IT Outsourcing: Latin America vs. India & Pakistan

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Most people are fairly familiar with India as a software outsourcing partner, but Latin America tends to get overlooked. Of course, the latter is a bit pricier, but there are times when it pays to go there for tech talent.

At its core essence, choosing one region over the other comes down to offshoring versus nearshoring. Since each type of outsourcing works better for different types of tech jobs, this article won’t name one region the one-size-fits-all answer to all of your tech outsourcing needs. Instead, I wanted to highlight the circumstances in which both options really shine — and you can determine which circumstances you identify with the most.

The Basic Benefits of Nearshoring in Latin America

Latin America is considered a nearshore partner, which simply means your developer is going to reside within three time zones of you (at maximum). In this case, there’s only a one-hour difference between East Coast USA and the Latin American nations I recommend for nearshoring. Since they’re operating on roughly the same work hours as you, you’ll notice it becomes a lot easier to keep in touch. And as I mentioned earlier, certain projects really require this sort of back-and-forth communication.

Another beneficial aspect of nearshoring (and therefore, Latin America as a partner) is the cultural familiarity you’ll find there. They’re more exposed to American culture than India and Pakistan. So, when you’re weighing two prolific English-speaking nations like, say, Uruguay and India, that little detail becomes a big factor. If you’re comparing an Indian developer with an Uruguayan developer, who is going to pick up on the subtleties of conversation better? When you’ve got the right word on the tip of your tongue but just can’t express it, are they going to understand exactly what you want?

Latin America is Best Suited to Custom Software Development

The key word here is “custom”, due to the level of creativity and thought exchange involved. The process for developing any custom piece of software will be necessarily heavy on communication — and if you want to stay on-course with your project, you’ll need to be in constant alignment with your partner. It’s a matter of positioning yourself to succeed by finishing on time, up to specifications, and within budget. With iterative processes like software development, you can’t afford to hinder yourself by limiting communication.

With a totally offshore partner like India or Pakistan, you can easily get up to a day or more out of sync. It’s bound to happen, actually. Most agencies are big proponents of what’s known as the agile methodology, the point of which is that your project can shift at any time in order to meet the most perfect needs of its users. By doing that, you can avoid building a project for $200,000–$500,000 that doesn’t get used by anyone.

After all, a software product nobody uses won’t create any sort of ROI — namely revenue. If you’re doing daily scrums and standups, two-week sprints, and stakeholder meetings on a regular basis, Latin America is close enough to make that possible.

India is Ideal for Business Process Outsourcing

Think back-office or data entry. Why? Because it’s not as time-sensitive and doesn’t rely on high-touch communication. You’re able to outline a process, and your offshore team is able to complete it without further interaction from you — because you’ve already given them your instructions. India really shines at these tasks, and has as far back as call centers in the 1980s. This is when you can really start to take advantage of the plethora of affordable, Indian talent available, without setting yourself back on deadlines.

Salary Comparison: Dev Rates in India/Pakistan and Various Latin American Countries

I’ve compiled average salary ranges for each of the following nations and ordered them from the cheapest to the most costly. The low end represents early-career or junior developers, while the high end represents senior-level developers with 10+ years of experience. Keep in mind that this data is purely applicable to software developers/engineers, not VAs or scopists. Also note that all salaries listed are in US dollars.

  • Pakistan: $5,400–$13,000
  • India: $7,000–$20,000
  • Brazil: $15,000–$23,000
  • Uruguay: $20,000–$35,000
  • Argentina: $22,000–$30,000

To give one last bit of context, keep in mind that the average software developer’s salary in the United States ranges from $85,000–$100,000+. Latin America may be more expensive than India or Pakistan, but for what it delivers, it’s so much more cost-effective than insourcing in the US.

Written by

Director of Marketing at Rootstrap, Dev Partner for MasterClass, Google, & Quartz. Outsourcing, Nearshoring, & Remote Work Expert. Founder of Shorelisted.com

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