Outsourcing development nearshore allows you to optimize development costs and access a larger talent pool while ensuring close collaboration with developers. If you’ve already decided to hire nearshore developers, the question now is: Where should you nearshore IT development? Should you opt for nearshore software development in Colombia – or look elsewhere?
As a software development company with an office in Medellín, we at Sombra know everything about software development in Colombia. So, if you seek to outsource software developers in Latin America, here’s everything you should know about nearshore software development in Colombia.
Nearshore software development in Colombia: Brief overview
Colombia is quickly becoming a hotspot for nearshore and offshore outsourcing in South America, especially among companies in North American countries. Here are a few facts about Colombia’s tech market:
- There are 380+ outsourcing companies in Colombia and its tech pool counts 150,000+ professionals, as of writing.
- According to Biz Latin Hub, investment in nearshore technology in Colombia surpassed $1 billion in 2022.
- Colombia ranks 11th in Kerney’s 2023 Global Services Location Index for its large tech talent pool and the government’s investment in the IT industry.
- Colombia also ranks 57th in the World Talent Ranking (4th in Latin America) and 66th in the 2023 Global Innovation Index (5th in the region).
- 23.1% of tertiary graduates majored in science and technology in 2020. While in the Colombia vs Mexico comparison, Mexico has a slightly larger share of tech graduates, Colombia still outpaces Brazil, Argentina, and Costa Rica.
Major IT hubs in Colombia
What is nearshore outsourcing? Nearshore software outsourcing means hiring a development company in a location within three time zones from you. If based in the United States, you can find nearshore developers in Colombia, for example.
Key destinations for nearshore software development in Colombia include Medellin, Bogotá, Cali, Barranquilla, and Cartagena.
Medellín
Medellín is a nearshore center and the second-largest city in the country, located in its central region. Medellín is home to 100+ nearshoring companies, with Sombra being one of them. The city climbed an impressive 37 spots in the 2023 Global Startup Ecosystem Index and ninth in the Latin American region.
Medellín is one of the few cities with a comprehensive innovation strategy for growing a robust tech ecosystem. The strategy is focused on smart city technologies and urban planning, automation, VR and AR, sustainability, gaming, and edtech.
Sombra’s office in Medellin, Colombia
Bogotá
Bogotá is the country’s capital and the main hub for nearshore software development in Colombia. With 200+ tech companies offering nearshore outsourcing services in Bogotá, it’s a destination for AI and ML, eCommerce, health tech, and fintech projects.
Bogotá also benefits from the government’s tax incentives and funding opportunities for nearshore application development service vendors. It’s ranked 65th in the 2023 Global Startup Ecosystem Index, third in South America after São Paulo (Brazil) and Mexico City (Mexico).
Cali
Cali is the most populous city in southwest Colombia. This nearshore development center focuses on telecoms, transportation, logistics, and agricultural technology. With 40+ service vendors in Cali, the city is an emerging hub for nearshore software development in Colombia.
7 benefits of nearshore software development in Colombia
Alternatives to nearshore software development outsourcing include onshore and offshore software development:
- Onshore development means hiring software development teams in the same country.
- Offshore development means hiring offshore developers in another country with more than three hours of time zone difference.
Let’s break down the pros and cons of hiring nearshore software development companies in Colombia.
Cultural alignment
Colombia has been a long-standing economic partner for the United States, especially since 2012’s U.S.-Colombia Trade Promotion Agreement. The trade between the two countries exceeded $39.3 billion in 2022.
Thanks to this long history of cross-border cooperation, Colombia-based companies know how to manage potential cultural differences with US companies. They can meet expectations regarding communication, quality standards, business requirements, and intellectual property protection.
This makes Colombia a better choice in both Mexico vs Colombia and Colombia vs Brazil for nearshore technology outsourcing comparisons.
Convenient time zone
Colombia is in the UTC-5 time zone, meaning a Colombian nearshore outsourcing company will have little to no time difference with North American clients. For example, if you work with Sombra’s office in Medellín, the time zone difference will be:
- 0 hours for EST locations (New York City, Boston)
- 1 hour for CST locations (Chicago, New Orleans)
- 2 hours for MST locations (Santa Fe, Denver)
- 3 hours for PST locations (Los Angeles, Las Vegas)
Nearshore software development in Colombia allows for efficient real-time communication, streamlining processes requiring close collaboration or prior authorization.
Reduced software development costs
Lower development rates make Colombia a cost-effective destination for developing software applications. Most of it is due to a lower cost of living (69.2% lower than in the United States).
By opting for nearshore software development outsourcing, companies can save between 40% and 70% in development costs, mostly thanks to lower hourly rates for hiring top talent. Here’s a comparison table for hourly rates in Latin America, North America, Central & Eastern Europe:
Hourly rates in Latin America vs North America vs Central & Eastern Europe
English proficiency
Among 111 countries, Colombia ranks 77th in the 2022 EF English Proficiency Index. Bogotá scored the highest among Colombian cities.
The Colombian government actively seeks to improve English proficiency in the country with its $1.3 billion Colombia Very Well program. Its goal is to enable high school students to graduate with an intermediate level of English.
The prevalence of English in Colombia’s corporate world facilitates nearshore software development in Colombia, mitigating the risk of miscommunication.
Large talent pool
Colombia’s tech talent sector counts over 150,000 software engineers, including front-end, back-end, and full-stack developers. Colombian universities add around 13,000 ICT graduates to the talent pool every year.
Focusing your outsourcing strategy on Colombia can enable quicker and easier hiring of top talent, while optimizing development costs.
Sombra’s development center in Medellin, Colombia
Geographical proximity
Colombia is easily accessible for US-based companies that want to send their personnel to visit nearshore teams in person.
Seven airlines serve direct U.S.-Colombia flights that can transport over 51,000 travelers weekly in under five hours. Furthermore, U.S. residents don’t need a visa to enter Colombia for short business trips.
Industry expertise
Colombia’s tech industry boasts a diverse pool of skilled software developers proficient in various programming languages and technologies.
The most popular programming languages in Colombia include C#, C++, front-end technologies, DevOps, Java, .NET, and Python. Nearshore agile software development is also a common service.
You can also easily find companies specializing in specific nearshore technology solutions when you opt for nearshore software development in Colombia. This includes machine learning, eCommerce, and fintech app development.
For the past eight years, Sombra has been providing fintech expertise. We have successfully delivered over 30 projects for a global top 15 bank.
Financial services represent 29,13% of all the industries Sombra serves
Need an agile nearshoring partner that exceeds your expectations? Contact us to discuss how our Medellín office can help you expand your in-house team or deliver a project with a managed or project-based team.
3 challenges of nearshore software development in Colombia
Of course, nearshore outsourcing isn’t without its challenges. Here are the top three among them, along with how you can overcome them.
Lack of trust
It takes time to build trust with external development companies. In our experience, managed team and project-based models require two to four weeks for clients to start trusting a nearshore outsourcing service company. Under the nearshore staff augmentation model, building trust typically takes up to two weeks.
Sombra’s solution. Verify that your nearshore technology company has solid project management capabilities in-house. This means proactive communication, regular updates, and full transparency. The company should also be well-versed in agile nearshore development.
Communication gaps
Miscommunication during nearshore software development in Colombia can lead to costly process inefficiencies and subpar product results. Such communication gaps can happen when development teams aren’t properly briefed on the target audience or don’t show the initiative to improve the product as the client expects.
Sombra’s solutions:
- During product development outsourcing at Sombra, we encourage our clients to discuss communication gaps with the project manager, delivery manager, or Chief Delivery Officer, Oleh Kozak.
- As a nearshore software company, we meet with our clients monthly to ensure our nearshoring services meet their expectations. Following the meeting, we fine-tune our nearshore outsourcing software development services to better match the client’s needs, wishes, and challenges.
Client’s review of Sombra communication
Security challenges
Both offshore development and nearshore software development in Colombia come with security risks like data leaks, code vulnerabilities, and code leakage. This can lead to security breaches and financial and reputational losses.
Sombra’s solutions:
- Opt for nearshore software services provided by IT nearshoring companies with a SOC2 or ISO27001 certification.
- Sign an NDA before hiring software developers.
- Provide role-based permissions for the software development team when outsourcing nearshore.
How to hire software developers in Colombia
A nearshore team is a team of outsourcing software developers geographically close to the client’s location. Hiring a nearshore development company allows businesses to optimize costs while fostering real-time collaboration with the in-house team and keeping a close eye on the project.
Here are the five steps toward reaping the benefits of nearshore software development in Colombia to the fullest.
Create a vision of your software product
Before you even start looking for a nearshore software development service provider, zero in on what your project will entail. Conduct the discovery phase to:
- Identify the product type (web or mobile app, etc.).
- Do the research on the market, competitors, and target audience.
- Pinpoint the tech stack and business and functional requirements.
- Define nearshore software development outsourcing project goals and scope of work.
Choose your product/project manager
Whether it’s nearshore mobile app development or nearshore outsourcing web development, having a product or project manager on your side to oversee collaboration with the nearshore service provider is essential. This person will communicate with their counterpart in the nearshore company, as well as with nearshore developers directly.
To oversee your development project, your project/product manager should be well-versed in the technical aspects of building your product. They also need to have a full grasp of your requirements and goals to ensure that provided nearshore development services align with them.
Select a nearshore software development company
Instead of browsing job boards to compile a nearshore team, it’s best to turn to nearshore companies. Such a company can provide you with a team (or even a single nearshore developer if you turn to a staff augmentation company).
To choose well among hundreds of nearshore software development companies, we advise you to go beyond browsing top software development company lists and check for:
- Alignment with your technical needs. Your top nearshore technology company should have experience with similar software development projects. Browse the company’s Expertise page and talk to the chief technology officer to discuss developers’ experience with your tech stack.
- Direct communication with individual team members. Without it, outsourcing software development will simply take longer. You’ll have to wait until the company’s project manager relays your request or feedback to developers.
- Proactive development team composition. The outsourcing company should be proactive in suggesting team members. The best nearshore technology company will also be able to back up its choices with examples and figures.
Client’s review of Sombra performance
Prepare access for the nearshore software development company
Before kicking off development outsourcing, ensure the team can work on it – i.e., that it has all the documentation and permissions they require. Contact the Colombia software development services company beforehand and ask the competence lead what access team members will need.
Discuss post-launch support options
Software outsourcing doesn’t mean you won’t ever need development services. Someone has to maintain and update your product, be it a web development company in Colombia or an agile software development nearshore partner elsewhere.
Discuss with your nearshoring company beforehand whether it’s ready to move into a supporting role after the launch as a nearshoring IT partner. Such nearshore IT outsourcing will put your product in the hands of people already well-versed in it and help you optimize the product’s average annual cost.
Need an agile nearshore partner to promptly close your in-house talent gap? Contact us to kick off your nearshore development outsourcing project in perfect alignment with your needs.
Nearshore development in Colombia vs other Latin American countries
Determined to hire a software development team in Latin America but don’t know which destination would be the best country for nearshore technology outsourcing? Let’s break down how Columbia’s nearshore development compares against its competitors.
Colombia vs Argentina for nearshore technology outsourcing
Argentina is an outsourcing software development destination with over 115,000 software developers and 420+ nearshore outsourcing companies.
When comparing Colombia vs Argentina for nearshore technology outsourcing, Argentina ranks lower in both the 2023 Global Services Location Index and the 2023 Global Innovation Index. Colombia can also boast a higher ranking in the Ease of Doing Business Index.
Argentina is located in the UTC-3 time zone, resulting in a significant time difference from the United States. If time zone overlap is crucial for you when comparing Colombia vs Argentina for nearshore technology outsourcing, Colombia is a better choice.
As for software development rates, Argentina prevails over Colombia in the Colombia vs Argentina for nearshore technology outsourcing comparison. We crunched the numbers available on Clutch, and a larger share of Argentinian companies offer their services at $25-49 per hour.
Colombia vs Peru for nearshore technology outsourcing
Peru is a Latin American country with a nearshore software engineering market counting 45,000+ developers and 75 firms on Clutch. So, opting for Colombia in Colombia vs Peru for nearshore technology outsourcing allows you to choose from a larger talent pool.
Plus, nearshoring to Colombia is also a more affordable option for nearshore outsourcing in Latin America in Colombia vs Peru for nearshore technology outsourcing comparison.
Peru scores higher on the EF English Proficiency Index. However, it’s a less attractive destination for software outsourcing in South America overall. That’s reflected in Peru’s lower rankings in the 2023 Global Services Location Index, 2023 Global Innovation Index, and Ease of Doing Business Index.
The time zone difference is the same in Colombia vs Peru for nearshore technology outsourcing. Both countries are located in the UTC-5 time zone.
Colombia vs Brazil for nearshore technology outsourcing
Brazil has the largest number of developers in South America: 750,000 thousand. However, comparing Colombia vs Brazil for nearshore technology outsourcing, there are fewer development companies than in Colombia (280+ listed on Clutch).
While Brazil promotes free-trade zones and other investment incentives, the country still ranks low in the Ease of Doing Business Index: it’s 124th. Comparing Colombia vs Brazil for nearshore technology outsourcing, Colombia ranks 67th in the same index.
However, Brazil ranks higher in the 2023 Global Services Location Index and the 2023 Global Innovation Index.
Outsourcing to Colombia means a tighter overlap in time zones as most of Brazil is located in UTC-4 and UTC-3 time zones.
As for development rates, hiring nearshore software development teams is slightly more affordable in Colombia. More Colombian software nearshoring companies offer services at the rate between $25-$49 (48.33%, compared to 40.62% in Brazil).
Colombia vs Costa Rica for nearshore technology outsourcing
Costa Rica is a Central American country with 47,000+ application development specialists.
When comparing Costa Rica vs Colombia, outsourcing development to Colombia means gaining access to a larger number of nearshoring software development companies. Costa Rica’s software development market counts 140+ service vendors.
Colombia prevails over Costa Rica in the 2023 Global Innovation Index and the 2023 Global Services Location Index. However, Costa Rica has the upper hand in the EF English Proficiency Index.
Costa Rica is located in the UTC-6/CST time zone, which is a similar time zone to the United States.
As for the nearshore software developer rates, their distribution is almost even across the $25-49 and $50-99 categories in Costa Rica (41.18% and 47.06%, respectively). This makes Colombia’s hourly rates for nearshore IT services slightly more affordable.
Colombia vs Uruguay for nearshore technology outsourcing
Uruguay is a country in South America with 17,000+ developers and 210+ software development nearshoring firms. Software developer hourly rates most often fall into the $50-99 per hour category (53.69%).
While Uruguay ranks higher than Brazil and Argentina in the Ease of Doing Business Index, it’s still lower than Colombia. It also ranks lower in the 2023 Global Services Location Index. At the same time, Uruguay ranks one spot higher in the regional 2023 Global Innovation Index.
Located in the UTC-3 time zone, Uruguay comes with a larger time zone difference than Colombia (3-6 hours with the United States).
Ready to reap the benefits of nearshoring your development operations? Contact us to discuss how Sombra’s expertise can drive your business growth.
