to support the main organization rather than to develop the new region. However, tech companies are increasingly using these bilingual regional offices to expand into new markets, like Latin America, while simultaneously delivering services to North America.
Both small and medium enterprises (SMEs) and large corporations are increasingly opting for soft-landing solutions. SMEs leverage nearshore operations to remain competitive, while larger public companies choose this model when business opportunities don’t warrant the risks of a full-market entry or when the global economic outlook is uncertain.
With the Subsidiary-as-as-Service Framework, the foreign company fully owns and manages its personnel, while the local vendor provides administrative support and infrastructure. The model scales flexibly, with access to services such as Recruitment, HR & Culture, Payroll, Company Formation, Facilities, Procurement, Relocation, Accounting & Tax, and a Vetted Talent Database, among others.
Expected Benefits
- Cost-Efficient: Maintain the cost containment benefit of adding Mexico to the organization by avoiding high setup costs and unnecessary ongoing expenses. Reduce operative costs +40% or more in the first 3 years.
- Risk Avoidance: Shield the company from local risks while retaining operational ownership through a USA contract. If operations must be halted unexpectedly, significantly reduce shutdown cost exposure to 90%.
- Time to Value: Start benefiting from Mexico operations by reducing 3 to 5 months the company Time to Value. Critical when operating under a tight timeframe.
- Industry Expertise: With more than 30 years of local experience and industry specialization, we help our customers fine-tune their local strategy for a higher success rate.
BOT Model vs As-a-Service Framework Comparison
| Characteristics | Subsidiary-as-a-Service Framework | Captive Model (DIY) | BOT (Build-Operate-Transfer) Model |
|---|---|---|---|
| Description | Local partner is hired to enable a new operation, leveraging economies of scale. Does not have a commitment on operation size, similar to as-a-Service model (pay-per-use), and can be transferred. Best suited for: Budget conscious companies, can wait until operation reaches sustainability/profitability. In addition to risk mitigation, time to value is a concern. Scales to any size, from small test team to Large CoEs | Build a stand-alone operation from the ground up. Local Incorporation, submitting ownership to local laws. Best suited for: To sign new customers in Mexico as part of a new market entry approach. Large operation from the start and budget variability is not a concern. No urgency in time to value. | Leverage a local partner to build a new company with an expected size from the ground up, stabilize it and transfer after a set period. Best suited for: Large operations, but budget variability is a concern. ELT is not aligned/do not have bandwidth but want to lower the risk exposure of the first years. No urgency in time to value. |
| Ownership | The organization owns and operates the Global Capability Center (GCC), using a shelter contract. | The organization fully owns and operates the Global Capability Center (GCC). All resources, processes, and strategies are internally managed | The operating partner owns the GCC during the first years before transferring ownership back to the organization. |
| Control | High level of control. Local team managed by company, use its systems & follows its guidelines. Alignment with corporate culture and values. The Partner assists with support areas, like Recruiting, Payroll, Facilities, Procurement, Tax, etc. | High level of control over operations, processes, and decision-making Alignment with corporate culture and values. | Lower initial control, as an external partner owns and manages all operations during the initial phase (36 months on average) Different corporate culture and values. |
| Setup Time | Weeks not months. Faster than other models. Does not require a “seed team”, that will leave. | Typically, longer time to ramp compared to BOT, as the company builds the center from scratch. | Somewhat similar to DIY, as it’s a new operation setup. |
| Cost | Highest cost-efficiency, not only on setup costs but lower day-to-day expenses than a Captive. | Costly setup, and International Legal & Risk Advisory can drive up costs rapidly. Overspend first years when operation hasn’t reached break-even size. | Cost is higher than Captive, as there is a substantial margin charged by the partner on the total operation. Which creates a race to transfer the operation. |
| Flexibility | More flexibility to adapt processes and systems according to the organization’s needs Can start small to validate strategy or region, as the cost structure of the as-a-Service allows it. Better Shutdown Feasibility (associated costs) | More flexibility to adapt processes and systems according to the organization’s needs. Low Shutdown Feasibility (associated costs) | Less flexibility in the initial phases as processes and systems are established by the operating partner Potential limitations in adapting processes until the center is fully managed by the organization Expensive Shutdown Feasibility. |
| Risk | Lower risk as the operational partner absorbs many of the local risks. Compliance questions are addressed by a team of specialists with current, multi-company experience—not just one person’s prior job (DIY approach) | Higher risks associated with market volatility, regulatory issues, and operational challenges Full accountability for performance, compliance, and risk management. | Lower risk as the operational partner absorbs many of the local risks. Compliance questions are addressed by a team of specialists with current, multi-company experience—not just one person’s prior job (DIY approach) |
The SUBaaS model has a pay-per-use fee based on headcount and includes all access to all of the specialized areas needed to run operations locally.
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