Regional Centers and Global Expansion Across Latin America, regional centers are emerging to help US and European-based companies expand globally. These companies are…
Regional Hubs and Global Expansion
Across Latin America, regional hubs are emerging to help US and European-based companies expand globally. These companies are also outsourcing development to reduce costs, get to market faster and close the internal skills gap. Latin America, in particular, will be a privileged destination for 2018.
While Asia is still a popular outsourcing destination, organizations are realizing the benefits of working with outsourcing companies based in Latin America and moving work there. Here are five reasons why development outsourcing to Latin America will increase in 2018.
#1 in cost savings
All companies want to cut costs, so outsourcing development is an attractive option. Acceleration released the 2017 Guide to Global Software Outsourcing Rates that revealed the cost of various technical roles around the world. Compared to North America, costs in Latin America are drastically lower. For example:
- Junior Developer between US$95 – US$101 per hour; in Latin America, US$25 – US$35 per hour.
- Mid-level developer between $120 – $127 per hour; in Latin America, US$35 – US$45 per hour.
- Senior Developer in the range of US$140 – US$148 per hour; in Latin America, US$35 – US$50 per hour.
- Junior quality control between $70 and $74 per hour; in Latin America, US$20 – US$30 per hour.
- Mid-level quality control between $90 and $95 per hour; in Latin America, US$30 – US$40 per hour.
- Senior Quality Control between $130 – $154 per hour; in Latin America, US$35 – US$45 per hour.
For companies looking for cost-effective solutions, Latin American developers keep costs low without sacrificing quality of work.
#2 Ease of Work
Latin America enjoys distinct benefits over Asia when it comes to working with US-based partners. Latin American countries don't have time zone issues, so US-based companies can collaborate in real time with developers rather than starting and stopping work. Additionally, there are far fewer cultural boundaries, as Latin American countries are more similar to their North American neighbors in terms of work etiquette. Lastly, as Deloitte's Outsourcing Report highlights: “Latin American governments continue to support free trade and promote various English language support programs to attract global service providers and businesses alike.”
#3 Trust is being built in the region
According to a Deloitte survey on outsourcing, 78% of respondents felt positively about their outsourced development relationship. In the same survey, business executives noted that they plan to increase outsourcing by 14 to 36 percent, depending on the business function being outsourced. Deloitte also found that Latin American countries are becoming regional hubs at an increasing rate. All of this points to greater confidence in Latin American outsourcing companies, which are increasingly requested by North American companies looking to expand.
#4 Geographically close
Many companies want to visit their outsourcing partners, and most Latin American cities are much easier to get to than those in Asia. Eduardo Araújo , vice president and general manager of HP Enterprise Services, notes: “There is a very thriving market for outsourcing in Latin America, in part because it is in the same time zone as the rest of the Americas, so it is a natural connection.” Developers based in Latin America can offer real-time support to US companies looking for a closer relationship with their outsourcing partner.
#5 Strong Infrastructure
Latin American city centers, such as Buenos Aires and Santiago, have robust infrastructures, which makes them a good partner for outsourcing tasks. Since almost all communication takes place over the phone or online, it's vital to partner with a company located in an area with high-speed broadband connections and reliable mobile Internet.
As companies of all sizes continue to outsource development, many are realizing the benefits of working with a company based in Latin America. As outsourcing in almost every industry is expected to grow in the coming year, we expect to see more and more organizations partnering with Latin American outsourcing companies for the ease of doing business, high quality of work offered and economical rates.
