Look South for your Next IT Outsourcing Partner

Michael Neimchick

When someone mentions outsourcing our minds automatically think of a far away offshore destination like India. However, for the US and Canada, outsourcing can just as well refer to nearshore destinations like South America. Although South American is not so geographically close to US startups, the time zone congruence is what makes it a nearshore location. The obvious advantages of outsourcing to South America is the lower cost of labor and common working hours, all or most of your working hours will be the same as your nearshore partner. Many people have concerns about outsourcing to South America (and outsourcing in general) when it comes to quality, working culture, and other issues that could outweigh these benefits. However these concerns are a non-issue if you shop around for a good partner.

Whether you are looking for a nearshore or offshore IT outsourcing partner, South America is full of strong IT profiles that can be found at competitive rates.

 

Same Quality for Half the Cost

Before having the quality discussion let’s discuss cost a little more. The average hourly rate for experienced developers in the US ranges from $80-$150 an hour and in South America ranges from $40-$70. So it is possible to find developers at half the cost of an in-house dev team, but what does your money actually buy? The short answer is expert IT profiles, South American countries have no shortage of quality programmers with the same qualifications you can find at home. If you browse through freelancing websites you will have plenty of skilled profiles to choose from. Pentalog has first hand experience working with South American developers in Uruguay and they have always left our customers satisfied.

If you are worried about language compatibility it is nothing to be concerned about. Argentina is ranked number 19  in the English proficiency index, higher than most other outsourcing locations. Though it is true that some South American countries rank lower on this index, every good outsourcing agency is going to work with educated developers who can speak English.

It is also important to question economic and social stability whenever engaging in any type of overseas collaboration. When we think about South America we imagine countries that are unstable both economically and politically. Venezuela especially comes to mind today as a country in crisis with a ruined economy and a government in turmoil. However this is the exception more than the norm, most South American countries are experiencing economic growth and according to the Marsh political risk map, most of these countries are on par with other worldwide IT outsourcing destinations when it comes to political stability.

If this has not been enough to convince you then follow the money. More and more companies are using South America as an IT outsourcing destination, and the IT outsourcing industry is projected to have a growth rate of 10% by the end of the year. Plenty of startups and grownups are have decided to use the tech talent available in South America and as more and more companies make this decision the IT outsourcing industry on this continent will continue to grow and improve.

Agility | The International Office Culture

South America and North America both have cultures influenced by Europe so there are some similarities and of course some differences, but nothing that prevents professional collaboration. Anyway, when it comes to working culture, Agiliy has no national boundaries. Offices anywhere can be made Agile and it is easy for Agile teams to work together as long as long as they keep a strong line of communication. Having either a small or non existent time zone difference helps to ensure communication and allows for feedback to flow easily between the offices of your and your nearshore partner.

All of Pentalog’ teams are Agile, our developers based in South America, Europe, and Asia are well versed in Agile methodologies. Our teams work with clients all over the world and Agile methodologies have helped us assure fast deliveries and a shorter time to market for our clients no matter their location.

The Best IT Outsourcing Locations in South America

No matter your outsourcing project, you need to do your homework to determine both the best IT outsourcing destination and the best outsourcing partner. For the US and Canada, Latin America is the really the only nearshore option available. However there are many destinations to choose from in the region and you can shop around to find what best fits your needs:

  • Uruguay is Pentalog’s destination of choice. We have set up an IT delivery center in Montevideo and our clients have not been disappointed with our teams there. It may not be the first country you think about when it comes to outsourcing but we can attest that their IT profiles are as strong as in any other country in the region.
  • Colombia is one of the CIVETS countries (Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa), a list of emerging economies made by economists which are identified as having a diverse and dynamic economy as well as a young and growing population. Companies like IBM have already identified this as one of their outsourcing destinations of choice and it has the added benefit of being the South American Country that is geographically the closest to the United States.
  • Argentina is another popular location with good conditions for IT outsourcing. They have a 64% college enrollment rate which is the highest in South America. Also, in the early 2000s, Argentina was home to the majority of startups in the region. Even if this is no longer the case there are still plenty of experienced developers to be found in the country.

South America is also a viable choice for European countries as an alternative to using offshoring destinations in Asia. It can even be used in addition to Asia in order to give your company 24 hour coverage around the globe.

Contact us today if you are interested in working with a team of expert developers in South America, Europe, or Asia.


Tag: Agile, Offshore, it outsourcing