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Software Development Outsourcing to Latin America
In software development since 1989, ScienceSoft provides full-cycle development services in LATAM to help companies plan and implement their software initiatives quickly and at a lower cost.
Software Outsourcing to Latin America: Summary
Software outsourcing to Latin America (LATAM) is considered a more cost-effective option compared to domestic development and comes with lower cooperation risks than offshore engagements, which drives the popularity of this model among US companies.
Steps for outsourcing software development to Latin America
- Analyze the feasibility of in-house development vs. outsourcing under a selected model.
- Choose a reliable development vendor in Latin America.
- Collaborate with your vendor to plan the development process.
- Sign a service contract.
- Transfer knowledge to the vendor and start the cooperation.
A Texas-headquartered IT company with full-scale development centers in Mexico and Europe, ScienceSoft offers multi-domain development competencies and flexible sourcing models to lead your software project to success.
Why Outsource Software Development to Latin America
Growing geopolitical tensions combined with the rising onshore rates and tech talent shortage spur the shift in conventional outsourcing strategies. According to Bloomberg, 80% of North American companies are considering nearshore outsourcing to reduce costs and minimize operational risks thanks to geographical proximity.
The region’s IT outsourcing market is projected to grow at a CAGR of ~13% by 2028, which means nearshoring to Latin America gains even more momentum. The key factors driving the popularity of LATAM as an outsourced development destination are:
Attractive rates
According to Accelerance, the average hourly rates for skilled programmers in Latin America are 2–3x lower than in the US, which makes outsourcing to LATAM a budget-friendly option.
Overlapping time zones
Popular outsourcing hubs in LATAM have minimal time differences with the US, usually zero to just a few hours. It allows for frequent real-time communication between the project stakeholders and easier team coordination, contributing to faster decision-making and problem-solving.
Broad talent pool
With over a million skilled IT professionals and a strong educational focus on STEM subjects, Latin America offers a vast pool of talents well-versed in modern development technologies, including advanced techs like AI/ML, AR, and blockchain.
Thriving IT ecosystem
LATAM’s governmental initiatives gave impetus to building sustainable modern IT infrastructures. The region’s major development centers like Mexico, Brazil, and Argentina are now equipped for uninterrupted nearshore cooperation.
Setting Up an Outsourced Development Process in Latin America
Below, ScienceSoft’s consultants share a sample roadmap to software outsourcing in Latin America and point out region-specific aspects to consider.
1.
Feasibility study
The benefits of nearshoring become obvious as soon as you look at the rates. However, before jumping into outsourced development in LATAM, you need to understand the task scope to outsource and select the fitting sourcing model and nearshoring region.
- Define the stumbling blocks in your development project: lack of particular competencies, low development pace, etc.
- Decide on the project parts to outsource: the entire project, particular software modules, or dedicated development tasks.
- Determine the needed skills and compose resource requirements.
- Compare the TCO and ROI of various sourcing models.
- Select the preferred outsourcing destination based on factors like time difference, average rates, ease of doing business, and ICT maturity. Explore more factors here.
ScienceSoft
2.
Vendor selection
Once you are sure outsourcing to LATAM is viable for your case, proceed with choosing a trustworthy development vendor. Longlist the vendors that support your preferred sourcing model and have experience with the software you need; after that, examine each candidate’s reliability, quality standards, and approach to nearshore cooperation.
Finding skilled talent with low rates in Latin America is a no-brainer. Picking a vendor able to drive a long-term, large-scale project to success despite time and budget limitations requires careful and strategic due diligence. Along with the domain expertise, pay close attention to the vendor’s approach to quality management, remote collaboration, and cross-cultural communication — the aspects directly affecting the success of a nearshore engagement. For this, study the vendor’s portfolio and customer reviews and request sample project health and software quality reports. Security is another crucial aspect to consider. Make sure the vendor has a mature security framework, provides compliance with your relevant regulations, and legally protects customer data and assets.
3.
Cooperation planning
Send a request describing your software outsourcing needs to the chosen LATAM vendor and be ready to negotiate the cooperation terms. The flow slightly differs depending on the chosen sourcing model:
Staff augmentation
- Get CVs and rates of the vendor’s available talents according to your tech stack and FTE requirements.
- Shortlist promising candidates and conduct interviews to examine their hard and soft skills.
- Pick the best talent and negotiate cooperation terms: work scope, staffing duration, performance
Dedicated team
- Get the vendor’s proposal. It should include team composition to implement the required task scope along with time and cost estimates.
- Ask the vendor to select candidates and get to see team member CVs.
- (optional) Interview particular candidates to evaluate the most critical competencies.
Full outsourcing
- Get the vendor’s proposal on the solution design, possible development scenarios, talents, timelines, and budget.
- Decide on the fitting development approach and request a detailed service delivery plan.
- Negotiate the communication model, quality measures, reporting schedule,
Determine business and technical criteria for measuring cooperation success and agree the KPI framework with the vendor from the onset. This will ensure all stakeholders are aligned on the project goals and ways to objectively evaluate project health and software quality.
4.
Contract signing
A well-designed vendor agreement that covers outsourcing terms, responsibilities, payment details, service KPIs, and penalties for contract breaches protects your interests and incentivizes smooth cooperation. ScienceSoft also recommends signing a non-disclosure agreement (NDA) and an intellectual property (IP) rights protection agreement. This step helps bridge the legislative gap between the US and Latin American data protection frameworks, ensuring the security of your sensitive information and full ownership of the delivered software.
We know our clients are true innovators who want to keep their trade secrets safe. We are ready to sign an NDA prior to an introductory call to legally safeguard your data before the actual cooperation start.
5.
Knowledge transfer
Now that the outsourcing plan is finalized and legally fixed, perform the necessary knowledge transfer procedures and start the cooperation:
- Assign the persons responsible for knowledge transfer and regular communication on your side.
- Decide on the collaboration toolkit.
- Provide the vendor with access to your IT infrastructure, available software documentation, and existing software assets (wireframes, prototypes, etc.), if any.
- Establish consistent communication and knowledge sharing. It will help the vendor move faster and perform more efficiently.
Mind that without the proper knowledge transfer, it’s impossible for the vendor to quickly get to work and meet your expectations. At ScienceSoft, we usually provide a list of project-specific data and assets we need to access to make knowledge sharing easier for the client and speed up the onboarding.
ScienceSoft’s Outsourced Development Services in LATAM
Consulting on software development
We assist in software design and project planning and suggest ways to reduce development costs. For you, it translates into minimized implementation risks and optimized investments.
Development of new software
We handle particular tasks (e.g., software design, coding, testing) or take over the entire development project. You benefit from high software quality and 2–3x lower costs compared to domestic engagements.
Modernization of existing software
Our experts help redesign the architecture, code, and tech stack of your software and upgrade it with the required features. You get a modern solution promptly and at a reasonable cost.
Explore ScienceSoft’s Featured Development Projects
What Makes ScienceSoft a Reliable Development Partner in Latin America
- Since 1989 in software development.
- 4,000 successfully implemented projects.
- HQ in McKinney, TX, with development centers in Mexico, UAE, KSA, Poland, Finland, Latvia, and Lithuania.
- Over 500 developers, 50% of whom are seniors or leads with 9–20 years of experience.
- IT consultants and PMs with experience building software for Fortune 500 companies.
- Established partnerships with Microsoft, AWS, Oracle, Salesforce, and other tech leaders.
- Quality-first approach based on a mature ISO 9001-certified quality management system.
- Robust security management supported by an ISO 27001 certification.
- Commitment to long-lasting, mutually beneficial engagements: 62% of our revenue comes from the customers who stay with us for more than 2 years.
What makes ScienceSoft different
We achieve project success no matter what
ScienceSoft does not pass mere project administration off as project management, which, unfortunately, often happens on the market. We practice real project management, achieving project success for our clients no matter what.
We Are Well-Versed in Multiple Software Domains and Industries
Industry competencies
ScienceSoft’s talents have first-hand experience developing software for:
Software types in focus
We create high-quality solutions that help software product companies generate high revenue and non-IT enterprises — digitally transform their business workflows:
How Our Clients Benefit from Software Outsourcing to ScienceSoft
As a nearshore software development partner, ScienceSoft drives the project to its goals no matter what. We apply our tried-and-true development and project management practices to ensure that the agreed budget and timelines are met, that the cooperation flow is predictable, and that uncertainties are addressed agilely.
Here’s how you benefit from our value-centered approach:
Rapid start
We need just 1–2 weeks to analyze your needs, precisely scope the tasks, compose the team, and move to development.
Smooth communication
ScienceSoft is a US-based company with a software development center in Mexico. Our experts apply the US culture, business ethics, and communication style to maintain onshore-like collaboration.
Transparent cooperation
We provide accurate resource estimates at early project stages and never hide potential risks. Our experts consistently report on the development progress and deliver all necessary software documentation.
Guaranteed security
In cybersecurity since 2003, we implement robust security mechanisms and DevSecOps methods to protect your software and sensitive data from all types of cyber threats.
Our Clients on ScienceSoft’s Approach to Development
Bob Penland
CTO
With ScienceSoft, we've been able to reduce our development costs and decrease the timeline on new features and updates. ScienceSoft's attention to detail in how everything is documented and communicated is by far the best of any agency that I've worked with. The communication and agreement process when starting a new project has been by far the easiest to handle and most professional I've seen.
ScienceSoft is a professional and dedicated mobile app development company. Over the past 10 years we've worked on about ten mobile app development projects with them. Their developers performed really well and have rescued us when we were late on delivery. We would certainly recommend ScienceSoft as a highly skilled and reliable service provider.
We appreciate how smoothly ScienceSoft’s developers integrated into the project team. We care about our reputation and we are very grateful to ScienceSoft’s team who maintained a friendly attitude and showed much respect to us and our clients. We can certainly recommend ScienceSoft as competent SharePoint developers and excellent team players.
Software Outsourcing Models to Consider
Typical Roles on ScienceSoft’s Managed Nearshore Development Teams
Business Analyst / Software Development Consultant
US-based
Analyzes your business needs and end-user expectations and elicits requirements for the software. Advises on the optimal development approach and sourcing model.
Project Manager
US-based or Mexico-based
Plans the development flow and resources, composes and coordinates the team(s), monitors the project progress, and reports it to your stakeholders.
Solution Architect
US-based
Architects new software and integration points for its components and required systems. Selects the optimal tech stack. Rearchitects legacy solutions.
UI Designer
Mexico-based
Creates user-friendly UI for the required user roles (e.g., individual users, corporate users, app admins).
DevOps Engineer
Mexico-based
Configures the IT infrastructure, sets up a DevOps environment and CI/CD pipelines.
Front-End Developer
Mexico-based
Develops software interfaces, fixes the issues reported by the QA team.
Back-End Developer
Mexico-based
Codes the back end (including APIs) of your software, fixes the issues reported by the QA team.
QA Engineer
Mexico-based
Designs and implements a software testing strategy, a test plan, and test cases, reports the identified issues and validates fixes.
NB: Depending on the project specifics, we may involve additional competencies, e.g., compliance consultants to create software in accordance with the required legal frameworks or data scientists to design and train advanced analytical models.
Explore the Tech Stack of Our LATAM Teams
Costs to Outsource Software Development in Latin America
The cost of software development outsourcing in Latin America may vary significantly depending on the selected sourcing model and team composition, the solution’s functional complexity and tech stack, as well as user experience, security, and compliance requirements.
ScienceSoft’s average nearshore developer rates range between $50 and $95, compared to $120–$210 for US-based engineers.
Wondering how much your nearshore development project may cost?
FAQ about Software Outsourcing in Latin America
What is the best outsourcing destination in Latin America?
When we decided to open a nearshore development center, ScienceSoft was seeking the answer to the same question. After meticulous research, we confidently bet on Mexico. With the LATAM’s second-largest talent pool and robust IT infrastructure, Mexico offers skilled multi-domain workforce and sustainable technical facilities for remote cooperation. IT staff rates in Mexico are over 2x lower than in the US and up to 30% lower than in other popular nearshoring hubs. Plus, geographical proximity and close economic ties with the US make Mexico the least risky choice for long-term engagements.
How long does it take to set up a software outsourcing process in Latin America?
The timelines to set an outsourced development flow in LATAM may vary from 2 weeks to 4 months, depending on your vendor research, due diligence, and onboarding practices. Vendor selection alone may take up to 3 months, but your efforts will pay off through the smooth cooperation and minimized risks.
Are there any hidden traps when nearshoring to LATAM?
Regulatory differences, differences in quality expectations, and risks of regional economic instability are the three major concerns associated with outsourcing to Latin America. With ScienceSoft as a tech partner, you get complete legal protection under the US legal framework, guaranteed service quality backed by ISO 9001, and minimized economic risks due to having all financial operations handled by our Texas HQ.
How do you price your outsourced development services in LATAM?
ScienceSoft offers flexible pricing models depending on the required services:
- Time & Material, Time & Material with a cap — for consulting activities and Agile development projects with frequently changing requirements.
- Fixed price — for short-term isolated tasks (e.g., feasibility assessment, PoC development) and predictable projects divided by stages (we fix the price for each stage).
- Subscription fee — for regular software support activities.
About ScienceSoft
ScienceSoft is a global IT consulting and software development company headquartered in McKinney, TX, US. Since 2005, we’ve been offering data warehousing services to help businesses develop full-scale data warehouse solutions and advise on how to ensure the success of the data warehouse development process. Being ISO 9001 and ISO 27001-certified, we rely on a mature quality management system and guarantee cooperation with us does not pose any risks to our clients’ data security.