From cost-benefit to technological talent, software outsourcing in Latin America has caught the attention of companies around the world.
Software outsourcing is a great strategy when it comes to developing high-quality, cost-effective products. However, finding the right IT provider can be a bit tricky for many companies, especially since outsourcing has become a worldwide phenomenon. In fact, many organizations are just starting to dive into the field and have no idea where to start.
Fortunately, there are several ways to enter the global outsourcing market. For starters, learning more about the most popular regions for outsourcing development will help narrow down your searches to a few technologically prosperous regions. Most US companies, for example, outsource to South America due to the many benefits this region brings to the table.
You can also check out all the information from this article in this most attractive PDF infographic we made. Otherwise, here's our take on the matter.
Outsourcing in Latin America
Let's start with the facts: Latin America has the fastest projected IT industry growth of any region , with a projected revenue growth rate of 5.3% for the 2020s, 2 points above the global average of 3.3 %. Currently, software development in South America leads the region's industry, mainly thanks to countries such as Argentina, Colombia, Chile and Brazil.
The main region interested in outsourcing in Latin America is, obviously, North America. The United States, for example, has a growing need for skilled technology talent that local resources simply cannot meet. In 2020 alone, there will be 1 million more jobs than global applicants in computer science fields. As a result, the best option to balance supply and demand is outsourcing to Latin America.
1. Economical
Outsourcing development to US software engineers can cost between $80 and $150 per hour, while outsourcing to Latin America gives you access to software engineers that can cost between $40 and $70 per hour.
2. Time difference
Outsourcing hubs like India have a huge time shift compared to North America, making it difficult to work on real-time projects. In Latin America, there is only a small difference of 1 to 3 hours (ET), so briefings and project management are much faster.
3. High proficiency in English
According to the EF 2017 English Proficiency Index, some Latin American countries have surpassed India and China in language proficiency and all are rising in English, with Argentina at the top of the region. Your company can leverage bilingual developers and project managers.
4. Technological education
Argentina, Chile and Brazil are the countries with the highest standards of technological education in Latin America. Argentina's Plano 111 Mil government program will educate 100,000 new programmers over the next four years.
5. Technological talent
Stack Overflow provides numbers that show that there are more qualified programmers from Peru (24 thousand), Colombia (21 thousand), Chile (18 thousand), Argentina (16 thousand) and Brazil (14 thousand) compared to other global IT hotspots, such as India (13 thousand) and China (13k).
6. Growth of the IT industry
According to a study by Frost & Sullivan, there are so many successful companies providing outsourcing services that IT industry revenues in Latin America grew 20.3% between 2016 and 2017.
7. Global Proximity
All products manufactured in Latin American countries can be delivered anywhere in the US in less than 24 hours. When you outsource to South America, proximity increases the outsourcing industry's convenience compared to IT centers in the Middle East or Asia.
8. Cultural Similarities
Outsourcing to the far reaches of Singapore or India may result in some misunderstandings that may require corrections, more expense and more time. Proficiency in English and cultural similarities make software outsourcing in Latin America a smart choice for development.
9. Agile Framework
Brad Peterson, partner at Mayar Brown, explains further: “We see a growing number of clients deploying substantial negotiation teams working in an agile way to close smart deals quickly.” Outsourcing to Latin America is predicted to be the popular choice for agile software development.
10. Big companies are loyal customers
The Latin American region is the preference of numerous large technology companies such as HP and IBM. Reportedly, in 2018, nearshore software outsourcing in Latin America accounted for 513 billion US dollars of the entire nearshore outsourcing market.
