Published on October 21st, 2020 | by Bibhuranjan

Why choose Latin America as your IT outsourcing destination in 2020?

A couple of decades back, the top countries you would hear names of for IT outsourcing and software development globally, were India and China. However, with changing times and rapid technological growth, lots of other countries are making it to the list of top destinations to seek outsourcing services from, and many of these hidden gems are in Latin America. With a vast selection to choose from amidst Brazil, Mexico, Argentina, Colombia, Chile, Costa Rica, and Uruguay, it is indeed a smart choice for US companies to opt for IT outsourcing to Latin America.

Advantages of outsourcing to Latin America

High-quality technical education and advanced infrastructural capacities

The IT industry has been growing rapidly in Latin American countries, with an increasing focus on software development. Costa Rica has its R&D space in San Jose, while Uruguay boasts of the Pando Science and Technology Park, and Chile focuses its tech space in Santiago. Latin American countries are also focused on technical education to give rise to high-quality software developers. Not only do Latin American countries share cultural similarities amongst each other, but there are also similarities in work culture between Latin America and the US, and the quality of work done by Latin American developers is as good as what one would get in the US. These are important factors that lead US companies to consider offshore software development in Latin America.

Time-zones close to that of US tech companies

Offshoring is more of nearshore IT outsourcing for US companies since the time-zones of Latin America are so close to that of the US. Argentina and Brazil have only one hour of the time difference with the US, while Chile and the US operate in the same time zone. This makes real-time collaboration easy and simplifies the work and business process. Combined with the high-quality IT talent in the developer team, this minimal time difference ensures quick completion of projects and puts Latin American countries among the best outsourcing destinations.

Comparative cost-benefit

Seeking software outsourcing from South America, specifically Latin America, is also very cost-effective for tech companies based in the United States. US companies would have to pay a lot less to Latin American programmers than they would have to if they hired US developers. For reference, an average software programmer earns ₡16992861 (USD 28536) in Costa Rica, CLP 23,639,417 (USD 30459) in Chile, USD 22500 in Mexico, and USD 11784 in Colombia. Meanwhile, an average developer in the US earns USD 71508.

Top destinations for nearshore software outsourcing for US projects

Brazil

Brazil, with institutes like the University of Sao Paolo and the Universidade Federal do Rio de Janeiro, is encouraging the growth of its talent pool, particularly in the IT industry. Campinas and Anprotec make up Brazil’s impressive tech park infrastructure, hosting above 6000 tech companies that churn out IT talent by the thousands every year. Brazil also offers a cost advantage as hiring a Brazilian developer will only cost about USD 4963 at entry-level, as opposed to the much higher cost of hiring within the US.

Mexico

Mexico is a valued outsourcing provider for US companies because of the high retention rates of software developers in the outsourcing companies, which ensures that the client gets to work with the same team through the project. Mexico is also popular because the developers can speak English fluently, and can speak Spanish as well. This allows for easy communication and makes Mexico preferable to US tech companies for outsourcing.

Argentina

Argentina offers a lot in terms of outsourcing companies and tech parks like Catalina Nortes, which are involved in cutting edge research and employ high-quality programmers who are talented, have high English proficiency, and are also skilled in agile software and application development.

Colombia

Colombia is a great outsourcing destination because of its high focus on education in general and technical education in particular from universities like the Technological University of Pereira, which foster the development of skilled software programmers. Colombia is also only one hour behind the US, which makes it an excellent outsourcing partner for the same.

To wrap up

To sum up, Latin America is a top destination for software outsourcing because of the myriad advantages it offers US companies that choose to outsource from any of the Latin American countries. A growing and thriving tech space in the form of technological parks, innovative startups, and tech companies populated by skilled multilingual developers and nourished by an encouraging education system, minimal time zone difference with the US, high-quality development work, and cost advantage, are some of the features that make it a wise decision to consider IT outsourcing to Latin America.

Author

Galina Divakova

Galina is Head of Marketing at YouTeam, a Y Combinator-backed marketplace for hiring remote software developers.

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Cover Photo by Austin Distel on Unsplash

Tags: IT latin america, IT outsourcing, IT outsourcing Latin America, software development

About the Author

Bibhuranjan Editorial Officer, technofaq.org I'm an avid tech enthusiast at heart. I like to mug up on new and exciting developments on science and tech and have a deep love for PC gaming. Other hobbies include writing blog posts, music and DIY projects.