Global Search for Software Outsourcing Leads Firms to Uruguay, and Kaizen Softworks

Uruguay is a relaxed country, digitally connected, and globally competitive across a range of industries—like software development. Kaizen Softworks in Montevideo embodies these trends by building apps for U.S. customers with advanced technical needs. It is a niche business that requires a rare blend of programming excellence, global business acumen, and a willingness to customize solutions. Kaizen Softworks favors this niche, because like Uruguay itself, the company thrives on an open and collaborative atmosphere.

Guest post by: Sean Goforth

In the early 2000s, several global businesses began making investments in Uruguay, based on the belief that the small country would make a good hub of operations for service delivery to the rest of South America. Tata Consultancy Services was among the first to set up its regional headquarters in Montevideo. Quietly, other multinationals followed suit. Meanwhile, a succession of governments from both sides of the political aisle made a series of long-term investments to boost Internet access and expand educational opportunities.

In October of 2009 President Tabare Vazquez handed out the last of the vaguely lunchbox looking XO laptops, at Escuela 28/80, making good on the government’s one-laptop-per-child (OLPC) pledge. With this, Uruguay became the first country in Latin America to fulfill the OLPC pledge. The occasion brought a wave of international media attention, as did The Economist’s declaration that Uruguay was its “country of the year” in 2013. Notwithstanding these moments of fanfare, it’s been business as usual in Uruguay. Even as the rest of South America rode commodity exports from boom to bust, Uruguay just trod along.

Yet, slowly over the years the progressive social policies, and sustained commitment to technological access and education, have helped remake the country. Open, accepting and tech savvy, Uruguay has the feel of a Scandinavian country located in South America. And more improvements are in the offing. Currently ANTEL, the state telecom provider, is carrying out a nationwide fiber optic Internet plan. If all goes according to plan, the additional investments will give Uruguay 100% fiber-to-the-house connectivity by 2022.

Owing to the educational and tech investments, Uruguay offers a thriving tech culture of software programmers and a budding startup ecosystem. This helps explain why the business technology sector in Uruguay has become increasingly fragmented since the early 2000s. Stellar programmers may start out at multinationals, but many eventually launch their own firms in order to exploit underserved niches in the market. So unlike Argentina, Chile or Mexico, where large software development firms rule the roost, in Uruguay it is an array of small players--many with fewer than 30 programmers-- that collectively drive the market.

One such firm is Kaizen Softworks. Over the past three years, the firm has grown steadily based on its offerings in full-stack Microsoft & Open Source solutions, a core element of a world-class developer team. Robust and scalable architectures are another specialty, and in recent years Kaizen has expanded its client list by working with partners whose JavaScript-based apps demand a forte in Angular and React. All of this is supported by multi-disciplinary, self-managed, and agile teams.

When Indianapolis-based CuroGens was looking for a partner to develop its cloud-based learning application, it initially focused on options across Eastern Europe. But then one of its contacts in Canada recommended that the firm consider Uruguay. That led CuroGens to discover Kaizen Softworks, and it is extremely happy with the result. “Not only did they have the required technical skills,” says CuroGens director Søren Hjorth, “but more importantly they went above and beyond to truly understand the application design often resulting in suggesting minor tweaks that allowed us to save both time and money”.

Today, Kaizen is building on its technical expertise to reach further into the realms of programming and data science, an emerging differentiator between software development firms. Its strength in Microsoft-based programming has enabled a transition to offerings that include machine learning, artificial intelligence, chatbots (based on the Microsoft bot framework), security, and big data.

Still, for all of its technical prowess, Kaizen Softworks remains a small firm based in a small country. Technical solutions matter, a lot. But the ethos of cooperation between the client and programmers, and the willingness to tailor solutions to meet a client's needs, counts too. Kaizen Softworks founder Fabian Fernandez points toward the firm’s recent work with SmartBorder, a leader in compliance software for imports and exports. Kaizen is building a SaaS version of its products, a project that has advanced based on sync meetings, Agile methods, chats through Slack, and the occasional trip to SmartBorder headquarters in Buffalo, NY. “Understanding the business of SmartBorder and having the Kaizen team fly to their office in the US for short periods of time has been another factor that played a main role in understanding exactly what needs to be built, and how to deliver value that fits our client’s needs,” says Fernandez.

To ensure it stays on the cutting edge, Kaizen plays an active role in the programmer conferences. For example, the firm Co-Founded .NET Conf Global. Since 2014, the Microsoft programmer conferences in Uruguay, Argentina, Colombia and Chile have brought together more than 3,000 programmers in total, making it the largest tech conferences in the region. Other smaller events abound in Montevideo, and Kaizen’s programmers actively take part. It helps ensure world-class programming skills and the early adoption of the latest trends. Indeed, in 2018 Kaizen will be opening a “tech hostel” to host programmers from the rest of the country in a space next to the company’s new headquarters so that they can stay queued in to the latest developer trends. These moves are helping to spread the firm’s expertise to the larger programmer community. Because like Uruguay itself, Kaizen Softworks prefers an open and collaborative atmosphere.

Sean Goforth

Sean Goforth

Sean Goforth is Director of Research at Nearshore Americas, where he oversees analysis of Latin American markets as hosts of outsourcing investment.

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