A complete guide to nearshore software development in Argentina

The combination of a skilled talent pool, cost efficiency, and a convenient location makes Argentina a prime nearshore development destination for countries throughout the Americas. Argentina's IT sector is experiencing significant growth, featuring established domestic giants like Mercado Libre and international powerhouses like SAP, IBM, and Oracle. This growth trend is reflected in the IT services market revenue, projected to reach USD 3.745B by 2029. Furthermore, Argentina's growing IT talent pool makes it an attractive region for staff augmentation in Latin America, allowing companies to fill specific skill gaps with qualified professionals at a competitive cost.

Latin America's prominence in the global tech industry has grown significantly. There's a 156% increase in companies seeking to hire IT professionals in Latin America, especially software engineers, reports Forbes. Argentina stands out as one of the leaders in the region, boasting over 160,000 developers and more than 430 IT firms listed on Clutch. This demand increase compels us to explore the benefits of choosing nearshore software development in Argentina and the complexities of identifying a suitable nearshoring partner.

Benefits of nearshore software development in Argentina

Nearshoring offers a middle path between offshoring and onshoring. You get the advantage of lower costs compared to domestic development without the communication challenges that can arise with offshoring to vastly different time zones. The proximity allows for easier in-person interaction, streamlining communication, and strengthening relationships with your development team. This makes nearshoring software development to Argentina a popular choice for businesses seeking a close partnership to fill specific skill gaps within their local market.

Skilled talent pool

When you do nearshore software development in Argentina, you tap into a vast talent pool of 167,000 skilled developers, including over 51,000 specializing in C# and 52,000 experts in C++. Argentinian IT talent is also among the best in Latin America. According to the Coursera Global Skills Index 2023, it ranks fourth in the region and 30th globally for technological skills, with a strong showing in Data Science (second in Latin America). Argentina's talent is further validated by its IMD World Digital Competitiveness ranking (7th in the Americas) and its placement on the Global Innovation Index 2023 (6th in Latin America). This strong showing reflects Argentina's strengths in creative output, business sophistication, infrastructure, human capital, and research. Notably, Argentina has many science and engineering graduates, with 14.15% of all tertiary graduates specializing in these fields. Argentina's strong English proficiency, ranking first in Latin America on the EF EPI (2023), makes communication and collaboration seamless for nearshore development projects.

Cost-effectiveness

Businesses seeking cost-effective, high-quality software development increasingly turn to Argentina. A growing IT sector combined with a favorable currency exchange rate translates to significant development cost savings, even considering Argentina's inflation. Argentina's large and competitive developer pool keeps hourly rates reasonable, while a lower cost of living than the US further reduces development expenses. Outsourcing also eliminates employer-side costs like taxes and benefits. While developer rates can vary based on expertise (C# shows a wider US-Argentina gap than PHP or React), the overall cost advantage for nearshore software development in Argentina remains substantial.

Time zone overlap

Argentina's time zone offers a significant advantage for North American companies seeking streamlined communication and real-time project management. Compared to New York, Argentina is one or two hours ahead, depending on Daylight Saving Time (DST). Despite a more noticeable time difference with the West Coast (three hours in Standard Time, two hours in Daylight Saving Time), Argentina remains a viable nearshore option due to its overlap in working hours.

Thriving tech ecosystem

Argentina fosters a supportive environment for tech companies, attracting a significant portion of Latin America's startup activity. Buenos Aires hosts nearly 64% of the country's 500 startups. Government initiatives like ANPCyT and the Knowledge Economy Law provide funding and incentives for research, development, and knowledge-based industries, aiming to double employment by 2030.

Read more: Colombia vs Argentina for nearshore technology outsourcing

Finding the right nearshore partner in Argentina

Selecting the ideal nearshore software development partner in Argentina requires careful consideration. While cost is an important factor, a successful partnership prioritizes skills, cultural fit, and location over pure savings. Let's explore the different types of services nearshore providers offer, critical factors to weigh when choosing a partner in Argentina, and valuable tips for evaluating potential partners.

Types of engagement models offered by nearshore providers

Choosing the right nearshore development partner goes beyond location and cost. A crucial factor is selecting the engagement model that best aligns with your project needs and team structure. Here's a breakdown of the common nearshore engagement models offered by providers:

1. Extended team

Perfect for plugging skill gaps in your existing team, team extension involves acquiring individual developers or small teams. These seamlessly integrate with your in-house crew, tackling specific tasks or functionalities within your project. This model grants you swift access to specialized skills, fosters knowledge transfer between teams, and offers flexibility to scale your development team up or down as needed.

2. Managed team

This model is suitable for long-term projects needing a focused team. It assembles a team of nearshore developers solely dedicated to your project, located in the nearshore country. This fosters strong collaboration and in-depth project knowledge within the nearshore team and gives you continuity, dedicated resources, and a high level of control over the development process.

3. Custom software development

For businesses seeking tailor-made software solutions, custom software development lets the nearshore provider manage the entire development journey. From initial concept and design to development, testing, deployment, and ongoing maintenance, they collaborate closely to understand your specific needs and deliver a solution that perfectly aligns with your unique business goals. This comprehensive approach minimizes your workload and leverages the provider's expertise across the entire development lifecycle.

4. Tech consulting

By engaging the nearshore provider's consulting team, you benefit from their expertise in assessing your tech needs, identifying potential solutions, and crafting a strategic roadmap for success. Their insights and recommendations will guide you through complex technology decisions while allowing you to leverage their industry knowledge to optimize your overall technology strategy.

Read more: Software developers in Argentina: talent pool overview

Factors to consider when choosing a partner

Outsourcing is often seen as a way to slash IT costs, especially in regions with large talent pools. However, the best outsourcing strategy prioritizes skills and cultural fit over cost savings. This is especially true when you nearshore software development in Argentina, where a strong talent pool and cultural compatibility with North America can lead to successful partnerships.

Here's why location matters more than just time zone differences:

• Finding the right talent is crucial for project success. Don't compromise on skills just for a lower price tag.
• Effective communication and cultural match. Clear communication and a good working relationship are essential. Consider cultural similarities to improve understanding and prevent misunderstandings.

Location plays a role in both aspects:

• Time zones. Overlapping time zones, like those between North America and Latin America, allow for smoother collaboration and faster problem-solving.
• Cultural compatibility. Matching your company culture with the nearshoring partner's location fosters better rapport and reduces communication issues.

While cost is a factor, a robust and long-term outsourcing partnership prioritizes skills, cultural fit, and location, followed by cost savings.

Selecting a nearshoring partner: 4 key steps

Choosing the right outsourcing company is crucial for your business's success. Although complex, careful evaluation can minimize risks and help you find the perfect partner.

Here's a breakdown of the key steps:

1. Initiate partner discovery

Identify potential nearshore partners that align with your project requirements. Issue a Request for Information (RFI) to gather detailed information about each company's offerings, capabilities, and experience.

2. Shortlist top candidates

Analyze the responses received through the RFI and shortlist a select group of potential partners for further consideration. Focus on partners who demonstrate a strong fit with your specific needs and project goals.

3. Create a comparison checklist

Develop a checklist with weighted criteria to compare each supplier across various aspects:

• Company. Evaluate the company's experience, reputation, financial stability, cultural fit with your organization, and ability to accommodate your future needs.
• People. Assess the staff's experience, retention rate, and level of engagement to understand the team's overall strength and stability.
• Capabilities. Analyze the potential partner's team's technical skills, project management expertise, process knowledge, and relevant language abilities.
• Experience and reliability. Look for a proven track record of success, established methodologies, and strong client references that demonstrate their reliability.
• Infrastructure. Evaluate the nearshore provider's infrastructure's modernity, stability, security measures, and physical space availability.
• Communication. Assess the team's language fluency, cultural understanding, time zone overlap with your team, and preferred communication channels to ensure smooth collaboration.
• Commercials. Compare the pricing model, intellectual property (IP) policies, business processes, and overall cost efficiency each partner offers.
• Location. Consider the geopolitical stability, ease of travel, educational level of the workforce, labor costs, and legal considerations associated with the nearshore location.
• Risk management. Evaluate the partner's business continuity plans, disaster recovery measures, and data security protocols to mitigate potential risks.

4. Use a spreadsheet tool for evaluation

Calculate the scores of the checklist items using a spreadsheet. This allows for transparent and efficient comparison and reporting.

Remember, choosing an outsourcing partner is a long-term decision. A well-designed comparison tool can simplify the process, making it less daunting and ensuring an informed choice for your business.

Read more: Outsourcing software development to Argentina

Wrap-up

Argentina has established itself as a country capable of delivering top-notch software and IT solutions. Its consulting and outsourcing market is well-developed and continuously expanding, with numerous companies and freelancers offering services internationally from Argentina. Companies seeking cost-effective ways to nearshore software development in Argentina with access to top tech talent can benefit from partnering with N-iX. N-iX brings its 21 years of market expertise and established Latin American networks. We can connect you with qualified Argentine developers, minimizing risk and maximizing efficiency through their understanding of local regulations and culture. This strategic partnership will allow you to access Argentina's growing IT sector for high-quality software development at a competitive price, with the added advantage of a time zone only one hour ahead of Eastern Time in the US.