What is software development in Argentina like?
SourceSeek has been collaborating with software development teams in Argentina for a few years now. But I still struggle to answer simple questions from clients like, ‘What is software development in Argentina like?”
For most countries, it’s easy to describe their IT sector in very general terms, but the outsourcing to Argentina is a mixed-bag and defies simple characterization – it’s consistently inconsistent.
Our clients rave about outsourcing to Argentina
Let me first say: our clients rave about the Argentinian teams we’ve introduced them to. We also have increasing demand for software development companies in Argentina. So, this October I’ll be spending a few weeks in Argentina learning the business culture and immersing myself into the software outsourcing landscape.
Buenos Aires is the top requested region so I’ll be based there, but I’ll also be visiting Cordoba, Mendoza and possibly some other cities in the area.
According to our database of offshore software teams, I will be seeing a huge range of hourly rates, even among very similar companies. Our partners provide different explanations, but usually they attribute this to the instability of the economy in Argentina. Instability causes undue fluctuation of currency, constantly shifting pricing, and subsequent inconsistency in general business practices.
We see some companies that can easily compete on price with E. Europe and other companies with rates very close to domestic US rates
We also see rates being affected by market pressure from nearby Brazil as well as domestic consumption of IT services. Argentinian companies have to deal with inflation, a high tax burden, and complex employment laws that bring serious overhead to developer salaries. As a result, we see some companies that can easily compete on price with E. Europe and other companies with rates very close to domestic US rates.
When it comes to process and quality, we see a similar ‘no theme’ theme: Argentinian companies are all over the map. Some teams have seasoned, battle-hardened managers with a deep understanding of software delivery. Others have an abundance of junior developers, but a critical lack of management. Neither of those things are unusual, but often, they correlate with a nationwide lack of seasoned managers, such as in India. Not so in Argentina, where there appear to be plenty of great managers, depending on where we look.
Assessing Argentina’s higher educational system has also proven to be a bit tricky. There are excellent universities in Argentina, which are critical for feeding the IT sector with fresh, new graduates. And yet many locals report that most of the schools are mediocre and produce graduates who need considerable on-the-job training to reach a professional level.
So, what is really going on with Argentina’s software sector? Will they emerge as a powerhouse player on the global IT scene? It’s not clear at this point, but it will be this fall. I’ll be meeting with many companies and industry leaders as possible and mapping out the landscape so that we can provide clients with the best insights and guidance as they choose an outsourcing destination.
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