In recent years, Colombia has become a magnet for global tech companies looking for reliable and efficient software outsourcing solutions. Colombia’s IT industry consists of 11,101 companies, which account for 15% of the country’s services exports and generate sales valued at $29 billion. Among them are well-known technology giants such as Amazon, Microsoft, Oracle, IBM, Google, Cisco, etc. 

The combination of skilled professionals, competitive prices, and a strategic geographic location makes this country attractive for businesses. That’s why companies often seek trustworthy and reliable providers to help them conquer new tech markets, and Alcor stands out as a prime example. As a full-cycle R&D service provider, it assists Western tech product companies in expanding from 0 to 100 Valley Caliber-level developers across EE and LATAM, offering up to 40% savings compared to traditional outsourcing. Instead of standard nearshoring to Colombia, this company offers a more effective and comprehensive solution— but more on that later. 

In this article, we will explain why many companies choose to work with software developers in Colombia. We will also dive into the Colombian tech outsourcing industry to understand what makes this country attractive in this segment.

Outsourcing Market in Colombia

Colombia is rapidly gaining momentum in the global IT outsourcing arena, offering many benefits for businesses.

Let’s look at the five main benefits of outsourcing in Colombia.

Skilled Developers

Colombia’s software development industry is rich in skilled developers. With a population of 51 million, the country has over 150,000 IT talent, including 62,000 engineers and technicians.

Colombia graduates about 13,000 people annually with degrees in IT and engineering, the highest rate in all of Latin America.

Skilled engineers in this country have several essential qualities that make them attractive for outsourcing in Colombia:

  • Higher education. The country has over 30 universities and technology centers focusing on engineering, digital technologies, and customer service (University of the Andes, National University of Colombia). What is more, Colombia employs more than 65,000 software developers, two-thirds with degrees in computer science or a related field. Local specialists’ high level of education is the basis for developing an outsourcing strategy in Colombia.⁢ The prestigious QS World University ranking experts highly rated 25 higher education institutions in Colombia. Nine of them made it into the list of the best world universities in Latin America.
  • Experience with the latest technologies. Developers are constantly improving their skills in software in Colombia. They work with modern programming languages (Java, C++, Python, SQL, Ruby) ​​and frameworks and use leading technological solutions and innovations.
  • Language skills. Most Colombian specialists are fluent in English, which simplifies communication and collaboration. According to the EF English Proficiency Index, Colombia ranks 17th out of 20 Latin American countries. The most significant number of English-speaking Colombians live in Bogotá, Antioquia, Caldas, and Quindío.

Employers note the hard work, high productivity, and responsibility of Colombian IT specialists. They work efficiently and constantly look for ways to optimize processes and modernize projects. Each of them takes outsourcing in Colombia to an entirely new level.

Comfortable time zones

The similarity in time zones with many American cities contributes to developing the outsourcing strategy in Colombia. The GMT-5 time zone applies throughout the year in Columbia and to the following U.S. states: Maine, New Hampshire, Vermont, New York, Massachusetts, Rhode Island, Connecticut, New Jersey, Delaware, Maryland, Pennsylvania, Ohio, and Michigan. Most of Indiana, Kentucky, eastern Virginia, Tennessee, Georgia, North Carolina, and South Carolina are also in the GMT-5 zone. 

Let’s consider the main advantages of nearshoring software development to Colombia in the context of the time zone:

  • Synchronization of working hours with clients from the USA and Canada. Thus, you can minimize communication delays and speed up the process of developing technology in Colombia.
  • The ability to hold joint online meetings conveniently, without the need to work at night.
  • Possibility of organizing personal meetings to discuss key points of the project.⁤

All this allows teams to collaborate seamlessly, maximize productivity, and develop nearshore software development.

Cost of services: savings without losing quality

The main key advantage of developing an outsourcing strategy in Colombia is reducing costs without sacrificing quality. Colombia’s competitive cost of services combined with high-quality project execution makes it attractive to businesses. Savings are achieved due to the low cost of living and the optimized business model of local IT companies.

Here are some specific examples of how you can save by choosing Colombia to outsourcing:

  • Competitive rates. The average cost of software development outsourcing in Colombia is significantly lower than in the USA or Western Europe. At the same time, the quality of work remains high. For example, the salary of a junior full-cycle software developer in Colombia is $22,000, according to the data by Alcor’s tech headhunters. At the same time, their colleagues in the U.S. receive $90,000. The situation is similar in other segments of the industry. Top mobile app developers in Colombia receive $39,000; in the U.S., they receive $140,000. However, the most impressive difference is the salary of junior data scientists. In Colombia, they earn $21,000; in the U.S., they earn $110,000. The average tech talent in Colombia is 3-4 times less than that of their American colleagues.
  • Convenience of employment. Many Colombian companies offer flexible cooperation models. Thus, you can optimize costs depending on the needs of a specific project.
  • Low overhead costs. You can save on office rent, equipment, and utilities by ordering outsourcing in Colombia.

Colombia to outsourcing allows you to reduce costs and gain access to talented specialists ready to implement the most daring projects.

Government support in the IT sector

Local authorities actively support the outsourcing strategy in Colombia. The government is developing IT communities in every possible way and investing in education action. The Colombian government adopted the ICT Sector Modernization Act to protect the rights and interests of potential investors, expand the national I.T. industry, and introduce innovation. The law allows Colombian and foreign companies to develop innovative projects related to ICT services, improve access to these services, and ensure progress and modernization. This approach has created more than 3,950 research groups and innovative startups (1327), providing a favorable environment for software development outsourcing in Colombia. The most prominent startups are located in Bogota (190), Medellin (56), and Cali (44). International tech companies like Microsoft, Google, IBM, Accenture and Oracle have also chosen Colombia to recruit software developers.

Government initiatives, such as incentives for IT companies and export support programs, make Colombia attractive to foreign investors. New companies can be exempt from paying income tax for the first two years after registration. Companies exporting software are exempt from paying VAT on sales. In addition, the Colombian government is actively expanding financial support for IT companies through programs such as Fondo Nacional de Garantías, Colombia Productiva, Innpulsa Colombia, and others. Private initiatives such as Wayra Colombia also invest in IT-related startups, providing funding, mentoring, consulting, and access to valuable resources.

All this strengthens the position of Colombia to outsourcing, and makes it one of the most attractive regions for software development at the international level.

Cultural similarity and ease of doing business

One of the critical advantages of cooperation with Colombia to outsourcing is the proximity of cultural values. Many standard features, such as family values, respect for traditions, and high hospitality, unite the Latin American continent, the United States, and Europe. This facilitates communication and understanding between teams and simplifies the business process.

Here are some critical factors in the popularity of nearshore technology in Colombia:

  • Simplified company registration procedure. Registering a business in Colombia takes 7 days (the average in Latin America is 30 days).
  • Loyal tax policy for foreign investors. The tax rate for IT companies in Colombia is 27% (the average in Latin America is 34%).
  • Stable economic situation. A high Index of Economic Freedom (63.1) indicates freedom of business, labor, investment, and trade.

These factors create a favorable environment for developing an outsourcing strategy in Colombia. They allow you to focus on core tasks and minimize bureaucratic procedures.

Closer Look at Software Development Outsourcing in Colombia

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Nearshoring to Colombia is undoubtedly one of the most promising areas in business. With its help, you delegate work tasks to a third party, save money, increase productivity, and improve the quality of customer service.

The outsourcing market in Colombia covers a wide range of services. Let’s consider the main tasks that you can delegate to Colombia to outsourcing:

  • IT and software development. The number of technology startups and IT companies in Colombia grows yearly. In 2023, the Colombian Chamber of Commerce registered 1,720 startups, 30% more than the previous year. They all provide various services, from software development to cybersecurity. 
  • Business process outsourcing. This sector is one of the largest and most developed in Colombia. It includes services such as customer support, finance and accounting, and data entry. The world’s largest companies have chosen nearshoring Colombia for its skilled workforce and cost efficiency.
  • Marketing. This area is actively developing within the outsourcing strategy in Colombia. This vector includes the following activities: content creation, search engine optimization, social media management, email marketing, graphic design, video production, market research, public relations, etc. Currently, more than 87,000 companies in Colombia outsource media content creation, which is 5.8% of all operating companies in the country.

In addition, Colombia offers HR services, virtual marketers, executive assistants, project managers, and other tasks that can be outsourced. Global experts expect the software industry in Colombia to reach a record $1,952.15 million in revenue by 2028, meaning the list of promising areas will continue to grow.

Tips for Outsourcing to Colombia

If you want to make your outsourcing experience to Colombia as successful as possible, follow these tips:

  1. Research the specific location. Understanding the laws, cultural differences, and language barriers will help you prepare for potential challenges.
  2. Determine your budget. The size of your project, its functionality, and the number of developers in the team will depend on the available funds. Outsourcing costs include labor, time and materials, taxes, and infrastructure. Knowing all the costs in advance will help you manage your resources effectively.
  3. Determine your needs and choose the right partner. Consider whether you need part-time or full-time help. Find a partner in a specific industry. Make sure they have experience with the type of software you need. This way, you can maximize the benefits of outsourcing and achieve success.
  4. Set clear goals, including deadlines, deliverables, and key performance indicators. Ensure your outsourcing partner understands these goals and has the resources to meet them.
  5. Pay special attention to security. Ensure your outsourcing specialist has the security protocols to protect you from your confidential information.
  6. Ensure your outsourced specialist has the knowledge and tools to complete the job successfully. This may include providing access to software, tools, training materials, videos, sharing best practices, etc.
  7. Maintain a positive working relationship. Respond to questions or concerns. This will ensure that the outsourced specialist does a quality job. Encourage open communication and feedback.

By outsourcing business tasks to Colombia, companies can open up new opportunities for growth and success in today’s highly competitive global market.

Better Than Outsourcing Software Development to Colombia

Do you want to take advantage of all the benefits of the Columbia tech market and definitely stay in the black? Here’s a key insight: choose a comprehensive provider that meets all your needs. Alcor stands out with its software R&D center solution, offering full-cycle tech recruitment, Employer of Record services, and operational support to ensure seamless growth for your business in the Colombian tech landscape. By partnering with Alcor, you avoid hidden costs and buy-out fees, benefiting from complete transparency with a pay-as-you-go model. With 98.6% of developers passing probation and an average tenure of 2.5 years, as well as 24/7 support from a dedicated account manager, Alcor provides the reliability and efficiency you need.

Conclusion

The combination of qualified specialists, competitive prices, proximity to the United States, and cultural similarities make Colombia an attractive destination for your IT projects. Colombia continues to strengthen its position on the global stage as a reliable and innovative partner in software outsourcing.

Colombia can offer you this if you consider expanding your business and looking for effective ways to develop your software solutions. Don’t miss your chance to take advantage of these benefits and give your business a new boost. This is a great way to increase your capital and strengthen your position in the market. Colombia offers affordable software development rates, allowing you to cut costs without sacrificing quality.