Latin American software and information technology (IT) are gaining worldwide attention. In this regard, Colombia and Mexico are the definite stand-outs.
The region’s software industry rakes billions in revenue, with industry observers predicting the IT market to grow continuously in the coming years. To facilitate rapid digital transformation, U.S.-based companies may find nearshore technology outsourcing in Colombia and Mexico as a feasible business strategy.
Learn more about LatAm nearshoring in this infographic.
Nearshore Technology Outsourcing in Latin America: Will It Be Colombia or Mexico?
Colombia and Mexico are at the forefront of the software and IT ecosystem. Each country proves its reliability in supporting a company’s nearshoring needs. But choosing the right nearshore outsourcing partner requires an in-depth understanding of how each country nurtures and develops these industries.
Government’s Support to BPO
The government agencies in Colombia consistently provide support to BPOs. For that reason, several international businesses express high confidence in Colombia’s business trajectory, surpassing Mexico.
In Mexico, however, Andrés Manuel López Obrador (AMLO), a populist president, struck out at the country’s investment promotion agency. Years later, this verdict failed to boost the BPO industry further.
English Language Proficiency
Software and IT customer tickets can be complicated and require expertise. But when nearshore companies can understand their customers and communicate the solutions, it can improve your firm’s productivity and customer satisfaction (CSAT) rate.
The English Proficiency Index 2022 shows that Latin Americans have made tremendous progress in learning and acquiring the language. Also, the region’s improvement rate is among the fastest in the world.
The study shows that Colombia scores higher in English proficiency than Mexico. With fewer language barriers, Colombian outsourcing companies may resolve your customer concerns quicker than Mexican ones.
Cost of Living
In a 2022 survey, 22% of tech companies in the U.S. agree that one of their top internal challenges is a lack of budget. Similarly, most of them consider nearshore software outsourcing because it is cost-efficient.
Because of that, U.S.-based firms may benefit from outsourcing in Colombia because of its lower cost of living compared to Mexico. Here are some of the comparisons:
- Rentals in Mexico cost 79.9% higher than in Colombia.
- The cost of groceries in Mexico is 61.2% higher than in Colombia.
Access to Tech Labor Market
It’s no denying that Colombia and Mexico are known for their highly qualified talent pipeline in the tech hub. However, the recent Mexican labor and tax laws amendments have gravely affected the outsourcing of workers. Companies that outsource local specialists must also be registered with the Mexican labor authorities.
On the other hand, U.S. companies that outsource in Colombia may even receive tax incentives and exemptions from the latter’s government agencies. This is to rehabilitate Colombia’s economy and avail more job opportunities for the locals.
With that said, Colombia not only allows but also encourages the outsourcing of foreign businesses by offering benefits. Thus, hiring software and IT specialists in Colombia rather than in Mexico may be more straightforward.
Mexico wins over Colombia by geographical proximity as it is located by the U.S. border.
Even so, the facilities for international travelers, such as hotels, restaurants, and airport amenities in Colombia, are significantly favored, according to a survey. On the other hand, the airport facilities in Mexico are reportedly outdated for frequent business travelers. Considering comfort in this regard, Colombia prevails.
Why Choose Colombia for Nearshore Technology Outsourcing
Comparing Colombia and Mexico when it comes to nearshore software development services is a tall order. But, at the end of the day, Colombia gains the upper hand.
The country is a powerhouse in tech for various reasons. At the same time, Colombia has shown its competitive edge in several areas, such as cost-effectiveness, language proficiency, and an excellent talent pool. It’s wise to outsource from Colombia’s outsourcing firms to generate better profitability and entrepreneurial growth.
Contact us today to leverage Colombia’s competitive IT and tech solution packages!