Software development outsourcing to Colombia: why it makes sense

Colombia is one of the most attractive locations in Latin America for outsourcing services. Companies from around the world outsource software development to Colombia because it offers a great balance between affordability, proximity to the US, and high-quality work.

The Intricacies of Outsourcing Software Development to Colombia

Outsourcing software development is now standard practice for companies of all industries, types and sizes. And one of the most important steps in outsourcing is choosing the best region and country for your needs.

Although there are several regions across the world to choose from, business leaders often choose to outsource software development to the Latin America region. Colombia is one of the most popular countries for software development services because it offers easy access to expert software developers at lower prices. US-based companies that work with Colombian outsourcing providers also operate in a similar time zone, meaning they enjoy seamless communication and collaboration.

Why else is hiring Colombian developers so attractive? Colombia continually invests in and develops the outsourcing industry, attracting foreign investors and contributing to the country's growth. The government is pushing hard to improve infrastructure and education, encouraging a shift towards data and knowledge-based solutions.

Defining software development outsourcing

Software development outsourcing involves a client company hiring software developers from a third-party vendor to develop software solutions externally for them, fulfilling all project-related responsibilities. This process can range from hiring specialized people to hiring entire teams, depending on the needs of the project.

Often times, companies only need outsourcing providers to handle specific steps or aspects of the development process. Common items that companies outsource include feasibility studies, UX design, software architecture, or software testing.

There are three main types of outsourcing that relate to the location of the outsourcing provider: onshoring, nearshoring or offshoring.

Onshoring occurs when the outsourcing provider and the client company work in the same country. This is the closest type of collaboration because it allows for quick check-ins to ensure all processes run smoothly during development. However, it is also generally the most expensive type of collaboration.

Nearshoring involves companies deciding to hire software developers from Colombia or neighboring countries that share a similar time zone. This approach provides clients with a larger pool of professionals at more competitive prices, while facilitating easy communication and the possibility of in-person check-ins.

Offshoring occurs when a client company outsources software development to a supplier located in a more distant country. This is often the most economical option, which also offers access to an even wider pool of experts. However, companies must deal with large time zone differences, as well as potential language and cultural barriers.

Advantages of software development outsourcing

Companies of all types and sizes benefit greatly from outsourcing software development for several reasons. Some of the biggest advantages of software development outsourcing include:

• Reduced costs : Seventy percent of companies outsource their software development work do so because it helps them save money . Companies also avoid the costs of hiring and investing in new technologies, equipment and infrastructure.
• Filling gaps in the development team: Outsourcing software development is a great way to bring missing skills in-house. Companies can bring together a full team of professionals who help their project come to life, paying only for the necessary expertise.
• Access to global talent : The development of outsourcing means that geographic location does not limit companies – they gain access to talent from around the world. This provides a significant advantage over competitors as it helps overcome the local shortage of IT developers.
• Scalability: Outsourcing providers can easily handle changes in project scope and the need for team expansions. Scaling is never an issue as vendors have access to a broad pool of trained employees with unique skill sets that can meet the project's evolving demands.
• Focus on core business tasks: Since the outsourced development team handles every step of the software development project, the in-house team is free to focus on core business tasks that help the client company grow.

Why outsource software development to Colombia?

Companies outsource software development to Colombia due to the country's great potential in this area. When you turn to Colombian software engineers, you will have access to superior talent at affordable prices. It also shares excellent time zone compatibility with the entire United States.

The state of Colombia's technology industry

One of the biggest factors driving companies to outsource software development to Colombia is the country's stable economic conditions. Experts estimate that Colombia's gross domestic product will increase by 27.52% between 2023 and 2028.

An important factor driving this growth is the country's robust technological ecosystem. Because the Colombian government values ​​the technology industry, there are several laws and regulatory policies in place that play a role in maintaining a competitive business climate in Colombia.

Another factor contributing to Colombia's rich IT ecosystem is its extensive outsourcing experience and large number of highly qualified professionals. In 2022, there are over 62,000 software developers in the country working to provide the best software development outsourcing experience.

Qualified talent pool

Another reason why companies outsource software development to Colombia is its skilled talent pool of software developers. The country has a very large population of technically qualified professionals. With a competitive workforce and robust talent pool, it's no surprise that this country has a significant impact on the global software development community.

Colombia has great computer science and engineering universities. Three of its universities rank among the top 30 global universities in Latin America and the country has one of the highest science and engineering graduation rates in the entire region.

When it comes to skills, Colombian developers rank highly in several areas such as data analysis, statistical programming, databases, and mobile development, according to Coursera's 2022 Global Skills Report . Colombian software developers are proficient in a wide range of programming skills.

Competitive Costs

One of the main reasons that strongly influences business leaders to outsource software development to Colombia is competitive costs. Although Colombian software developers are very skilled, the cost of hiring them is significantly lower than hiring developers from the United States or Europe.

The final cost of outsourcing software development to Colombia depends on the skills, years of experience, and specializations of the developers. However, the final cost of outsourcing to this country typically remains affordable to many countries with a significantly higher cost of living, such as the US and Canada.

Time zone compatibility

There is great time zone compatibility between the United States and Colombia. It is part of the northwest coast of South America – therefore, Colombia shares a time zone with the entire east coast of the USA. Software development teams based in Colombia and the US have up to eight hours of overlap during the workday.

US-based companies choose to outsource software development to Colombia because of this compatibility, which leads to seamless communication, smarter productivity, and higher quality products. Since most in-house and outsourced teams work the same hours, it is easier for them to resolve any issues together at the same time.

For business leaders who prefer a closer connection with their outsourced software development company and the opportunity for greater oversight, nearshoring software development to Colombia is a great option.

Strategies for successful outsourcing

To maximize the potential of outsourcing software development to Colombia, companies need to follow some strategies that will ensure a successful outsourcing process. This includes finding the right outsourcing partner, setting clear expectations and milestones, and prioritizing quality and safety.

Finding the Right Outsourcing Partner

The first step to finding the right outsourcing partner is to thoroughly investigate the supplier's profile. Companies need to check their case studies to better understand the developer's experience and knowledge. Business leaders should work with third-party vendors who have prior experience in an area or industry relevant to the project at hand.

Another important way to evaluate potential outsourcing providers is by checking reviews and testimonials and asking for references. Good suppliers provide consultancy, offer detailed proposals and encourage meetings to better understand their customers' business.

Finding the right outsourcing partner often determines the entire experience with this business model. Companies need to take the time and do their due diligence before confidently choosing an outsourcing agency to work with.

Setting clear expectations and milestones

Before companies begin working with an outsourcing provider, they should establish clear goals and expectations. Knowing why they need an outsourcing provider and what they expect from them helps make the entire outsourcing process a much smoother endeavor.

Clear expectations, specific goals, and defined milestones are crucial building blocks for software development outsourcing success. The more outsourced team members know and understand the project's requirements and objectives, the greater their ability to meet the company's expectations. The conversation between both parties should include a basic explanation of the required product or application, user needs, and business objectives.

Companies should try to maintain constant and clear communication throughout the entire development process, not just at the beginning. The scope and requirements of the project may change during development, as may the client company's objectives.

Prioritizing Quality and Safety

The best way to ensure quality and security in software development outsourcing is by selecting a reliable outsourcing provider. Doing so involves researching their market reputation, track record and commitment to data protection.

Choosing outsourcing agencies with certifications ensures that they comply with international information security management standards. This helps save companies time, money and reputational damage by mitigating cybersecurity risks.

Another great source of security comes from implementing robust confidentiality agreements. These should clearly indicate the scope of the project, ownership of IP rights, restrictions on data use and the consequences of violating confidentiality obligations. For added certainty, contracts should also include other agreements, such as DPAs and NDAs.

Not all countries follow the same data protection laws and regulations. For example, companies wishing to outsource software development to Colombia must understand that the country's data protection laws differ from international standards.

The different outsourcing models

Outsourcing development

The advantages of using this outsourcing model include access to talent and technologies that are not available within the client company's organization at affordable prices. Furthermore, it is a scalable model as you can always change the development team by expanding resources as needed.

Business leaders don't need to worry about training outsourced staff, gaining the ability to focus on core business tasks. Outsourcing development reduces time to market because outsourced professionals complete entire projects much faster than in-house development teams.

Staff increase

IT staff augmentation involves temporarily extending an in-house development team with outsourced professionals from Bairesdev to fill a specific skills gap or adjust to new business conditions. These professionals complement the existing team, using their unique set of skills to help complete a project.

The client company has full control of the project and outsourced employees adhere to the company's methodologies and practices. Business leaders only pay for the services provided and the development process moves much faster.

This outsourcing model allows companies to quickly find employees and decide what roles they will perform throughout development. Companies have the ability to scale resources as needed whenever the project scope changes.

Staff augmentation is best for companies that need to fill skills gaps in their internal team but don't want to recruit more internal employees. It's a particularly good model for companies looking for developers with specialized skills and technology stacks to help them meet tight deadlines.

Dedicated Teams

The dedicated outsourced team works under the direction of the client company, but the outsourced provider handles all financial and administrative responsibilities such as compensation, taxes, insurance, infrastructure and software licenses. This outsourcing model is very easy to scale, depending on the company's needs. It allows for good collaboration and communication between team members and also helps reduce time to market.

Other Great Outsourcing Locations in Latin America

Latin America is an extremely popular outsourcing destination. Latin America's geographic location and time zones make it an extremely convenient nearshoring region for US-based companies. In addition to Colombia, there are some other excellent outsourcing locations in Latin America, such as Chile, Argentina, and Mexico.

Chile

Companies choose to outsource software development to Chile because it is a center of technological innovation. The country offers companies access to tens of thousands of software engineers at low hiring costs. Behind the significant development of several IT areas is the Chilean government, which strongly contributes to the development of new technological and innovative solutions. Currently, it invests a lot in blockchain and fintech.

Argentina

US-based companies often see nearshoring development to Argentina as an attractive option. The country has one of the largest talent pools in Latin America, along with a highly skilled workforce, an excellent IT infrastructure, and very low labor costs compared to the United States and Europe.

In Argentina, the government attracts and supports investments from international companies through legislation and innovative initiatives. Argentine outsourcing providers comply with international standards regarding the protection of intellectual property and personal data.

Mexico

Mexico has the second largest pool of software development talent in Latin America. This county is a software engineering and development hotspot and a source of highly qualified and affordable professionals. The country's proximity to the United States makes it a convenient destination for outsourcing software development. The Mexican government boosts the IT sector and high education standards through multiple initiatives. It also has an advanced infrastructure and a large workforce with numerous bilingual speakers.

Colombia: A Prime Location to Hire Software Developers

Among Latin American countries, Colombia is emerging as one of the preferred destinations for companies looking to hire software developers. It’s not just about its innovative technology environment or affordable access to a skilled talent pool; country time zone compatibility with most areas of the United States is a huge advantage for Agile work environments.

The popularity of agile software development practices emphasizes real-time collaboration, making this time zone alignment especially significant. For companies looking to hire Colombian developers, this means more synchronized work schedules, facilitating smoother project management and timely feedback cycles.

Although Colombia is one of the best regions in Latin America to outsource software development, there are a few other countries to choose from. Companies can also outsource their projects to countries such as Chile, Argentina or Mexico.

Common questions

How does Colombia compare to other Latin American countries in terms of software development outsourcing?

Colombia has a robust technology ecosystem and policies that help maintain a competitive business climate. There are more than 62 thousand developers in the country's talent pool, with access to high-level universities. Colombian developers specialize in different areas such as data analysis, statistical programming, databases and mobile development.