Web Development Outsourcing: 8 Reasons to Choose Latin America | Innuy

When American companies hear the word “outsourcing,” they most often think of countries like India or China. However, as the demand for cost-efficient staff augmentation and development projects grows, Latin American countries are poised as the next emerging trend in web development, mobile apps, and staff augmentation. Their close proximity to America, similar time zones, cost savings, and high skill level are shifting the narrative in global outsourcing. We’re not looking overseas for web development anymore. More and more, American companies are looking to their highly technical southern neighbors.
 

Over 300,000 tech jobs are outsourced annually, with those numbers increasing steadily. According to the A.T. Kearney Global Services Location Index, which tracks offshore outsourcing globally, five of the Top 20 countries for outsourcing are in Latin America.

There are several reasons countries like Uruguay, Argentina, Colombia, and Brazil have become the evolving destination for American outsourcing. Uruguay, specifically, has been named a “hidden gem” in web and mobile app development, and it’s easy to see why.

Whether you’re managing a small start-up or a department of a multi-billion dollar company, web development and mobile applications are expensive. On average, a development team in Uruguay can complete a successful project for 30% – 50% less than an American tech company.

Uruguay owes its cost-effective businesses to the country’s affordable hiring rates for quality developers. An experienced and versatile American developer could cost upwards of $100,000 a year in salary. In Uruguay, a full stack developer experienced in Python, Django, or Javascript requires a lower annual salary. With less overhead costs from salaries, companies in Uruguay are able to charge less per project.

If your company website or mobile app requires high-level design functions like intelligent conversational bots, artificial intelligence (A.I.), or progressive web apps, hiring an American developer may prove cost-prohibitive. However, in Uruguay, not only can you hire a development team for one project; it will be affordable to hire the team as an extension of your own company for an extended period of time. This is especially important if your business or department needs a scalable project, and a development team that can assist your tech needs for the long haul!
 

While cost-effectiveness is one of the most obvious reasons American companies choose to outsource development projects, it is by no means the only one–or even the biggest one!

There’s a reason Uruguay–and Latin America in general–is being regaled as the new emerging space for web and app development: The developers are incredibly talented!
 

Uruguay is the leading software exporter per capita in South America, with a “One Laptop, One Child” commitment to technical education as early as elementary school. Industry leaders like IBM, HP, Cognizant, Capgemini, Infosys, Wipro, and US Global have begun making investments in Uruguay, and according to Fortune Magazine, this small country “leads the way in software, easing the path for foreign startups.”

Latin America has been known as a growing hub for advanced Agile development for years.  Offering complex development services utilizing Python, Django, and Javascript, these teams are proficient in creating scalable projects. Panelists have attested that professionals from these countries tend to communicate more openly and directly, with a creative approach towards problem-solving.

Uruguay, specifically, has made a name for itself as one of the world’s most high-quality software testing and quality assurance hubs. Established organizations like Centro de Ensayos de Software have championed education in quality assurance and testing, and TestingUY, one of Latin America’s largest testing conferences, takes place in Uruguay.

The time-zone alignment with North American companies makes Latin America an ideal destination for agile partnerships with a variety of staff solutions. Teams from each time-zone and culture have been proven to enhance and complement each other with the unique set of strengths offered by the Latin American workforce.

One major struggle US companies face when outsourcing to India, China, or Eastern Europe is the immense time-zone difference. Because teams are all the way across the globe, one team is often finishing their workday when the other begins, leading to a lag in communication. Uruguay is only one hour off EST (sometimes two, depending on daylight savings). This full workday overlap makes it easier to include an augmented team as part of regular daily meetings.

Innuy, for example, manages to have seamless interaction with clients by utilizing modern communication channels like Slack. Sharing a dedicated Slack channel allows for real-time discussions during the workday — almost as if you’re chatting with your colleagues in the next room. Outsourced teams from Uruguay often form bonds within their new company, especially during long-term projects, and even share team birthday celebrations through video chat. Clients are welcomed to visit Uruguay offices and share in fun activities. For long-term projects, developers will travel to spend two weeks on-site with clients every quarter, so the teams can build rapport.

Ultimately, even if teams are geographically dispersed, they share a common goal of completing a successful project. When a company from the US outsources to our team in Uruguay, our primary goal is that we truly become an extension of your own company.

Cultural affinity is a critical part of working with a globally outsourced team. Some US companies discover they struggle to overcome cultural differences in how teams approach work.

According to the KPMG Insights from the 2018 Outsourcing Survey, companies cite “poor scope definition leading to multiple, costly change orders post-transition” as a major challenge when outsourcing. Another survey shares, “While outsourcing can save money, it’s not without certain drawbacks. Nearly 50% of employers that outsource say the quality of their service providers and a reactive versus proactive attitude are the most frustrating issues to deal with.”

Due to cultural similarities between companies in the US and Latin America, development teams in Uruguay are less likely to struggle with undefined scope. The United States and Latin America both have deep roots in European history, and have been influenced by similar cultural backgrounds. Developers in Uruguay typically use work styles that American employees find familiar, such as valuing creativity and assertiveness, viewing collaborations as partnerships rather than hierarchies, and building sustainable relationships. Also, teams in Latin America and the United States celebrate similar holidays, which means more overlap in shared workdays.
 

Uruguay teams utilize Agile, a commonly used American development framework. The culture promotes being proactive but also setting realistic goals. Rather than over-promising and under-delivering, Latin American developers move forward in 2-week sprints, and grow progress over time.
 

Design trends also differ depending on the culture. Just because a trend is popular in the United States doesn’t mean it’s been picked up across the globe. From music and fashion to film and web design, different cultures catch onto trends at different times. Latin America, sharing a cultural affinity with the United States, will often be on the same page when it comes to current trends, meaning there’s less of a barrier when describing the visuals and functionality of a development project.

Differing cultures can also impact contract negotiations. Especially for long-term development projects, it’s important to work with a team that shares similar work values — such as meticulous attention to detail, or a similar vision for project processes. Regardless of which country a US company chooses to build an outsourcing partnership with, the real key is that the two companies share values and company culture to create a strong foundation for success.

According to the EF English Proficiency Index, much of Latin America has introduced “an array of new governmental programs focused on augmenting or overhauling English education.”

The EF English Proficiency Index explains, “This reflects a desire among Latin Americans to strengthen their public education systems and give students and professionals better opportunities to participate in the global economy.”

Already, Latin America’s countries score on-par or better than China or India at English-proficiency.

Not only is this bilingual talent useful for American companies who require English-speakers, but it’s also incredible when working with American companies who also serve a Spanish-speaking population. This leads to an incredibly integrated experience, with websites and mobile apps that can easily, accurately, and inexpensively be translated into English or Spanish.

Companies in Latin America are passionate about building energized, engaging work environments to nurture their creative talent.

Unlike the highly competitive, sometimes cut-throat nature of some careers in the tech industry, developers in Uruguay are given a comfortable place to learn and grow. This lack of intense competition means companies are more comfortable being honest about their capabilities — they don’t need to create a “smoke and mirrors” cloud of mystery to overcharge clients or overhype their own ability.

The benefit to American companies is an honest, direct negotiation. What you see is what you get.

Since developers are not seen as dispensable, management takes time to coach and support their team, which creates a workplace people enjoy. This creates a richer sense of teamwork, where colleagues lift each other up, and increase their skills with management support.

The result: A skilled and efficient outsourced team, who will be honest about deadlines and work capacity.

For the past ten years, Latin American–in particular, Uruguay–has been working to establish itself as a global leader in the tech industry. The government has ramped up access to education in the computer sciences, ensured school children have access to technology like laptops, and provided broadband internet to over 99% of their population.

To further their commitment to becoming a global industry leader, the Uruguayan government established 12 free trade zones with the hopes of making the country a hub for outsourcing. Free trade zones come with a number of benefits and incentives, including the elimination of taxes for income, transportation, and VAT. Foreign companies can import goods without tariffs, duties, or inventory tax.

These free trade zones encourage outsourcing by allowing for foreign currency to be used freely and providing tax benefits to foreign companies. With Latin American governments working hard and investing in their outsourcing and tech economy, it’s easy to see why Latin American countries are the fastest growing on the global web development outsourcing scene.

As the global market for outsourcing services expands, Latin America is growing rapidly, taking its place as a leader in outsourcing for web development and mobile applications, as well as many other tech careers. According to the U.S. Bureau of Labor Statistics, in 2020 the demand for software developers will increase by up to 31%, which could mean a widening gap between number of development jobs and number of developers. Meanwhile, a KPMG study done in 2014, Latin America’s annual growth rate through 2017 was projected to average nearly 10 percent, up from 5.3 percent in 2013. The rising demand for developers globally, along with Latin America’s initiatives to support college graduates in computer science fields, leaves Latin American tech companies poised to play a large role in software outsourcing.

With well-established markets in Uruguay, Chile, Argentina, Brazil, and Colombia, Latin America continues as one of the fastest growing destinations for technical outsourcing. Promising lower costs, high talent, and teams within nearby time zones, it’s only a matter of time before Latin America becomes the top destination for outsourcing and staff augmentation.