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 Latin America.
Although Latin America 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 Latin 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 Latin America (and outsourcing in general) when it comes to quality, working culture, and other issues that could outweigh the benefits. However, these concerns are a non-issue if you do your due diligence and find a good IT outsourcing partner.
Same Quality, 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 Latin America ranges from $30-$50. 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? Expert IT profiles.
Latin American countries have no shortage of talented programmers with the same qualifications you can find at home. If you browse through freelancing websites you will find no shortage of skilled profiles to choose from. Pentalog has first hand experience working with Latin American developers 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 Latin 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 Latin 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 rather than the rule. Most Latin 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 is enough to convince you then follow the money!
More and more companies are using Latin 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 established companies have decided to use the tech talent available in Latin 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
Latin 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 Latin 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 Latin America
Irrespective of your outsourcing project, you must 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 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.
- Mexico is Pentalog’s destination of choice. We have set up an IT delivery center in Guadalajara which allows us to easily interact with our US clients, thanks to an optimal timezone difference – one hour behind New York and two hours ahead of San Francisco. It may not be the first location 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 identified as having a diverse and dynamic economy and a young, growing population. Companies like IBM have already chosen Colombia as one of their outsourcing destinations of choice and it has the added benefit of being the Latin American Country that is geographically closest to North America.
- Argentina is another popular location with good conditions for IT outsourcing. They have a 64% college enrollment rate which is the highest in Latin 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.
Latin 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.