Here Are 10 Good Examples of Why Latin America Is an Ideal Location for Software Outsourcing

For companies seeking to develop exceptional products without breaking the bank, software outsourcing is a remarkably beneficial approach. This model of outsourcing has gained immense popularity internationally, although some firms may find it challenging to procure a reliable IT service provider. With numerous businesses just starting out, many lack a clear path forward for their outsourcing journey.

Fortunately, there are multiple approaches to accessing the global outsourcing market. It’s worthwhile to grasp the most favoured outsourcing locations and choose the ones with advanced tech infrastructures. South America has emerged as a popular outsourcing destination for several US firms, owing to the many benefits it offers.

Outsourcing to Latin America

Latin America’s IT industry is expected to have the highest growth rate in the coming decade, with projected revenue growth of 5.3%, two points higher than the global average of 3.3%. Argentina, Colombia, Chile, and Brazil are at the forefront of the software development industry in South America, according to current reports.

Considering the shortfall of qualified IT professionals in various countries, including the United States, high demand for outsourcing to Latin America from North America is hardly surprising. It is anticipated that by 2023, there will be one million more computer science vacancies worldwide than applicants. Therefore, turning to Latin America for outsourcing remains the most viable solution to narrow the supply-demand gap.

1. Affordable

Hiring a software engineer in the US typically costs anywhere from $80 to $150 per hour. On the other hand, Latin America offers a more budget-friendly option for securing a software engineer, with hourly rates ranging from $40 to $70.

2. Time Zone Differences

Often, the time difference between North America and leading outsourcing locations like India can cause setbacks in real-time project collaboration. In contrast, the time difference between Eastern Time and Latin America is only 1-3 hours, enabling greater efficiency in project management and briefings.

3. Excellent English Language Proficiency

Argentina has emerged at the top of the EF English Proficiency Index 2023 rankings for the entire Latin American region. This notable achievement is particularly praiseworthy, given that several Latin American countries have even outperformed India and China in terms of English language proficiency. As a result, bilingual programmers and project managers offer invaluable assets to any company, thanks to their ability to effectively communicate and collaborate across cultures.

4. Significance of Technology-Driven Education

Argentina, Chile, and Brazil are the top three Latin American countries known for their advanced and comprehensive technological educational systems. Argentina has implemented Plan 111 Mil, a government-led initiative that aims to offer training to an additional 100,000 computer programmers over the next four years.

5. Proficiency in Information Technology

According to data from Stack Overflow, Peru, Colombia, Chile, Argentina, and Brazil have significantly larger numbers of skilled programmers compared to India and China. The figures reflect 24,000, 21,000, 18,000, 16,000 and 14,000, respectively, versus India’s 13,000 and China’s 10,000.

6. Advancements in Information Technology Sector

Research conducted by Frost & Sullivan found that the Information Technology (IT) sector in Latin America witnessed an impressive revenue growth of 20.3% between 2019 and 2020. This growth can be primarily attributed to the success of several organisations offering outsourced services.

7. Global Proximity

Geographic proximity facilitates faster and efficient deliveries between Latin American countries and the United States, allowing for shipment reception in as little as a day. Given this, outsourcing from this region is comparatively more practical than IT centres based in the Middle East or Asia.

8. Shared Cultural Traits

Outsourcing software development to countries like Singapore or India can sometimes lead to increased workloads, delays, and needless expenditure due to misunderstandings. It’s thus recommended to consider outsourcing to Latin America instead, which has the advantage of a familiar culture and English speaking natives, both of which limit the possibilities of problems cropping up.

9. Agility in the Development Process

According to Mayar Brown Brad Peterson’s Partner, an increasing number of clients are building sizable negotiator teams and adopting an agile approach to secure cost-effective deals more quickly. It is expected that a significant percentage of Agile software development projects will be outsourced to Latin American countries.

10. Large Enterprises Have Been Dependable Clients

The Latin American market appears to have gained favour with numerous tech giants, including Hewlett Packard (HP) and International Business Machines (IBM). As estimated, Latin America’s software outsourcing sector was worth around $513 billion in 2023, marking it as the most sizeable constituent of the nearby outsourcing sector.

Join the Top 1% of Remote Developers and Designers

Works connects the top 1% of remote developers and designers with the leading brands and startups around the world. We focus on sophisticated, challenging tier-one projects which require highly skilled talent and problem solvers.
seasoned project manager reviewing remote software engineer's progress on software development project, hired from Works blog.join_marketplace.your_wayexperienced remote UI / UX designer working remotely at home while working on UI / UX & product design projects on Works blog.join_marketplace.freelance_jobs