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Software Offshoring

Offshoring software development South America

Offshoring software development has been the staple for business from startup, small business, and medium-sized enterprises. Even giant corporations like Google, WhatsApp, Slack, Alibaba, and GitHub offshored their back-end operations from the ground up. There are a variety of reasons behind this decision, but the most one of the most crucial one is to reduce operational costs.

Ever since the offshore software development industry emerged in the tech market, the interest shifted across Asian countries. From India and China to Vietnam, companies in the US availed their services to take advantage of the lower charges.

South America has managed to gradually make its name along with the roster of offshoring destinations. It has recently been preferred by a growing number of businesses when it comes to software development. North American enterprises opt for Latin American developers instead of their in-house teams for projects and several upgrades.

Also on the IT industry’s radar are South American countries such as Mexico, Chile, Argentina, Colombia, Brazil, Uruguay, and Costa Rica. These countries gained a significant role in the software development industry for providing quality work at a low price. Latin Americans’ competitive edge involves real-time collaboration, travel proximity, and cultural similarity, making working relationships easier.

In this article, we shall further discuss the reason behind South America’s popularity for offshoring software development.

 

What Puts South America in the Eye of Offshoring Software Development?

Asian countries, including India and China, have been the leading countries for offshoring developers for a while now. They have contributed to transforming the business landscape, helping establish some of today’s biggest corporations. They provide lower labor costs and a limitless supply of seasoned software developers.

However, South American has begun to catch up. They were given the spotlight with an increasing number of companies that offer projects to Latin American developers.

Let’s take a look at why South America is a favorite of the job market of today.

 

Fewer Problems With Time Zone Alignment and Communication

South America offers convenience with its minimal time zone differences. Both parties don’t need to make significant adjustments to be able to work efficiently. For instance, Uruguay and Argentina are only five hours ahead of California. It is in comparison with China and India that have approximately a 13-hour difference from companies around the US.

Consistent communication is crucial, especially during project development and earlier stages of tasks. When teams can communicate with no interruptions, delegation is efficient. The minimal time zone difference fosters effective communication across the software development team.

Even though both parties are miles apart, you can always guarantee to receive a quick response from your offshore developers. This assurance allows you to detect and resolve any conflict that arises with no delay. On top of that, you can also travel to your offshoring team when necessary. Business travels are more cost-effective even if you come from cities like New York, California, and Seattle.

Get the ultimate offshore software development guide for CEOs. Download my ebook.

English Proficiency

The latest studies have found that Latin Americans surpassed the years of stagnation in English proficiency. South American countries like Peru, Uruguay, Argentina, Ecuador, Chile, Brazil, and Mexico drastically improved and recognized the importance of learning English.

With more people invested in English proficiency, there are more job opportunities for Latin American developers. The growing number of fluent English speakers in the region have provided them with more high-paying jobs and opportunities. For this reason, they have established diverse educational programs and initiatives to encourage more people.

Moreover, one of the drawbacks to offshoring rotates around the cultural differences. Latin America and North America are near each other, so it should not be an issue. They share a long history of trade and interaction in comparison to Asian countries and European regions.

Therefore, misunderstandings are less likely to happen. You can expect an Uruguayan software developer to be more proactive than an Indian developer. They have a better understanding of American culture and work ethic, so they understand what’s at stake. Offshoring Asian developers might expect you to guide them throughout the project instead. They also tend to perform beyond your expectations because they assume it’s not what you want.

What is the Hourly Software Development Rate in South America?

The average hourly rate for a majority of South American countries starts at $45. In the leading offshoring software development destination, Brazil, you can expect developers to charge you around $40/hour. It may cost a little more than what Asian software developers offer, but if you are looking for better coordination, project delegation and quality, the price could be worth it.

About ZirconTech:
A trusted partner that helps organizations thrive in their digital transformations. Mobility, internet of things, artificial intelligence, big data, cloud computing and blockchain technologies.

Pros and Cons of Offshore Software Development

The foundation of every successful business is an adequate workforce. When companies prioritize innovation, growth, and brilliance when forming their team, there are more benefits to it than they realize.

However, building an excellent in-house software development team requires a substantial investment. Hiring software developers internally results in more expenses, including labor cost, renting office space, insurance, furniture, utilities, and so much more. They have to be able to match according to the industry standards, and it’s not cheap.

For small and medium-sized enterprises, software development offshoring is a feasible alternative. They can afford competitive rates without compromising the project quality. To further give you an idea about offshore software development, here are the pros and cons of this business model.

Pros of Offshore Software Development

Knowing the pros of offshore software development can help you decide if this can work for your business.

Reduce Your Development Costs

It is imperative for businesses that have only been starting to reduce their costs as much as possible. Whether you are forming a startup or small enterprise, you have to allocate your budget accordingly. Otherwise, your venture can likely fail.

To focus on the core of our business, it’s best to offshore software development. Hiring software developers outside the US tend to be cheaper than the local market rate. You can find those with the same skill-set and experience to fulfill your business requirements at a lower cost. This option allows you to acquire the best talent without sacrificing the quality of work.

You can utilize the savings to invest in market research, marketing, and performing advancements to improve your products and services’ functionality.

Access to a Diverse Talent Pool

Expanding your horizon allows you to discover a diverse pool of skilled software developers. When you don’t put geographical restrictions to sustain your business, you can explore endless opportunities. You can select a country that has a reputation in tech and find people suitable for your team. For instance, Microsoft and Hewlett-Packard recently started an educational program in Latin America to further develop their skill set in the IT industry. This will lead to a major influx in IT talent throughout Latin America including Argentina and Uruguay.

Ultimately, gaining access to a global talent pool is way cheaper than the latter.

Offers Flexibility

Hiring internally means that you are bound to keep them for the long haul. However, you may find your in-house team struggling to complete piling tasks on the intended timeframe. To strengthen your workforce without spending much, hire offshore developers. You can always halt the contract when you don’t feel like you need them anymore. There’s less commitment involved, and it streamlines the workflow.  Accordingly, you can always opt for offshore developers, especially for short-term and seasonal projects.

Get the ultimate offshore software development guide for CEOs. Download my ebook.

Cons of Offshore Software Development

Despite the numerous advantages of offshore software development, you cannot go down this path without considering its potential disadvantages.

Security Risks

There are security risks involved when offshoring your software development team. Working with them consists of sharing confidential ideas about your project. There can be situations when they potentially steal parts of your concept to earn or establish it as their own. They are geographically distant from you, so making disputes can be complicated. However, you can prevent this in the first place if you have them sign an NDA.

A non-disclosure agreement can protect you if the other party compromises the data you have shared on the duration of the project. It protects your confidential information during the development of the product or software.

Poor Project Quality

Although this only happens occasionally, you cannot always guarantee that they can produce high-quality work. This issue is why you need to communicate to check your offshore worker’s progress and consistently provide valuable feedback.

Often, companies test the offshore team before deciding whether they will take them to finish the rest of the process. It is also an opportunity for you to see their strengths and weaknesses. This testing stage prevents you from wasting your time working with an offshore team that is bound to fail.

Communication-Barrier

Similar to any remote work arrangements, this setting can sometimes result in miscommunications and misunderstandings. More often than not, English is not their first language, so they may not understand some expressions and terms. They might also find it difficult to express themselves better when they struggle with the language.

Moreover, communication-barrier can also arise from time-zone differences. Emergency messages placed outside of the office hours may take a few hours to receive a response, considering they are only just waking up or about to sleep. For requests and approval for actions, it may take until the next day to get their response.

However, most offshoring teams adjust their working hours according to the American market, which allows them to communicate with clients efficiently. These issues are also nearly non-existent when outsourcing to Uruguay and Argentina due to their strong proficiency in English, cultural proximity to the United States, and similar time zones.

 

About ZirconTech:
A trusted partner that helps organizations thrive in their digital transformations. Mobility, internet of things, artificial intelligence, big data, cloud computing and blockchain technologies.

 

The Lowdown on Software Development Offshoring

With the drastic shift in the business landscape in light of COVID-19, small and medium-sized companies have to make extra efforts to remain operational. Every enterprise around the world is trying to survive amidst the devastating effects of the pandemic. This scramble for survival means that they need to pay close attention to their outgoing expenses while maintaining a consistent revenue to stay afloat.

The increasing demand to fulfill software development positions in a digitally-saturated market is certainly not helping. Not to mention the escalating expenses, including labor costs required to sustain an exceptional IT team.

Businesses take the initiative towards offshoring software development teams to address these concerns. From startups, small businesses to medium-sized enterprises, offshoring seems to be the most sensible and cost-effective solution right now.

Offshoring Software Development Transforms The Business Landscape

Offshoring software development transforms the business landscape. It is a huge step, especially for small businesses and the like. Giant corporations have explored this business model long ago and even expanded their offices throughout the offshoring destinations. Ford Motor Company, CISCO, American Express, General Electronics (GE), and Microsoft are only a few of the many enterprises that offshore their back-office operations in other countries like India. Although there might be risks that come with offshoring, it brings several benefits that differentiate the established processes worth it.

Provides Flexibility

Most companies choose to offshore to save time spent on sourcing, recruiting, hiring, training, and onboarding new employees. Offshoring a software development team is much simpler, especially for short-term projects and tasks. If you need developers with a specific skill set that your internal team might not possess, you can access a global talent pool with so much to bring to the table.

Moreover, offshoring software developers means that you get to save the overhead expenses spent on accommodating in-house employees. Offshore developers can access their equipment and software, saving you from training and orienting them on a specific project.

Additionally, businesses can scale their operations. Yet, they like projects that require more workforce and expertise, which they can get from one or two offshore vendors. If you only need a small team to be augmented to your existing employees, they can also make that happen. Software development offshoring gives businesses the flexibility to respond to changes as they occur. It enables them to address issues right away, given offshore developers’ reputation to streamline the time-to-market rate.

Get the ultimate offshore software development guide for CEOs. Download my ebook.

Access to a World-Class Talent Pool

Software development offshoring connects businesses to a world-class talent pool. From full-time, part-time to project-based jobs, you can acquire exceptional developers from all over the world.

Offshore developers mostly work on project-based tasks. Although they are provided with brief targets to hit, these developers take it as an opportunity to demonstrate their skills. Working with diverse companies allows them to gain different perspectives and experiences. This diversity enables them to take initiatives beyond the goal appointed to them.

Distance has never been an issue. There have been countless communication channels and project management tools to keep teams connected throughout the project. When problems arise, teams from the head office are one call away.

Lowers Operational Costs

For businesses looking to reduce their operational costs, software development offshoring can be your best bet. Acquiring a team from outside the country lowers at least 70% of small and medium-sized companies’ operational costs. Common offshoring destinations like India, China, and some countries from Latin America tend to have lower living expenses than the US. For this reason, developers in these countries charge significantly lower.

Finding the Best Offshore Software Development Company

A growing population of companies strives to search for the best offshore software development team. But where should you begin?

Here are ways to help you find the right offshore development company to delegate your crucial tasks to:

Ensure Timely Communications

Timely communications are essential to the success of any project. When working with an offshore development company, you want to ensure they will communicate with you effectively prior to starting a project with them. You can test their communication skills by paying attention to the questions they ask about your project, how quickly they respond to your requests, and their overall professionalism during communications. Additionally, they should staff your project team with a project manager who will maintain consistent communication with you for status updates and all other needs.

Cross-Check Their References

Anytime you hire an offshore development company, always request they provide you with references. How well they handled previous projects can guide you on how well they will handle your project. You can ask for samples of their work to confirm their previous projects were free from bugs and were coded effectively. You can also call their previous clients to discuss their satisfaction with the offshore development company. This gives you an inside look into what you can expect when working with their teams.

About ZirconTech:
A trusted partner that helps organizations thrive in their digital transformations. Mobility, internet of things, artificial intelligence, big data, cloud computing and blockchain technologies.

 

The Ultimate Offshore Software Development Guide for CEOs
Offshore software development services emerged for businesses looking to reduce operational costs while having access to a global talent pool. Recently, the US tech job market has been saturated, which resulted in companies looking for more options.
If you want to get ahead of the crowded offshoring market, check out this guide on offshore software development. Learn why it has been considered reliable and profitable among CEOs and stakeholders.

What will you find in this guide:

What is Offshore Software Development?

Benefits of Offshore Software Development

  • Lower Operating Cost
  • Access to Diverse Talent Pool
  • Focus on Core Business Goals

Augmenting Offshore Developers with Your In-House Software Development Team

Finding the Best Offshore Development Company Partners

  • Prioritize Quality Over Quantity/Costs
  • Are They Reliable?
  • Is Their Time Zone Going to be an Issue?
  • English Proficiency

Where Can You Find Offshore Software Developers?

  • Eastern Europe
  • Asia
  • Latin America

How CEOs Manage an Offshore Software Development Team

  • Impart Your Vision
  • Managing Cultural Differences
  • Communicate Effectively
Get the ultimate offshore software development guide for CEOs. Download my ebook.

About ZirconTech:
A trusted partner that helps organizations thrive in their digital transformations. Mobility, Internet of things, artificial intelligence, big data, cloud computing and blockchain technologies.