The key to success in Latin America software outsourcing

June 18, 2021

Latin America is quickly becoming one of the biggest regions when it comes to software outsourcing, to the point it might even surpass India as the biggest IT outsourcing services provider.

Not only Forbes has a report talking about how Latin america software outsourcing really is the latest boom on this sector, but also statistics and studies made by flatworld solutions show that this region, in fact, is the fastest growing outsourcing destination.

So, with so many companies suddenly setting an eye on Latin america, looking to get the best partner when it comes to IT outsourcing services, it’s time to take a moment and understand the outsourcing market in this part of the world.

IT outsourcing services in Latin America

Whenever anyones talks about outsourcing, regions like India and Europe always come to mind, with the first one usually being everyone’s top option. However, the outsourcing market in those two places are completely different from Latin America.

You see, although it is true India still has way more software outsourcing companies that Latin America currently does, the talent pool in each country is completely different, which of course, influenciates on the way the market movies in each region. No to mention, India is quickly losing popularity, as we stated on our last report, here.

Although the numbers of programmers and software engineers itself in Latin America isn’t as outstanding as in other regions, they keep on growing every day (hence why it is catalogued as the fastest growing industry).

According to a study made by StackOverflow back at the begging of the current year, over a million of software programmes that are active at the moment are working from Latin America.

To be even more precisely, over 400.000 of them come from Brazil, and about 223.000 from Mexico, with Argentina being the third country with more software engineers working in IT outsourcing services.

These numbers are extremely important, specially when you realize they have surpassed the number of developers in Europe! (Again, according to the same study shown before), not to mention the majority of these people are EXPERTS developers.

To put things into perspective, when it comes to Latin America software outsourcing, the market is packed with professional, experienced software developers, which automatically raises both the talent pool of the region, and of course, the competition when it comes to hiring the best option, since most are so good.

Now that you know more about the software outsourcing market in this part of the world, it’s time to take a look at the three keys to success in Latin America software outsourcing, which are: Doing previous research, picking the right country and picking the right company.

1: Doing previous research

We have previously mentioned all the factors you should consider when picking your nearshore development partner, and we truly recommend you to read that blog before continuing with this one.

You see, a key factor to succeed when embarking on a IT outsourcing services partnership is to do you your research, and do it properly. If you don’t, you might end up with a horrible outsourcing partner.

Now, you could say you’re doing your research right now, since you are learning more and more about software outsourcing market in Latin America, but this blog won’t be enough if you really want to inform yourself.

You have to ready about why is it a good idea to pick this region over others, you have to inform yourself on the top latin american outsourcing destinations, you have to read about the pros and cons of this particular region, and really inform yourself on what outsourcing to any country in Latam means.

2: Picking the right country

When it comes to Latin America Software outsourcing, picking the right country should be an easy ride, especially when you consider almost every nation in the region has something to offer.

But since we are here to give you facts to base your decision on, take a look at the TopCoder chart, which places Brazil as the #13 coder country, Argentina as the #14, Peru as the #25, and of course, Colombia as the #27.

There’s also worth to mention that countries like Panama are on the rise when it comes to IT outsourcing services, as we showed on our previous blog about top outsourcing destinations.

Of course, not everything is about the numbers and the quantity of software engineers of each country, there are also two very important factors you should consider just as:

  1. The cost rates of each country

  2. Work environment/work ethic

The first one refers to how expensive or accessible it is to hire IT outsourcing services on each country. Of course, this can vary depending not only on the region, but on the nearshore company itself and on the project that’s about to be developed.

However, according to a study made by Accelerance, the cost rates of a software engineer on Latin America can vary anywhere from 30$ to 60$ the hour. A much more accessible cost when you compare it to the US, where the average rate sits between 100$ to 150$.

As to the second point, meaning work ethics and work environment, we don’t necessarily mean to check the working culture of the software outsourcing company, since we will touch on that subject later, but rather take a look at the conversation statistics and how difficult or easy it is to outsource to a certain country.

3: Picking the right company

By now, we have talked multiple times about the top factors to consider when picking a nearshore company, however, we feel the need to talk a little bit more on the matter.

Let’s say you’ve done your research, picked a country, and are now on the look for a company that offers IT outsourcing services, what do you do now? How do you choose? Simple, you keep in mind three main factors:

  1. The background of the company

  2. Their previous projects

  3. Their working ethic

Of course, considering things as cost rates also matters, but since that directly depends on the scope of the project, we won’t include that on the top factors to consider.

Now, when we said to check for the background of the company we mean doing a regular research on who you’ll be working with, who they are, their team, if they are certificated software engineers on the company or not, and so on.

This goes hand-in-hand with checking for previous experience. It is vital that the nearshore company you’re thinkin to hire can actually prove to you they have the necessary experience to handle projects like yours.

And last, but definitely not least, ask about their working ethics. Ask them how they approach a project, how they carry on with software development processes, what is their Software Development Life Cycle, how do they manage time… Ask them as many things as you want to that will help you get a clearer vision on who you are working with.

If you follow all of these steps through and actually take the time to consider who your next outsourcing partner will be, we guarantee you your Latin America software outsourcing experience will be a complete success.