Nearshore Outsourcing in Argentina.
Frequently Asked Questions (FAQs)
A. Nearshore Outsourcing: Business Drivers
Q:
Why should I consider outsourcing my technology projects?
A:
It is a proven fact: business can repeatedly realize sustained cost reductions by outsourcing processes that are
resource intensive and costly, regardless of the size of the organization or scope of the outsourced initiative.
By outsourcing projects or business processes that are intensive in terms of staff resources, and/or require
specialized skill sets that not readily available within the organization, companies can continue to focus on their
core business competencies and optimize utilization of their internal resources.
Q:
What are the key business benefits of outsourcing?
A:
Companies that leverage outsourcing primarily benefit by:
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Lowering operational and labor costs; these are primary drivers for outsourcing.
Freeing up capital by reducing investments in technology, infrastructure and people; these make up the bulk
of capital expenditure.
Realizing operational cost savings which in turn allows companies to repurpose capital funds toward profit
generating activities and exploring new market opportunities.
Focusing on Core Business Functions, once non-core activities like administration and back-office are
outsourced.
Achieving resource flexibility and capacity management which allows companies to adjust quickly to market
dynamics.
Controlling organizational functions that become operationally uncontrollable and/or unsustainable.
Gaining access to an international knowledge base which can enrich the organization’s intellectual property.
Q:
Is nearshoring more advantageous than offshoring?
A:
Similarly to offshore outsourcing, nearshoring offers access to large numbers of qualified workers that can
efficiently handle straightforward business processes and software development tasks.
Offshoring is a fit when used for systems and tasks with relatively low levels of business impact and customer
interactions. If your company is building an application at a fixed cost, penalty-protected manner, where it is
developed is not critical as long as the product is built with a standard of quality and delivered within the desired
time frame. Offshoring is best utilized when the absolute lowest cost is a decisive factor.
However, the offshoring model does not fit most outsourcing initiatives, particularly when outsourcing a project
that requires a high degree of collaboration, product management, joint development, and constant
communication. This is where a nearshoring model can have distinct advantages over offshoring, based on the
following factors:
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Similar time zones, which leads to closer collaboration, better working relationships and improved output.
Agile-oriented development centers.
Lower turnover.
Cultural affinity, which translates to higher value consulting.
Fraud prevention, patent and copyright protection.
Innovation and intuition.
English language proficiency.
Ease of management.
Faster time to market.
Reduced Total Cost of Ownership (TCO).
Q:
Is nearshore outsourcing more suitable for the Agile Methodology than offshoring?
A:
The Agile development methodology requires the team of developers to be in constant communication with
each other. In a traditional offshore model, the development team will need to work night shifts to
accommodate their US counterparts. This results in high turnover rates in the offshore team. As a result, most
offshore agencies are no longer requiring their best consultants to work the night shift and this has an impact in
the quality of consultants available during US business hours.
The biggest advantage to nearshoring is the ability to leverage an Agile methodology with the top nearshore
talent available. Developers in the US, as well as nearshore, can participate in daily sessions and work during
normal business hours, which leads to tighter relationships and increased learning and knowledge exchange.
In addition, temporary work visas for nearshore consultants take weeks to process, rather than months or years.
Also, being in a similar time zone not only eliminates lag in response time, but makes travel easier and less
expensive, which can allow internal staff and nearshore resources to interact or meet in person more
frequently.
All of the above contribute to a high probability of project success for nearshore projects.
Q:
Why did AAJ select Argentina as the location of the company’s nearshore operations?
A:
After thoroughly researching nearshore outsourcing options in the Caribbean, Central and South America, AAJ
selected Argentina as the center of our nearshore operations due to several compelling reasons. In addition to
meeting standard criteria, such as a large pool of skilled IT resources, a robust educational system, modern
technology infrastructure, as well as high degrees of commitment and a focus on quality assurance, Argentina
stands out because it offers the following:
1. A strong tradition of research, innovation, and intuition.
Design, creativity, and research lead to innovation. These are three things that Argentina has in volume. In fact,
innovation is cited as one of the key reasons companies select to nearshore operations to Argentina. In
Argentina, research and thought leadership are engrained into the technology fabric. The naturally artistic and
creative culture of Argentina is seen in their technology output. An anecdotal 30% of the design work in Silicon
Valley is being credited to Argentina. In addition, newer technologies, newer methodologies, and an abundance
of R&D labs are the norm in the country. Many companies prefer conducting R&D in Argentina over Eastern
Europe and Asia due to security concerns with the latter two options.
In our view, innovation without intuition is meaningless. Traditionally, offshore development relies on a precise
instruction set that must be followed to the tee. Offshore programmers simply code to the specification guide
and tend to avoid asking questions. This is prevalent in most Far East cultures. In Argentina, however, we have
seen the opposite in our development center. Our leads are coming up with ideas for frameworks, tools, and
other creative approaches that we can implement to deliver more value for our customers. They are also quick
to spot errors and inefficiencies in client projects, and promptly work to correct them. This “can do” attitude of
our Argentinian consultants translates to a real advantage for our company and our clients.
2. Cultural Affinity.
As customer centric processes become increasingly popular and many customer-facing services are outsourced,
the impact of outsourcing is becoming an intrinsic part of a company’s overall success. The high cultural affinity
between the US and Argentina means that our nearshore consultants can master the cultural nuisances that
help improve communication, enhance collaboration, and increase productivity. Building mission critical apps
requires a high degree of communication between internal and outsourced resources. Doing so in Argentina
carries less risk than Asia because the quality of communication is higher due to the inherent cultural affinity.
Another advantage of having a high degree of cultural affinity is understanding regulations and the business
norms in standard operating procedures. The higher degree of regulation, the higher degree of affinity required.
If outsourcing more than a single process, it quickly becomes evident why most offshore companies cannot
provide a wide range of vertical expertise. Nearshore resources in Argentina can circumvent this issue and
develop higher and more varied levels of vertical expertise due to their natural understanding of US regulations
and business norms.
Finally, the fair labor laws and high quality of life in Argentina are elements that are directly tied to AAJ’s core
corporate values, which pointed to Argentina as the natural choice for our nearshore operations.
3. English Language Skills
In most foreign operations, the level of English language proficiency varies. As more companies are adopting the
Agile methodology, the communication skills of everyone involved in the outsourced project becomes a critical
factor as communication across all teams and levels is paramount. Argentina boasts the highest level of English
proficiency than any other country in Latin America. Many schools in Argentina teach English as a second
language very early on, starting in the first grades of elementary school. The overall level of English proficiency
in our team of consultants and developers in Argentina is exceptionally high.
4. Fraud prevention, patent and copyright protection.
Offshore has a reputation when it comes to patent and copyright infringement. Not much can be done when
intellectual property is stolen, even if the US judicial system tries to enforce international treaties and
agreements.
By contrast, Argentina has stricter enforcement of intellectual property rights. The Argentinian government is
more likely to work with the US government to enforce trade regulations, more than certain Far East or Latin
American countries (China or Venezuela for instance).
5. Ease of obtaining US work authorization.
One of the biggest advantages of nearshore resources in Argentina is the ability to obtain work visas quickly and
frequently rotate staff. Work visas can be processed in a few weeks, as opposed to months for offshore
resources. This increases our ability to provide on-demand resources quickly for our customers, which can help
contribute to a project’s overall success.
6. Lower Total Cost of Ownership for our client’s technology projects.
Rates in a traditional outsourcing engagement in Asia are typically 15% to 20% lower when compared to
Argentina, however, faster time to market cycles and increased output (typically 20% to 25%), both realized as a
result of leveraging the Agile methodology drastically reduce the cost of nearshore outsourcing. In addition,
better quality output realized through Agile can lead to higher client satisfaction and increased sales. Finally,
processes that have traditionally been performed by onshore consultants commanding high rates can be
transferred to nearshore, which reduces overall cost.
B. Nearshore Outsourcing to Argentina: The Facts
Q:
Does Argentina offer a highly skilled talent pool for my technology projects?
A:
The IT outsourcing industry in Argentina includes a highly skilled workforce of 85,000+. Over 500 IT companies
have presence in the country, which makes Argentina’s IT outsourcing industry the second largest in Latin
America, behind Brazil. Argentina is also second among Latin American countries with the most certified IT
professionals (Brazil having the highest).
The country has a fast growing technology sector and offers access to innovative research and development.
Most IT professionals in the country, and everyone who works at AAJ, have built up their experience and
knowledge working for some of the largest US corporations in Argentina.
Argentina has over 860+ higher education institutions (universities and colleges) and a robust educational
system. The country boasts the largest proportion of university graduates in Latin America. There are 17,000+ IT
graduates annually so the country offers access to a large pool of technology talent.
Here are a few more facts about Argentina:
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Second largest country by area, third largest by population in Latin America (42mm).
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Second highest GNP.
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Languages – Spanish and English.
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Literacy rate: 97.9%.
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Time zone: EST -2 (6 to 8 hour business day overlap with US).
Q:
What about the state of the infrastructure in Argentina?
A:
Argentina offers access to a modern technology infrastructure with state of the art telecommunications and
fiber optic networks. The highway system is also modern, which facilitates access to major technology hubs
around the country, such as Rosario, where AAJ’s Development Center is located.
Q:
What is the level of English fluency in Argentina?
A:
The level of English fluency in Argentina is exceptional. The country boasts the highest fluency rate among all
Latin America countries and among the highest worldwide. Please refer to the World English Proficiency map
below.
Figure: English Proficiency World Map
Q:
Is Argentina easily accessible for travel from the US?
A:
US and international airlines offer many direct flight options to major Argentinian cities.
Q:
Why did AAJ establish its Argentina development center in the city of Rosario?
A:
We selected Rosario as the location of the AAJ nearshore development center in Argentina because it offers
access to an existing IT talent pool, with many professionals that have been trained by major US corporations.
Rosario hosts 30% of Argentina’s Software and Information Systems industry.
Rosario is located in the center of the fiber optic ring in Argentina and as such, offers access to modern
connectivity and infrastructure systems.
In terms of cost efficiency, pay rates in Rosario are 15% lower than in Buenos Aires, so this translates to lower
overall outsourced project costs. Moreover, the IT industry in Rosario features a 90% retention rate, as young
professionals move back to the city to start families there. This contributes to attracting employees and
achieving low resource turnover.
Rosario is also home to major educational institutions, which means access to academic research and
innovation. Rosario is located within a few hours’ drive from the capital, Buenos Aires, and offers all the
advantages of a major urban center, but at a lower cost.
Here are some more facts about the city of Rosario:
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Located just 2.5 hours by car from Buenos Aires; convenient and easy to access: fluid arterial highway
system that connects to the four cardinal points of the city.
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3 universities, 8 academies and 40 research institutes.
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100,000+ students, 1,500+ IT graduates annually.
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1.5mm people, with unemployment rate ~8%.
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Museums, restaurants, and other cultural amenities. A cosmopolitan city that helps attract the best talent.
Here are some facts about the AAJ Development Center in Rosario:
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Secure “Class A” Facility built for high tech and engineering firms.
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High-bandwidth connectivity fiber-optic network with power generators and UPS grid.
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Local government support.
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Western management onsite.
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Situated in a cosmopolitan hub, near world class restaurants, museums, art exhibits.
C. Nearshore Outsourcing Models and Methodology
Q:
What is the engagement model and team structure of the AAJ team in Argentina?
A:
We offer a flexible outsourcing and project team model to suit your unique requirements:
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Our people, Your Team: HR managed locally, project managed by you, the Client.
Your Project, Our Team: HR and Project Managed locally by AAJ.
Your Product, Our Team: HR and Product Management performed by AAJ.
Talent Cloud: We can provide resources from our Talent Cloud. This enables flexibility with cross team
assignments, where we allocate resources to the current project team, as the need arises, in the following
areas: Mobility, Application Development, Portals & Collaboration, Quality Assurance, Business Intelligence,
and Integration.
Following is an example of how a project team could be structured. A team typically consists of five team
members. Of course, the unique requirements of your project and your specific business objectives will
ultimately dictate the resources and model of engagement.
Agile Project Team Structure
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Sr. Team Member (one resource) – 8+ years of experience.
Team Members (two resources) – 4-7 years of experience.
Jr. Team Member (one resource) – 1-3 years of experience.
QA Engineer or QC Tester (one resource) – 1-3 years of experience.
Q:
What is AAJ’s approach to recruiting high caliber consultants in Argentina?
A:
AAJ follows a structured recruitment methodology for identifying, attracting, and employing the best talent
available. In Rosario, our process includes the following:
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Relationships with local Universities for preferential access to Top Graduates.
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A structured program of internships and trainings: many of our long-term consultants complete their
internships with us and return for full time employment. We identify the best and brightest through this
process and retain top talent for your projects.
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University agreements to provide technical classes: experienced AAJ consultants teach classes at local
educational institutions and identify top recruits for our candidate screening process.
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Career Days: we host frequent open house events that provide face-to-face interaction between our
recruiters and candidates.
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Partner and referral Network: we have an extensive network of contacts and partners in Argentina who can
point to the right resources during our search.
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Recruiting via Social Networks: we are actively promoting the benefits of joining the AAJ team and attract
recruits via social networks, such as LinkedIn and Facebook.
Our Candidate Selection Process involves the following:
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Reviewing and categorizing resumes/CVs by skill and level.
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HR candidate screening: includes thorough employment and criminal background checks.
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Psycho-technical interview: including standardized aptitude testing.
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Technical Interview: we compline a technical profile on the candidate.
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Pre-occupational tests: ensures that candidates possess the proper skills and knowledge.
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Client-Candidate interviews, if required.
Q:
What methodologies and technologies does AAJ focus on?
A:
Following is a reference list of the technologies that our consultants in Argentina excel in:
Methodologies
Agile software development
Event-driven programming
Expression Language
Functional programming
Concurrent programming
Unit Testing
Object-oriented
Web Development
AJAX
ActionScript/Flex
Apache HTTP Server
Flash
AngularJS
Ext JS
CoffeeScript
JavaScript
HTTP REST
HTML
HTML5
jQuery
jQuery Mobile
JSON
MS IIS
Zurb Foundation
XML/XSLT
Twitter Bootstrap
XPath
Mobile/Smartphone
Android
Android Studio
BlackBerry OS
iOS
PhoneGap
RoboVM
Databases
DB2
HSQLDB
MySQL
MongoDB
MS SQL
PostgreSQL
Oracle DBMS
PL/SQL
Sybase
Cloud
Amazon Web Services
Google App Engine
Google Cloud Datastore
Google Cloud Messaging
Google Cloud Storage
Google Drive
Google Blobstore
Google API
Apple
Core Data
Cocoa
Objective-C
JSONKit
Mac OS
XCode
Microsoft Platform
ADO.NET
ASP.NET
ASP.NET MVC
C#
MFC
ODBC
Win Forms
Windows
Windows Azure
Windows Mobile
Silverlight
Java / Open Source
Google Web Toolkit
Apache HttpClient
Apache JMeter
Apache Lucene
Apache POI
Apache Shiro
Apache SOLR
Apache Tomcat
Apache Ant
Apache Axis
Apache Commons
Apache Cordova
Apache CXF
ElasticSearch
Eclipse
EasyMock
AWT
Apache Cocoon
Commons HttpClient
Java / Open Source
Google Charts
Google Gson
Google Guava
Gradle
Groovy
Guice
H2
Hibernate
IntelliJ IDEA
iText
Java 2D
Java Collections
Java EE
Java ME
Java RMI
Java Servlets
Javadoc
JavaMail
Java XML API (SAX/DOM)
Java / Open Source
JBoss
JBoss Netty
JBoss RestEasy
JAXB
Jackson
JasperReports
JDBC
JMS
JNDI
JPA
JSF
JGroups
Netbeans
Netflix RxJava
Maven
JSP
JUnit
OSGi
ORMLite
Others
CVS
Git
SVN
C
C++
Bash Shell
PowerBuilder
Memcache
Linux
Python
Redis
PHP
Ruby on Rails
Jenkins
JIRA
Redmine
Mantis
Java / Open Source
MyBatis
MGWT
LifeRay
Spring
Spring Data
Spring Integration
Spring MVC
Spymemcached
Swing
OpenJPA
Vaadin
Portlets
Quartz
Servlets
TestNG
Smart GWT
SWT
Retrofit
D. Nearshore Outsourcing Risks, Success Factors, and How to Get Started.
Q:
Why should I consider outsourcing my project with AAJ Technologies?
A:
Because of our breadth of resources and depth of technical expertise, AAJ is able to provide you with a
customized team of resources that includes carefully selected consultants based on your specific project
requirements. We want to emphasize the team aspect of our approach. We do not recruit an entire team as the
need arises. Your outsourced team consists of team members who are long-term AAJ consultants and have
previously worked together on complex projects. They have been carefully selected to work for AAJ because
they complement each other’s strengths, something that contributes to enhanced team output. Contrary to
many outsourcing agencies, our team members do not learn how to collaborate as part of your project. They are
able to hit the ground running on day one.
In addition, AAJ has been providing outsourced resources to Fortune 1000 organizations for nearly two decades.
We have built a world class delivery model over the years and have proven experience managing the intricacies
of complex outsourced initiatives. Our senior consultants have an average tenure of 10 years with AAJ and have
worked together on numerous complex projects.
Moreover, over the years, we have developed unique and robust methodologies for project planning,
development, quality assurance, implementation, and support. For more information on our methodologies,
please contact us and we will gladly share the details.
Q:
What makes a nearshore outsourcing initiative a success?
A:
The answer is simple; it takes: Talent. Leadership. Technology. Methodology.
Talent
AAJ employs the best and brightest consultants with Agile experience. Our senior consultants average 10+ years
with the organization and have all worked together on complex projects. We are constantly recruiting talent
with expertise in the latest technologies and methodologies.
Leadership
Most US organizations seek out a local nearshore partner to help navigate the bureaucratic web and ensure a
smooth operating environment. In addition to having headquarters in the US, AAJ has a corporate presence and
intimate knowledge of the market landscape in Argentina and over a decade of experience successfully
delivering nearshore outsourcing projects.
Technology
Video teleconferencing used daily to communicate for the needs of your project.
Methodology
AAJ uses the Agile methodology, which has proven to be the best for nearshore outsourcing. Our experience and
the unique software development and project management methodologies that we have refined over the years,
allow us to foresee and mitigate any potential development risks to your project.
Q:
What is the AAJ client onboarding process for nearshore projects?
A:
It is important to note that our approach emphasizes providing you with access to a cohesive
rather than a sum of individuals.
project team,
We kick-off the process by engaging with your team leaders, understanding and documenting the business
drivers for the initiative, the overall project strategy, requirements, expectations, deliverables and time frames.
We proceed to identify potential gaps in expertise and create a Recruitment Guide, custom to your project.
Upon receiving your sign-off on the Guide, we initiate the process of composing a team that fully addresses your
distinct requirements and objectives.
Once the team structure and resources are in place, we will present you with your custom “Team Brochure,”
that includes detailed profiles on every team member and an explanation of their role in the project.
The entire process can take up to eight weeks, depending on the complexity of your requirements and specific
project needs.
Q:
I’d like to discuss my nearshoring options, how can I contact AAJ Technologies?
A:
You can either Contact Us through our Website, or call us at: 800.443.5210