Latin America is the next Frontier for Technology Outsourcing

The three primary districts of the world contributing to outsourcing development are Asia, Eastern Europe, and Latin America, and each locale has its claim of special benefits and challenges. Inside each of these locales, there are littler sub-regions and cities that offer diverse openings and issues.

While the main focus of this article is on understanding the factors that make each Latin American region unique and valuable, it is important to contextualize Latin America within the global market.

What factors make Latin America an attractive destination for investment in innovation?

To begin with, the region boasts a large and youthful population that is increasingly connected to the global economy. Additionally, several Latin American countries such as Mexico, Chile, Colombia, and Brazil have implemented favorable policies for entrepreneurs, making it easier for startups to get off the ground. Latin America is becoming a thriving tech-friendly region.

Business opportunities have arisen from fundamental issues in various countries, and new industries that address these problems offer a blue ocean of untapped market potential. The emergence of high-tech companies in Latin America has created opportunities for career advancement in sought-after areas such as front-end and back-end web development, data engineering, advanced marketing, and business development.

The fintech boom in the region has resulted in a steady wave of ventures in Latin America. As the banking sector modernizes and innovates, following the digital transformation trend in various countries, the demand for qualified professionals in these areas is outpacing the supply, leading companies to compete for the perfect candidates to fill these positions.

Latin American countries have made significant efforts to create a business-friendly environment to attract foreign investment. Governments in the region have implemented reforms to reduce bureaucracy, streamline business registration, and improve infrastructure. As a result, many Latin American countries rank highly in global rankings of ease of doing business.

For example, Chile is the highest-ranked country in Latin America in the World Bank’s Ease of Doing Business ranking, coming in at number 56 out of 190 countries. Brazil and Mexico are also improving their business environments, with both countries introducing reforms to reduce red tape and improve the investment climate.

Guatemala is a Central American country that has made significant strides in recent years to become an attractive destination for technology outsourcing. The country has a large pool of highly skilled professionals, a business-friendly environment, and competitive pricing, making it an ideal choice for companies looking to outsource their technology needs.

Highly Skilled Professionals

Guatemala has a well-educated workforce, with a focus on technology-related fields. The country has invested in its education system, producing a skilled workforce that is fluent in English and Spanish. Many Guatemalan professionals have experience working with international companies, providing a level of expertise that is essential for technology outsourcing.

In addition, Guatemala has a growing number of tech-related programs and training initiatives, including coding boot camps, which are designed to meet the demands of the global tech industry.

Business-Friendly Environment

Guatemala has a pro-business government that is committed to attracting foreign investment. The country has implemented reforms to streamline business registration, reduce bureaucracy, and improve infrastructure. This has resulted in a business-friendly environment that is ideal for technology outsourcing.

In addition, Guatemala offers a range of tax incentives and benefits for companies that invest in the country. For example, the Guatemalan government provides tax exemptions for companies operating in the technology sector, as well as exemptions for equipment and raw materials used in production.

Competitive Pricing

Guatemala’s cost of living is significantly lower than other outsourcing destinations in the region, which means that salaries and office rents are also lower. This makes outsourcing to Guatemala a cost-effective option without compromising on the quality of work.

In addition, the Guatemalan currency, the quetzal, is stable and has a favorable exchange rate, making it an attractive option for companies looking to save on foreign exchange costs.

Breaking Through Challenges

Although several challenges still persist, outsourcing has experienced a recent surge throughout Latin America. The following four factors contribute to this trend:

  • Latin America is implementing some of the most innovative and dynamic outsourcing solutions, which must deliver a significant decrease in cost or a significant increase in performance, without relying on labor arbitrage.
  • Corporate cultures are changing, and large, family-owned conglomerates are increasingly being managed by professional executives. Additionally, younger and more globally minded members of the Latin American executive teams are more willing and prepared to work across borders.
  • Suppliers are investing in Latin America. In the past, HP and IBM were the dominant players, with Accenture following a competitive but country-specific strategy focused on major markets.
  • Free trade is gaining acceptance. The region’s most significant economic success stories have resulted from leveraging free trade. While Latin America is likely to remain economically more volatile than most markets, companies that invest there have more confidence and options due to a series of free trade agreements signed over the past decade.

Case Studies

BairesDev, a rapidly expanding Argentinian software development company, has grown from 400 to over 2,500 employees since its founding in 2009. The company provides customized development teams for clients across various industries and has a strong presence in the USA. Despite Argentina being ranked eighth in the trade of innovative services by the World Trade Organization (WTO), BairesDev has managed to establish itself as one of the largest software companies by offering innovative and competitive software solutions.

Codebay is a nearshore software development company based in California but with offices in Guadalajara, Mexico. Established in 2014, the company has more than 50 employees in Mexico and prides itself on deliberate planning to ensure successful delivery to its clients. Their slogan, “Software with value,” reflects their commitment to quality. They work with a range of programming languages and are capable of developing mobile applications and web pages, as well as providing program maintenance and support, quality control, and testing.

When considering expanding into the Latin American talent pool, companies have three main options: software outsourcing, staff expansion, and BOT (Build, Operate, Transfer). Software outsourcing may be the best option for companies with development needs but not a tech focus. Staff expansion can be a great alternative for growing companies that need to find quality talent at a lower cost. Lastly, the BOT model allows companies to partner with a local organization to recruit and work with a team until it reaches a sustainable point and transfer a fully functioning office back to the company.

There are generally three ways for companies to tap into the Latin American talent pool:

  • Software outsourcing – For companies with development needs but no tech focus, outsourcing their IT and development to a Latin American-based company can be an excellent option.
  • Staff expansion – Companies looking for quality talent at a lower cost can consider staff expansion. This involves hiring remote employees who are integrated into the central operations of the organization.
  • BOT (Build, Operate, Transfer) – Companies that want to establish a new office or local team in Latin America without paying high U.S. labor costs can opt for the BOT model. This allows them to partner with a local organization to recruit and work with the team until the office is sustainable, then transfer it back to the company.

How can you find a great job opportunity to work in Latin America?

The showcase of technological skills is inspiring and presents an excellent opportunity for Latin American professionals to find promising career prospects in remote companies. The Bridge provides various opportunities for skilled experts in different areas, including UX design, IT (Information Technology), Mobile Technology, Tech Lead, Quality Assurance, Design, DevOps, and others. Additionally, they offer opportunities for professionals in product ownership, management, and design, as well as Agile methodologies.

To conclude, Latin America is a thriving tech-friendly region that will continue to attract foreign investment, and its high-skilled professionals, business-friendly environment, and competitive pricing make it an ideal choice for companies looking to outsource their technology needs. At Allied IT Solutions, we are dedicated to helping businesses stay ahead of the curve by providing innovative and effective IT solutions.

If you’re looking for a reliable and experienced IT partner to take your business to the next level, visit our website at to learn more about our services and how we can help your business grow.

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