Latin America Software Outsourcing: Everything You Need To Know

Private-equity and venture-capital investments in Latin America set new records in 2019, exceeding $15 billion. Software outsourcing in the region has also grown exponentially, as companies become more comfortable taking advantage of the opportunities there.

Universities in Latin America have robust IT programs and yield enough programmers to easily honor software outsourcing commitments. Although outsourcing costs tend to be higher than in other regions, it remains a bargain compared to hiring your own software engineering team in North America. The workday overlap due to aligned time zones also allows for highly collaborative software-development methodologies such as Agile and Scrum.

Key advantages of offshore development in Latin America include:

• Full workday overlap with North America, facilitating real-time collaboration

• Excellent English language skills and cultural similarities

• Close travel proximity, allowing face-to-face visits with your software development team

Here's a look into what you should know about outsourcing your software development work to teams in Argentina, Colombia and Peru:

Outsourcing to Argentina 

Argentina has both an advanced economy and a talented pool of programmers, thanks to its high rates of literacy and tertiary enrollment. During the dotcom boom, the country was home to approximately 65% of the design and implementation of the region’s internet startups. Software outsourcing rates tend to be more expensive in the capital Buenos Aires, but the cities of Cordoba and Mendoza are emerging as satellite tech hubs. 

Western companies find it easy to collaborate and communicate with software development teams in Argentina, which has the strongest English language skills in the region. Like Americans, Argentinians approach both their work and life in general with a can-do attitude. Their knack for discovering innovative solutions is a direct result of their desire to make things work with the tools and materials at their disposal. In fact, they have a saying, “Lo atamos con alambre”, which translates literally as “tying it with wire”. In other words, “Just make it work!”

Outsourcing to Colombia

Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa are collectively known as CIVETS. Identified as emerging market economies, they are favored by economists because they have sophisticated financial systems, controlled inflation, an increasing population of young people, a variety of exports, expanding foreign direct investment, and geo-strategic locations. Of the CIVETS countries, Colombia offers some of the best outsourcing opportunities. A member of the OECD, it has a Westernized culture, is geographically close to the United States, and – like other outsourcing destinations in Latin America – operates in a similar time zone. 

The number of graduates in engineering, computing and other areas related to IT has doubled in Colombia since 2010, adding to the already sizable software development workforce that demonstrates familiarity with a variety of technologies and development processes, including Agile and CMMI. The country’s infrastructure rates as one of the best in the region, with a network of submarine cables providing stable connections and faster data transmission.

Colombia’s IT industry has grown 38% since 2016, and is now the fourth largest in Latin America. In an innovative approach, eight specialised regional clusters have been established throughout the country. Big data is one of the fastest emerging technologies, with public and private partnerships in academia leading the way, and virtual reality companies are intensively involved in app development. 

The magical quality that seems to define Colombia, though, is something that permeates the culture itself. Colombians have an optimism and enthusiasm that’s contagious. Regardless of project roadblocks or challenges, they find ways to make things work – it’s the kind of attitude that goes a long way to ensuring success. The major centers of software development outsourcing are the capital Bogotá and the city of Medellín, further north. 

Outsourcing to Peru

Once mired in political turmoil, Peru is a vibrant country with a stabilizing economy. Many businesses are seeing investment opportunities there, with service providers in other Latin American countries setting up operations there, focusing on web and mobile applications. When hiring programmers, they're exceptionally picky, selecting only the best of the many bright, technical engineers graduating from Peru’s top universities. These engineers are fluent in English and familiar with the business culture and mindset of the United States. 

Foreign direct investment continues to rise in Peru, which has the potential to be a center for innovation, according to an Oxford Business Group report. The 2019 Peru Service Summit, where investors met with almost 200 businesses across a range of industries, generated deals worth US$160 million – almost half of them in software. 

As well as its expanding outsourcing opportunities, Peru has a fascinating history and is an increasingly popular tourist destination. The capital Lima is the main tech and business hub, but most travelers head southeast to Cusco, the ancient Inca capital and the gateway to Machu Picchu, where the remains of a 15th-century citadel are considered one of the seven wonders of the modern world. 

To find out more about outsourcing software development to other countries in the region, including Brazil, Costa Rica and Uruguay, download our 2022 Guide to Outsourcing in Latin America.

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