Argentina has an evolving software development sector. Companies continue to outsource software development to Argentina, where they benefit from top-notch services, seamless communication, and expertise.
Understanding Software Development Outsourcing
There is a growing shortage of software developers, prompting many companies to widen their search for highly skilled tech professionals. Because software development is one of the most critical processes for companies in the IT industry, it’s important to find the best developers who will guarantee the production of quality products.
The high demand for talent coupled with the low supply makes it hard for companies to find affordable software developers, which is why many companies choose Argentina and other countries in Latin America for their software development outsourcing needs.
Despite its history of conflict, Argentina has matured into a great technological hub with all the infrastructure and resources to support software development internationally. Heavy investments in education have enabled better training of highly qualified developers. Companies that choose Argentina for their outsourcing needs gain access to these developers at significantly low rates—but there’s more to the country than low costs.
What is Software Development Outsourcing?
Software development outsourcing is a business model in which a company hires an external service provider to work on the technical aspects of a project. Outsourcing is a very common approach to hiring software engineers and other professionals across all industries.
This isn’t surprising given the many advantages of outsourcing software development. Companies of all types and sizes use this practice to build innovative and competitive solutions even if they don’t have the right resources or an internal software development team. Outsourcing also allows companies to focus on core business tasks, manage business operations, and maintain existing software for customers.
Outsourcing companies also offer clients various options depending on not only the engagement models but also the location of the development company: onshoring, offshoring, and nearshoring.
Onshore outsourcing is the process of working with an external software development team located in the same country as the client company. Development costs depend on the country’s hiring and living costs, but since there are no language or time zone barriers, the closer location makes communication easier.
Nearshoring involves outsourcing to neighboring countries. Depending on the location of the client company, this solution often combines reduced or non-existent language barriers with low hiring rates.
Offshoring involves working with third-party vendors from other countries across the globe. Because of the low labor costs, this is the most cost-effective option. The downside of offshoring involves the potential for language barriers and very different time zones causing possible communication issues.
Benefits of Software Development Outsourcing
Software outsourcing is a common practice across all industries because of its many benefits. Nowadays, companies that don’t take advantage of this practice often find it difficult to stand out against their competitors. Some of the top benefits of software development outsourcing include:
- Global talent pool – Outsourcing allows companies to choose from the best software developers around the globe at affordable rates without compromising on product quality.
- Focus on core business tasks – Quick access to global IT talent allows companies to focus a lot more of their time on core business tasks that generate revenue and enhance growth and productivity.
- Cost reduction – Outsourcing software development allows companies to save money by not needing to invest in full-time hiring and recruiting costs. Companies tend to choose vendors from countries where hiring costs for software developers are much lower.
- Faster time to market – Outsourced developers typically have extensive experience in their fields, which translates into an expedited development process. Their efficient methodologies allow them to complete projects even before the established deadlines, reducing the company’s time to market.
- No micromanagement needs – Many outsourced software development teams come with a dedicated project manager who monitors the entire development process and builds the bridge between the team and the client company. In any case, you can count on experienced professionals to deliver high-quality software—no need for micromanagement.
- Scalability – Companies may scale the number of outsourced team members working on their project as its requirements change over time.
- Flexibility – When outsourcing software development, the relationship between the client company and the vendor is flexible. You can adjust your model or contract according to your needs.
- Access to the latest technology – To keep up with the latest trends, companies need constant access to cutting-edge technology. Outsourced professionals are well-versed and experienced in their fields and leverage the power of many tech stacks to create innovative solutions.
Why Outsource Development to Argentina?
Companies choose Argentina for software development outsourcing because of its thriving tech industry and high-quality talent pool. Software development outsourcing services in Argentina are cost-effective and offer time zone compatibility with the United States.
Argentina’s Thriving Tech Industry
Argentina has a thriving IT and software sector that is steadily growing. According to Technavio, between 2022 and 2027, experts expect Argentina’s IT market to develop at an 8.3% Compound Annual Growth Rate with a market expansion of $6,689.71 million.
Argentina fosters a great culture of innovative thinking, and the software development sector continues to grow steadily as programming, software engineering, and development remain in-demand skills.
Argentina is home to several forthcoming and developing tech parks. Some of them include Catalinas Norte and the Technology Park of Litoral Centro SAPEM. These hubs have a great R&D focus, technological transfers, and business incubators. These enterprises encourage businesses to engage with technical innovation and exchange business ideas and knowledge.
The Argentinian government understands the importance of the tech industry and contributes to its growth with tax deductions and campaigns to incentivize training. With women comprising over 45% of applicants for tech jobs in Argentina, the industry continues to empower a diverse workforce.
High-Quality Talent Pool
Companies also choose Argentina as their outsourcing destination because of the available high-quality talent pool. The country has invested heavily in schools and universities, mainly to increase access to education for people of all socioeconomic statuses.
Currently, there are two Argentinian universities listed among the 30 best global universities in the LatAm region. The University of Buenos Aires and the National University of La Plata stand out due to the excellence of their Computer Science education programs.
The large number of skilled students streaming out of universities each year combined with the government endeavors and investments to support higher education strongly encourages companies to choose Argentina for outsourcing software development.
Argentinian software developers are proficient in coding languages such as Python, TensorFlow, SQL, and R. A few of their main tech skills include web development, UX/UI design, cybersecurity, IoT, APIs, AI and ML, and convolutional neural networks.
Cost-Effective Services
Businesses choose Argentina to outsource their software development because the country offers cost savings while still guaranteeing access to high-quality products and a thriving software industry. There is a significant currency difference between the United States and Argentina. As of 2023, one Argentine peso (ARS) is worth less than one cent USD. Argentina’s lower value of currency connects to overall lower wage rates.
A few other reasons contribute to the affordability of software developers in Argentina. Because there are so many software developers in the country, the field is more competitive, which translates to reasonable hourly rates for development.
The cost of living in Argentina is also significantly lower than in the United States. Because of this, Argentinian software developers don’t usually demand the same rates. Additionally, outsourcing to Argentina saves companies from expenses such as employment taxes, Social Security payments, and benefits.
Of course, different levels of expertise and different skill sets always affect the final cost of hiring software developers from Argentina. For instance, in fields like C# development, the difference between Argentina and the US in terms of salaries is sometimes very significant. Other fields such as PHP and React development might translate into smaller rate differences. Still, the gap between both countries is very noticeable.
Time Zone Compatibility
The time zone compatibility between Argentina and the United States is another factor that leads companies to look to Argentina for their software development needs. This country is only 1-3 hours ahead of most major cities in the US. Because software development teams in both countries can work at the same time, Argentina is a great nearshoring destination.
This time zone compatibility is invaluable. Real-time communication and collaboration without gaps or delays translate to shorter response times, quicker resolution of issues, and faster project completion. The time zone overlap helps streamline the entire development process.
Successful Software Development Outsourcing to Argentina
To ensure that companies have successful relationships with their outsourced software development teams in Argentina, they must take some time to consider a few important steps. Choosing the right outsourcing partner is crucial to ensure the best results. It’s also necessary to establish clear expectations, milestones, and quality and security measures.
Choosing the Right Outsourcing Partner
Companies must go through a selection process to find and choose the right outsourcing partner in Argentina for your software development project. The first step is to conduct a complete background verification of the outsourcing provider. Business leaders should check to see if the vendor has the experience and skills needed to complete the project, as well as access to the best infrastructure and technologies. They should investigate the vendor’s reputation, look at reviews and client testimonials, and ask for portfolio samples.
For the most honest reviews and ratings, companies can research potential outsourcing providers on third-party websites. Conducting interviews with the vendor’s representatives is another way to assess the quality of communication. It’s also good for determining if the outsourcing provider shares the same business values as the client company.
Establishing Clear Expectations and Milestones
Companies looking to outsource development to Argentina must make their expectations clear to their IT outsourcing partner. By the time they select an outsourcing partner, companies must have a good idea of the project’s objectives, deadlines, and budget requirements.
Businesses should let their vendors know exactly the reasons that led to outsourcing development, what they want to achieve, and how much they’re willing to spend to still achieve cost savings. The best way to do this is by creating a project plan and a timeline. The company must detail specific tasks, milestones, and deadlines for each development phase. The plan should also include any particular instructions for the developers and a communication strategy.
Non-technical business leaders should ask for assistance from a technical expert to help them convey the requirements and specifics of the project to help prevent critical misunderstandings and errors from occurring later on.
Ensuring Quality and Security
In general, when outsourcing, companies need to establish a plan for ensuring quality and security. They could begin by creating a checklist containing all items that require proper testing before the delivery of the project with the help of their outsourcing partner.
Businesses should also look for outsourcing providers with relevant certifications. The ISO 27001 certification, for instance, means that the vendor adheres to international standards for information security management.
Apart from choosing an outsourcing partner with established security protocols and data access controls, the best way to ensure security is by creating strong legal contracts that protect both parties by defining data security expectations, confidentiality, and liability for non-compliance. They could also include the right to terminate the agreement in the case of a critical data breach or if the vendor fails to meet any sort of security requirement.
The Different Outsourcing Models
Another important factor to consider when outsourcing to Argentina is the factor that many vendors allow businesses to choose among different outsourcing models depending on their needs and requirements.
Outsourcing Development
Software development outsourcing involves a client company fully delegating an entire project or series of projects from beginning to end to an outsourcing provider. In this outsourcing model, the vendor has the responsibility of managing the project and offering the necessary resources including staff, equipment, and infrastructure. The outsourcing provider is also accountable for the results.
There are several benefits associated with outsourcing development. In this model, the vendor handles project management, and there is little to no training required for the outsourced team to complete the project. It’s easy to scale the development teams whenever requirements change, and there is no additional management overhead for adding employees. This outsourcing model also allows in-house employees to focus on core business tasks and needs.
Software development outsourcing is the best option for companies that have to meet tight deadlines and manage daily core business tasks at the same time during the completion of the project.
Staff Augmentation
The IT staff augmentation model allows companies to extend their in-house development team with a few outsourced specialists. Business leaders manage these professionals according to their internal methodologies while still filling a particular skill gap and adjusting to business conditions.
Staff augmentation is cost-effective, considering that companies only pay for the delivered development services, allows for the fast onboarding of specialists, and provides more internal control over the project.
Companies use this outsourcing model because it allows them to find resources quickly. They can also decide on the number of employees needed, their qualifications, and the roles each of them will play throughout development.
However, despite the many benefits of staff augmentation, this model isn’t suitable for every project. It’s a good choice for companies with an in-house team and well-established management that require developers with solid tech stacks—some of which are hard to find in the market—to meet tight deadlines.
Dedicated Teams
When they hire a dedicated software development team, companies work with an outsourcing vendor that provides them with a development team that solely works on their project. The client company plays a leading role in composing the team and selecting the right candidates for each role, according to the project requirements.
While the dedicated team frequently communicates with and works under the direction of the client company, they are ultimately under the responsibility of the outsourcing provider. The vendor handles compensation, taxes, insurance, equipment, software licenses, and any other expenses, while the company simply pays for the work itself.
Hiring a dedicated team reduces overall costs by allowing companies to avoid the additional expenses of hiring an in-house team. The team members are fully dedicated to the project at hand, and it’s easy to scale the team as needed to help accelerate the development process.
Dedicated teams are an outsourcing model that’s suitable for a variety of businesses, from complex long-term projects without defined requirements to early-stage startups or companies that require long-term cooperation and work in a narrow development niche.
Other Great Outsourcing Locations in LatAm
Many companies outsource software development to Argentina. However, there are many other options when it comes to outsourcing in Latin America. The LatAm region has a lot to offer. Companies frequently see it as a preferred outsourcing destination for cost-effective solutions.
Chile
Many companies outsource software development to Chile because it’s a hub for technological innovation. Some of the main reasons why businesses to choose this country for outsourcing include access to highly skilled software engineers and low costs.
The country displays significant developments in several IT areas such as the Internet of Things, big data, sensor applications, and more. The government understands the importance of software development and the impact it has on the country’s economy.
Mexico
Because of the similar time zones between Mexico and the United States, many companies choose to nearshore software development to the neighboring country. Mexico has the second-largest pool of talent in the LatAm region. It’s also an engineering hotspot, a global industry hub, and a source of affordable yet highly skilled professionals.
Some of the services commonly outsourced to Mexico include software development, customer service, graphic design, and application programming. There are multiple government initiatives in place to boost the IT sector, as well as high education standards.
Mexico shares 13 Free Trade Agreements with over 45 countries all over the world, possesses an advanced infrastructure for software development, and has a low employee turnover rate.
Colombia
Businesses also choose to outsource software development to Colombia thanks to its emerging market economy for outsourcing businesses. The low average costs for software developers, a growing pool of tech talent, and a strong start-up scene make Colombia appealing as an outsourcing destination for software development.
The Colombian government began to cultivate a high-quality development environment through the Ministry of Science, Technology, and Innovation. Now, Colombia has a strong ecosystem of universities and tech research institutions.
Argentina: An Attractive Destination for Offshore Software Development
Argentina is rapidly establishing itself as a hotspot for software development services. This evolving technical hub brims with talented professionals equipped to offer companies high-quality and competitive software products at affordable rates. Many foreign companies are recognizing the advantages of partnering with a software development company in Argentina, thanks to its thriving tech industry, a high-quality talent pool, and cost-effective services.
Because of the minimal time difference between Argentina and most cities in the US (just one to two hours), many tech companies view Argentina as an optimal nearshoring destination for their software developer outsourcing needs.
The Latin American region is not limited to Argentina when considering offshore software development. Other prominent locations include Chile, Mexico, and Colombia, each bringing unique strengths to the global software development market.
FAQ
How does Argentina compare to other Latin American countries for software development outsourcing?
Argentina continually ranks among the top countries in terms of tech skills across the globe. The country has highly skilled professionals with talents ranging from software engineering and operating systems to niche, specialized technologies. Two Argentinian universities, the University of Buenos Aires and the National University of La Plata also appear listed among the 30 best global universities in the LatAm region.
What are the potential challenges when outsourcing to Argentina?
Outsourcing to Argentina does come with its set of challenges. Foreign companies should be aware of potential bureaucratic hurdles and the presence of multiple labor unions upholding rigorous standards for working conditions. The historical economic volatility in Argentina might also give some investors pause.
Nevertheless, the myriad benefits—ranging from cost-effectiveness and top-notch technical education to high-caliber outputs—generally make Argentina a favored destination for offshore software development.
