As a Nearshore Software Development provider, we’re constantly on the lookout for emerging tech talent across Latin America (LatAm).
And lately, it’s Colombia that’s caught our eye.
Colombia offers what every successful outsourcing model needs: a wealth of highly skilled talent, cost-effectiveness, and logistical convenience. It’s this combination that will help our clients drive growth in 2024 and beyond.
Want to leverage all that Colombia has to offer?
Follow this short guide and learn what work you can outsource, the benefits you stand to gain, how to avoid any pitfalls, steps to success, and more.
- The Rise of Colombia as an Outsourcing Haven
- What Work Gets Outsourced to Colombia Most?
- The Benefits of Outsourcing Software Development to Colombia
- Navigating Challenges in Outsourcing to Colombia
- Practical Steps to Outsource Software Development to Colombia
- Outsourcing to Colombia: A Real Life Success Story
- The Future of Outsourcing in Colombia
The Rise of Colombia as an Outsourcing Haven
Colombia is a country known for its quality coffee and glittering emeralds—two things they export regularly.
But the country’s natural goods aren’t all they have to offer. It turns out they’re rich in tech talent and services-based talent, making them an increasingly attractive outsourcing partner option for US businesses.
Just look at how dominant the services industry was for Colombia in the 2010s:
In 2019, nearly 63% of private sector employment in Colombia was related to the services industry. While the data doesn’t include the past few years, other sources indicate economic growth.
Statista’s prediction is that Colombia’s gross domestic product will increase by 27.52% between 2023 and 2028. When you consider that alongside the prevalence of the service industry (which will include the outsourcing sector), it’s easy to see that it’s driving much of that projected growth.
The country has also put an emphasis on education and training. They’ve even set a goal for themselves: to become the best-educated country in Latin America by 2025.
That determination will only increase interest in their skills from abroad and create a highly educated workforce over time.
Another reason for the rise in technology outsourcing to Colombia? Like the rest of Latin America, it’s cost-effective and convenient.
The shared or similar time zones make for effortless collaboration that further outsourcing destinations like Asia struggle with.
📚Further reading: Top Latin American Countries for Nearshore Software Development [2024]
What Companies Outsource to Colombia Most?
In Colombia, the most popular outsourcing services are related to:
- Software development
- Call centers (customer services)
- Business processes (accounting, Human Resources, etc.)
Software Development
Colombia is a top destination for outsourcing software development work. We’ve witnessed it ourselves and been part of the movement.
At HatchWorks, we connect Colombian Software Developers with US businesses in need of top talent at lower costs than they’d get in North America. We’re able to because there are so many talented developers to choose from.
In fact, we recently announced the opening of new offices in Bogotá and Medellín, Colombia, marking a significant expansion of our global operations and further solidifying our commitment to leveraging the rich pool of Colombian software development talent.
In 2022, Statista reported that Colombia boasted 62,000 software developers.
These Colombian developers are known for their expertise in various modern technologies and their ability to adapt to rapidly evolving software development trends.
"At Hatchworks, we've seen firsthand how Colombian software developers stand out in Latin America's tech industry. Their expertise in software development is impressive and consistently meets our clients' needs. They're a key part of why Latin America is excelling in technology."
Randall Ramirez
Senior Director of Engineering, HatchWorks
Business Process Outsourcing (BPO)
Business Process Outsourcing, refers to the practice where a company contracts out certain business operations to an external service provider. These outsourced services or processes typically include non-primary business activities that are essential but not part of the core business functions.
In 2021, Colombia led the Offshore BPO Confidence Index with a striking 90.9% rating. This confidence stems from Colombia’s strong infrastructure in telecommunications and IT, coupled with a skilled, cost-effective workforce.
These factors enable Colombian BPO services to offer high-quality, reliable solutions that align with global standards.
Call Center Services
Colombia ranks third in Latin America for call center services, a testament to its capabilities in this sector.
And when you think about it, using Colombia and other Latin American countries is a natural fit for call center services focused on the US. While English is our most widely spoken language, Spanish is second.
So if a Colombian call center employee is fluent in both, which they would be, then they can speak in whichever language is easiest for the person they’re calling.
The Benefits of Outsourcing Software Development to Colombia
Of the three services we often see outsourced to Colombia, it’s those with software development needs who benefit most from the country’s talent, proximity, and cultural affinity.
Think about it—software development is an in-demand skill. It’s also an expensive one. Outsourcing it to a more cost-effective destination can save your company thousands of dollars.
But why not outsource to Asia? You could, but software development projects require seamless communication and collaboration. That’s much easier to achieve with an outsourced team in a similar time zone.
When outsourcing software development to Colombia, you get:
- Access to skilled talent
- A cost-effective alternative to hiring or onshore agencies
- The convenience of working with someone in a similar time zone
Let’s look at each in turn.
Access to Skilled Talent Pool
Colombian software developers are known for their proficiency in a range of programming languages and frameworks, making them adaptable to various project requirements.
So of the 62,000 software developers reported in 2022, you’re destined to find ones who are experts in areas you need them to be.
Don’t want to spend the time sourcing them yourselves? You can work with HatchWorks. We’ll do the hard work for you and make sure you have the exact talent you need in the budget you have. Learn more about our Nearshore Software outsourcing services here.
Cost-Effectiveness Without Compromising Quality
When compared to other popular outsourcing destinations, Colombia stands out for its cost advantages, offering competitive cost structures without sacrificing the quality of its deliverables.
Labor costs in Colombia are generally lower than those in North America and Western Europe, which translates into significant cost savings for businesses without compromising the standard of work.
This cost advantage, coupled with the high level of expertise available, means companies can achieve the same or even better results at a fraction of the price they would pay domestically.
Convenient Cultural Affinity and Communication
When US companies outsource software development to Colombia they’ll find developers proficient in English as well as few cultural barriers.
Did you know the Colombian government is structured similarly to our own and that our shared European roots influence religious beliefs?
We even watch the same Netflix shows.
These details might seem irrelevant to working together but cultural similarities can bleed into how we as societies approach work. And that can impact how well we collaborate and communicate on projects.
📚Further reading: 8 Outsourcing Myths Debunked: Our Deep Dive into Common Misconceptions
Navigating Challenges in Outsourcing to Colombia
Outsourcing to Colombia, while advantageous, does present specific challenges. Addressing these effectively is crucial for a successful partnership.
Below, we’ve outlined three common issues US businesses can face when outsourcing to Colombia and how they can overcome those challenges.
They are:
- Overcoming language barriers
- Addressing infrastructure and connectivity
- Avoiding geopolitical interruptions
Overcoming Language Barriers
English proficiency in Colombia has improved, especially in urban areas. However, understanding workplace jargon remains a hurdle.
To mitigate this, many Colombian outsourcing firms invest in language training, focusing not just on general proficiency but also on the specific linguistic needs of their industry.
This ensures that their workforce is not only bilingual but also familiar with the technical vocabulary and nuances of their clients’ businesses.
Companies outsourcing to Colombia should, however, remain mindful of potential cultural and language differences and nuances and maintain clear, jargon-free communication to ensure mutual understanding.
Addressing Infrastructure and Connectivity
Not every country has the robust internet infrastructure and wifi that the US does.
And in parts of Colombia, the most reliable internet connectivity may be patchy. This can interrupt projects and communication between teams especially since the tech industry is so reliant on digital tools.
The good news is that the country has invested in enhancing its internet connectivity and technological infrastructure which will better support the demands of the global outsourcing market.
These ongoing developments are vital in ensuring reliable and efficient operations, especially for technology-driven services like software development and the BPO sector.
Businesses looking to outsource to Colombia should stay informed about these infrastructural advancements to gauge the reliability and capability of their potential outsourcing partners.
Avoiding Geopolitical Interruptions
Like many countries, Colombia faces its own set of geopolitical challenges that can potentially impact outsourcing relationships and foreign investments.
Political stability, foreign investments, economic policies, competitive costs, and regulatory changes are factors that businesses must consider when outsourcing to any foreign country.
Building strong relationships with local partners who have a deep understanding of the Colombian market can provide valuable insights and help mitigate risks associated with geopolitical uncertainties.
At HatchWorks, we prevent disruptions to projects from geopolitical factors by sourcing talent from multiple LATAM countries. That way, if Colombian software engineers can’t continue a project, there are other developers on hand to pick it up.
Practical Steps to Outsource Software Development to Colombia
If outsourcing to Colombia feels like a natural fit for your business needs, there are a few things to consider to ensure success.
Identifying the Right Partners
Finding a reliable outsourcing company in Colombia is crucial. Start by researching the outsourcing company’s track record and client testimonials to gauge their reliability and quality of work.
Look for firms that have experience in your specific industry or with similar projects. Networking within industry circles and attending tech conferences can also provide valuable insights and contacts. You’ll also want to assess the company’s technological capabilities and whether they align with your project needs.
As we mentioned before, HatchWorks can do this for you. We’re US-based with teams across LatAm, including Colombia. We’ve recently been recognized as one of Colombia’s most reviewed B2B companies by The Manifest, showcasing our strong client relationships and high-quality service.
Legal and Compliance Considerations
When outsourcing to Colombia, it’s important to be aware of legal and compliance differences, especially in data protection laws.
Colombia’s data protection regulations may differ from those in your country, such as GDPR. Ensure that the outsourcing partner understands and can comply with the data protection requirements applicable to your business.
This might involve drafting clear agreements that specify how data should be handled and protected. Consulting with legal experts familiar with Colombian and international data protection laws can provide guidance and help mitigate risks.
Establishing Effective Communication Channels
Establish clear communication channels and a shared development process from the outset.
Utilize a variety of tools for different purposes – video conferencing for regular meetings, instant messaging for quick updates, and project management software for tracking progress and deliverables.
It’s also important to establish a regular meeting schedule that accommodates the time zone differences, ensuring that both teams can collaborate effectively.
Outsourcing to Colombia: A Real Life Success Story
When it comes to bringing the benefits of Colombian outsourcing to life, there’s no better example than when we worked with a leading cybersecurity consultancy to develop a prototype machine learning service.
Their Nearshore team consisted of software developers from all over LATAM, including Colombia.
They contributed significantly to developing a machine learning model that streamlined the review process of compliance documents. This technological innovation not only enhanced efficiency but also significantly reduced manual labor and error rates. The involvement of Colombian developers was pivotal in blending cutting-edge technology with practical, business-centric solutions.
This example is a testament to the potential and value that technology outsourcing to Colombia can offer, particularly in projects that require innovative and technically sophisticated solutions.
“It has been a pleasure working with HatchWorks for almost two years now. They work seamlessly with my team, have overlapping time zones for efficient Agile development, and have a governance model to ensure success.
HatchWorks has become our partner for several successful ongoing projects.
I like their US-based Headquarters, and quality delivery teams working in Latin America. I plan to continue working with HatchWorks for our mutual journey and partnership.”
-Chief Technology Officer @ Cybersecurity Consultancy
The Future of Outsourcing in Colombia
The future looks bright for businesses that outsource to Colombia and for the Colombian labor force who have the opportunity to develop in-demand skills.
As innovative solutions in areas like AI, machine learning, and cloud computing grow, Colombia’s outsourcing industry is poised to play a significant role in meeting these needs.
Predictions suggest that Colombia will not only sustain its current outsourcing capabilities but will also evolve as a hub for high-value, tech-driven outsourcing solutions.
With the right outsourcing partner and a strategic location like Colombia, North American companies can take advantage of this favorable business environment.
If outsourcing software development services to Colombia is in your future, get in touch with us here.
We can walk you through your options and get you started in as little as two weeks.
Tech Talent Report 2024
Get key insights into the tech environment in South America, highlighting how its political, economic, and technological aspects can propel your business growth. Navigate LatAm’s software development industry confidently with HatchWorks as your guide.
