Why U.S. Companies Nearshore in
By Alejandro Graham
Perhaps this article should be titled “why the heck are companies doing IT development in any country that is difficult to travel to, does not share a common language, does not share culture and is not in a remotely close time zone”.
US companies execute contracts for nearshore IT development work in Latin America to eliminate the issues mentioned above that plague other IT offshore locations such as India, China and Eastern Europe. In the following paragraphs we will explore each area more fully as it relates to nearshore work in Latin America and specifically Tribe10x work in Colombia.
Having spent years in the offshore industry I can tell you that the number one question that most frequently comes up with potential new clients looking at India, China and Eastern Europe is “how do we deal with the time zone issue?” Imagine that instead of a “work around answer” involving “windows of time” and late night and early morning meetings the answer was simply “What time zone issue – there is none”. The issue is eliminated! Latin American offshore locations operate principally in the central and eastern time zones. If you need to call your team at 10am, noon, 2pm or 5pm there is no issue. The time zone issue is eliminated.
Another major issue that comes up with potential new clients looking at India, China, and Eastern Europe is “I struggle with understanding my team in India” or “the language accents are so strong and foreign in China I cannot understand them”. This is a very real issue. Again, imagine if the issue were eliminated. The United States is engrained in the Spanish language and Latin America is engrained in the English language. Because Spanish is so heavily ingrained in US culture the accent is easy to discern when it does exist with the English tested engineers operating for Tribe10x. Decades ago, most Latin American countries began investing heavily in teaching English in their public education systems. Most Latin American countries have pushed hard to make English a formal second language and most have programs to be fully bi-lingual in English and Spanish in this decade. Reducing and eliminating the language barrier has been one of the most positive benefits of having IT development work done in Latin America. Clear and unambiguous communication is key to IT development success.
Major countries in Latin American mirror the United States in overall business thinking and many areas of business law. University teaching and education including technology are similar. Deeper historical roots in religion and overall European influence is similar in nature to the United States. Trade policies and the Monroe Doctrine are unique to the Americas. Simple communication around concepts of deadlines, yes and no answers and business practices are well established. Some countries such as Colombia are some of the oldest democracies in the Americas overall. This has made these locations prime targets for call center and business process outsourcing and now with earlier education initiatives hitting full stride there is a record number of highly trained engineers graduating universities making Latin America, and Colombia in particular, a first choice for outsourced IT development.
Larger numbers of highly talented IT engineers are becoming available in Latin American countries due to overall political stabilization the past 20+ years and a growing labor market. Colombia is graduating over 13k engineers each year and other countries are likewise graduating growing numbers. Online communities and social groups have blossomed resulting in improved networking and faster learning. Most countries have invested heavily into their educational systems, their technology infrastructure and electrical grids and overall global connectivity. Large US corporations have invested in building impressive facilities creating an even larger community and a magnet for talent to migrate to and around. Recruiting high quality talent with years of experience in particular specialties is not only possible but occurring regularly with great success.
Latin America, and Colombia in particular, has changed quite dramatically over the past 20 years. With peace between the government and FARC and heavy investments into infrastructure and educational systems, Bogota was rated safer than 12 major US cities in 2018! While some people may remember Colombia as a dangerous place tied to drug trafficking with related murder rates and kidnapping that has all changed and is considered ancient history by most Colombian residents. Bogota between 2000 and 2016 experienced a 92% decrease in kidnapping and its murder rate is far less than most major US cities including such places as Indianapolis. And Colombia has some of the best rated universities in the Americas. Colombia has invested in their tax incentive zones, their overall welcoming of foreign investment and building entities within their borders. It is now home to a $6.8B technology industry with 1800 registered IT software and services companies, including Google and Facebook and 38 private equity and venture capital funds.
Travel Time and Entry Requirements
Eight major cities have direct flights to Colombia arriving in 4-6 hours of flight time. If you have a US passport you have entry to Colombia and most Latin American countries. Flying to Colombia is no different timewise than flying across the US! Traveling to India, China or Eastern Europe to visit a team is a major planning event requiring weeks of preparation to complete. One must work through VISA paperwork and mail away for approval, the actual trip involves as much as 20 hours of flights with transfers to arrive only then to have to adjust to a major time zone shift only to repeat the process to return to the States. None of this exists with Colombia. Simply book your flight and arrive in 4-6 hours direct. Again, one has to question why anyone would offshore in India, China and Eastern Europe now that Latin America is fully capable of executing on the IT development front. Colombia is incredibly easy in comparison to alternatives. Partnering with Tribe10x in Colombia means you can easily meet in person with your team, get to know them personally over meals and company events, and you can do so as often as you like. This translates into innumerable opportunities to advance your team’s commitment, their knowledge of your company’s vision, mission and goals. It advances team building and overall productivity.
Every company wants to reduce costs. Most want to reduce costs and increase quality. Hopefully in the previous paragraphs we have made it clear that using nearshore services such as Tribe10x can increase your quality and productivity by eliminating language, culture and travel issues. But we can also significantly reduce your overall costs as well. A good rule of thumb is that Tribe10x engineers located in Colombia can reduce your costs up to 40% over US based resources and can be as competitive as India, China and Eastern Europe. The result is that you benefit from all the capabilities above with costs as attractive but without communication, travel and productivity problems.
For all the reasons listed above, Latin America, and Colombia in particular, is the new hot spot to offshore your IT Development. You will find that your productivity is greatly enhanced through the obvious improved ability to communicate and collaborate. We at Tribe10x, look forward to working with you to build you a winning team at any one of our four locations.
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