Choosing an IT outsourcing services vendor can be a major challenge, especially if you don’t have a lot of experience with outsourcing. The first issue you need to tackle is deciding on where you will look for a software development outsourcing partner.
Do you opt for offshore or nearshore outsourcing? Should you go with the most popular countries for outsourcing or try something a little different?
Or you might be tempted to skip this decision in favor of getting quotes from a bunch of different locations and vendors, and then choosing the best one. After all, why limit your options, right?
At PSL, we have three decades of experience with IT outsourcing and if we’ve learned one thing, it’s that geography plays a massive role in the success of a project. This is why we advocate for nearshore outsourcing and why we feel Latin America is the best place to find an outsourcing partner. Here are five reasons why.
There are quite a few reasons to choose Latin America as your nearshore outsourcing destination. These include great value, cultural similarities, and investment with an eye to the future.
While prices in Latin American might be higher than places like China or India, the benefits far outweigh absolute costs. It’s not enough for companies to focus on the cost benefits, because Asia will always win. When you factor in the fact that you’ll be spending more time trying to connect with your vendor in Asia than in Latin America, the end costs might be very similar.
The rate for a junior software developer from Latin America usually is between $35 and $44, while one from Asia will cost between $18 and $24. However, Latin American developers bring far more to the table.
Thanks to how close Latin America is to the United States, the time difference is almost negligible when compared to India or China. In some cases, there’s no difference at all. This means that you’ll have almost a full workday of overlap with your nearshore outsourcing team.
The number of issues that stem from time differences cannot be discounted and can often lead to massive delays. These delays can increase the cost of the project significantly, especially if its an essential component of a larger project.
This proximity also means that it’s easier and cheaper to get there. Since the key to success in any IT outsourcing endeavor is building a strong relationship with your team, being able to hop on a flight, visit your team, and return within a few days is invaluable. It’s also something you can do with far greater frequency than if you were outsourcing to India.
Another advantage of proximity is the similarity in culture. Latin American culture is similar enough to U.S. culture that intercultural communication goes much smoother.
For example, Latin Americans will have no problem telling you if they can’t do something or suggesting more effective alternatives. Conversely, in Asia, saying no or contradicting your client (even for their benefit) is simply not done. It’s considered a lack of respect.
All this will eventually lead to far greater value over the long term as miscommunications and delays are reduced.
Creativity is essential to innovation, which has become essential to remaining competitive. You will find it difficult to innovate when you are working with an IT outsourcing team who will never come up with new ideas or more efficient ways of doing things because it’s not how they’ve been brought up to think.
In Latin America, creativity is a way of life. Combined with their lack of timidity in expressing themselves, people from this area of the world are great partners for any company that wants to innovate.
If there’s a more efficient way of doing something, or if your idea isn’t quite as great as you believe it to be, Latin Americans will tell you.
This creativity is also great when it comes to problem-solving. Where an Asian team will wait for clear instructions on how to solve an issue, even a minor one, a team from Latin America will at least try to find a way to solve the problem.
Latin Americans are also incredibly loyal, which means they have an outstanding work ethic. It’s not unusual for a nearshore outsourcing team to work all hours of the day and night to get a project done on time. This loyalty also means they generally consider your success as their own, which means they will move heaven and earth to deliver above and beyond your expectations.
Conversely, in Asian countries, while they also have an excellent work ethic, it has far less to do with emotion. Since they are less emotionally invested, they very rarely go beyond what you ask of them.
Many governments in Latin America have realized that the IT industry can provide them with significant growth independent of issues such as poor infrastructure. While the latter poses a problem for other industries – poor roads inhibit transport, for example, and bringing them up to snuff requires significant investment – this is not the case for the IT industry.
After all, with software development all you really need is a computer and an internet connection.
To this end, many countries in Latin America have been investing heavily in IT, especially in education and training of tech workers.
For example, Colombia initiated a program called “IT Talent” on which they spent $30 million in 2018. The country also covers 80% of the cost of training for anyone who wishes to work in IT. They’ve also trained over 6,000 people via “Plan Vive Digital”, another program meant to increase the number of IT workers.
In other words, not only will you have access to a growing pool of talent, but also working with countries that understand the importance of IT outsourcing. They’re doing their best to create an attractive business environment, which is certainly a positive for any company looking for software development outsourcing partners in this region.
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