Latin America Software Outsourcing: Everything You Need To Know

January 15, 2018

By Andy Hilliard

Everything_You_Need_to_Know_About_Outsourcing_to_Latin_AmericaA recent Thomson Reuters report confirms that private- equity and venture-capital investments reached in excess of $11 billion in Latin America in 2017.

Many of the businesses being invested in are small and medium enterprises (SMEs), and perhaps 90 percent of these companies are in Mexico and Colombia. Subsequently, many managers are becoming more comfortable taking risks in Latin America.

Software outsourcing in Latin America has grown tremendously. Mexico and countries in Central and South America have jumped on the software outsourcing bandwagon. And because of their close proximity to North American clients, these countries compete favorably with India, China and other outsourcing destinations.

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Universities in Latin America have robust IT programs and yield enough programmers to easily honor software outsourcing commitments. Although outsourcing costs tend to be higher in Latin America than
in other regions, outsourcing your software development to Latin American countries remains a bargain compared to hiring your own programming team in North America. In terms of workday overlap between North and South America, the nearness of time zones allows for highly-collaborative software-development methodologies like Agile and Scrum.

Key advantages of offshore development in Latin America include:

  • Full workday overlap, facilitating real-time collaboration
  • Excellent English language skills and cultural similarities
  • Close travel proximity, allowing face-to-face visits with your software development team 

Here's a look into what you should know about outsourcing your software development work to teams in Argentina, Colombia and Peru. 

Outsourcing to Argentina 

Argentina has a very strong relationship with, and a culture heavily influenced  by Europe. Subsequently, there exists a strong connection between Argentina and the west. Argentina enjoys an advanced economy and has a very talented pool of technically-savvy and well-educated programmers eager to work. Education there is very well developed and continues to grow. During the dot-com boom, the country was home to approximately 65 percent of the design-and-implementation efforts of most regional Internet startups.  

One of the benefits of outsourcing to Argentina is that there are cultural similarities between them and the United States, which is part of what makes Argentineans easy to work with. As well, Argentineans, like Americans, approach their work and life in general with a can-do attitude. Their knack for discovering innovative solutions is a direct result of their desire to make things work with the tools and materials at their disposal. In fact, they have a saying to that effect: “Lo atamos con alambre.” Translated from Spanish, the saying means “tying it with wire” but has the idiomatic connotation of “make it work!” 

Outsourcing to Colombia

As mentioned in our exploration of outsourcing to Southeast Asian countries, Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa are collectively known as CIVETS countries. Economists favor these countries because they have sophisticated  financial systems, controlled inflation, an  increasing population of young people, a variety of exports, increasing foreign direct investment and geo-strategic locations. Of the CIVETS countries, Colombia is one that offers some of the best outsourcing opportunities. The country also offers a westernized culture, is geographically close to the United States, and, as is the case with other outsourcing destinations in Latin America, the timezone is similar. 

Each year over 13,000 engineering and technical professionals in IT- related fields graduate from Colombia, adding to the already-sizable software development workforce that demonstrates familiarity with a variety of technologies and development processes, including Agile and CMMI. The electrical and telecommunications infrastructure there is one of the best in Latin America, and English is widely used. Similar to many developing nations, Colombia’s IT and BPO industries are doing very well, and many U.S. corporations are setting up operations there, including IBM, HP and Unisys.

The magical quality that seems to define Colombia, though, is something that permeates the culture itself. Similar to Vietnam and India, Colombians have an optimism and enthusiasm that’s contagious. Regardless of project roadblocks or challenges, they find ways to make things work. Such an attitude goes a long way to ensuring success in the software development world. Such passion is much needed and highly sought after. The major centers of software development outsourcing are in Bogotá and Medellín, respectively the first- and second-largest cities in Colombia. 

Outsourcing to Peru

Once mired in political turmoil, Peru is now a vibrant country with a growing economy, and many businesses, particularly from Brazil, are seeing Peru as an investment opportunity. According to the 2017 Peru Service Summit, software, digital marketing, architecture, BPO, publishing, graphic services, animation and video game services will be widely available and over $85 million in revenue is projected. Likewise, foreign direct investment continues to rise in Peru, evidence of the positive performance of the Latin American economy. 

Other Latin American service providers are setting up operations in Peru, focusing on web and mobile applications. When hiring programmers, they're exceptionally picky, selecting only the best of the many bright, technical engineers that are graduating from Peruvian universities. These engineers are fluent in the English language and familiar with the business culture and mindset of the United States. With close scrutiny, you may find some Peruvian outsourcing companies that offer mobile and social media development services.

In addition to the expanding outsourcing opportunities, Peru has a fascinating history and is an attractive tourist destination. Many people come to Lima, find it to be a big city, and then escape to the mountains, immersing themselves in the Inca culture. Machu Picchu, a 15th- century Inca site, is a popular tourist destination. 

To learn more about outsourcing to other countries in Latin America such as Brazil, Costa Rica and Venezuela download our complete 2018 Guide to Software Outsourcing in Latin America.

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