Misconceptions about Outsourcing Software Development in Latin America

October 13, 2014

By Andy Hilliard

Misconceptions_about_Software_Outsourcing_Destinations_There are often concerns and questions surrounding software outsourcing destinations, especially for clients who don’t have procurement departments to support them or who don’t commonly travel to or work with the international destinations they are evaluating. Let’s face it: our views on most international locations are largely shaped by limited, selective, biased and subjective sources!

While many companies have heard of outsourcing to India, they aren’t often familiar with increasingly popular Latin American locations.

This article discusses two countries in particular, Costa Rica and Argentina, providing information on their software resources, and clearing up some questions surrounding these two countries.

Is Costa Rica Too Small for Outsourcing Software Development?

Costa Rica is a relatively small country, containing approximately 4.3 million people. Often clients will dismiss Costa Rica as an option because they say, “the country is too small to scale”. That is virtually never true. Despite its size, it has an excellent standard of living, high educational achievement, and graduates over 1,500 software engineers a year. While there are some circumstances where you might be looking to acquire hundreds of resources for your software project where Costa Rica might be too small to scale with your operations, in most circumstances Costa Rica fits most clients’ needs.

The partners Accerlerance works with in Costa Rica have no problem vetting, hiring and providing up to 10 developers or engineers per month. Software engineers in Costa Rica also tend to speak English well and have extensive experience working with North American companies since so much of the country’s GDP comes from tourism from that market.  Developers there code in a variety of languages and for numerous platforms, including mobile and web design.

Accelerance’s network of partners in Costa Rica have continuously delivered an active pipeline of quality engineers that have succeeded in quick ramp-up of projects and stellar results for our clients. In a number of circumstances, we have found our clients could draw on 30 experienced engineers in 3 months time to meet all their needs, illustrating the fact that a small country can often produce big results when our clients need quality software outsourcing.  

And lastly, who doesn’t think Costa Rica is a fantastic, close, and beautiful place to visit?

Due to their Financial Instability, is Outsourcing to Argentina too Risky?

Argentina is periodically in the news for economic instability, with bond markets questioning the country’s financial footing. However, interestingly enough, financial instability has historically been a boon for Argentina’s export market. The reason is that the more financial difficulties Argentina experiences, the more its currency becomes devalued. When Argentina last defaulted in the early 2000s, it brought outsourcing software prices down to $20 to $30 per hour, and as the economy recovered, those prices went up to $33 to $43 an hour.

During times of financial instability, it usually makes Argentina’s quality programmers even cheaper for North American and European software companies. Now that Argentina is once again experiencing economic issues, there are expectations that the country will feature much lower outsourcing prices over the next 5 to 7 years, helping our clients get the cost savings they need to stay competitive.

It’s important to note that the economic issues a government like Argentina’s has doesn’t impact the work that your software development partner there does. Workers still go to work, still make a living and still live their lives like you and I. At the micro level, you benefit from lower rates due to the weakened local currency.

When global outsourcing isn’t your specialization it’s easy to over weigh and fall victim to limited research, old perceptions, unfair associations, erroneous or biased conjecture and the like. Accelerance’s sole objective is to helps clients find the right software development partner, in whatever location that might be, by providing unbiased and knowledgeable insight.

 

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