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How Software Development Outsourcing Can Build a BIG Competitive Advantage Against Larger Firms

Guest: Fred Joye, Co-founder of Arcanys, a premier Swiss software development outsourcing firm based in the Philippines. Fred’s firm specializes in building and maturing highly skilled, dedicated teams of developers for startups and established businesses. Arcanys is also a Strategic Partner of CEO Coaching International

Overview: The best companies hire the best people, period. That means even if your tech firm isn’t directly competing with Facebook and Google, you’re still competing with Facebook and Google for top talent. To win that battle, growing companies need to get creative about how they build, compensate, and motivate their teams.

On today’s show, Fred Joye discusses how companies can use outsourcing to scale their development teams with top software engineers and compete against BIG tech companies that have more resources. 

Fred Joye on matching company efficiency with client and employee needs:
“Initially we started looking for projects where we would take on the entire project. We noticed that this wasn’t a very efficient way to sell because those projects had an end date. Also, the clients we were working with were maybe less sophisticated than the ones we’re working with today. This would lead them to relinquish the entire responsibility of the project and get subpar results for themselves.

“And that’s when we switched to try to place software developers as a long-term team extension for clients who already have a tech team. Meaning that they could manage the project themselves so that they own their technology. That also means they would hire developers for the long term, which would lessen the churn of clients for Arcanys. That was better for the company itself, but also for the employees because they actually learn on the job and become more and more productive for the client over time.”

Fred Joye on how outsourcing can create multiple competitive advantages:
“The price differential that you can have with the Philippines, compared to the U.S., we look at around 70% to 75% savings for a mid-level developer. Cost is one element that is very important for companies that are tight on cash or have to keep the runway as long as possible before the next round of investment or the breakeven.

“Another element is the speed. We know that companies take three to six months to find a good candidate. And because our job in the Philippines is to keep outsourcing people all the time, we’re interviewing hundreds of people every month. So we have this flow of applicants that we can deploy really quickly. We keep a bench of people who are actively waiting to be onboarded for new clients that are coming to us.

“Where we make a difference as well is attrition. In the U.S., the fastest way for an engineer to earn a lot more money very quickly is to change jobs every year. And that’s super detrimental to companies because it costs a lot of money to find someone and then to train them up. We work incredibly hard on the culture of the company to make sure that people feel happy, that they have really great projects to work on. We are very picky about what clients we work with and making sure workers keep being trained and are working on really cool technologies. If you nail the benefits, the culture, and the interest of the job over the long term, then you’re able to keep attrition pretty low.”

Fred Joye on learning and pivoting to BIG:
“At the start, we were in the wrong market and trying to sell the wrong kinds of services. I think it’s about resilience. It’s about showing up every day. It’s about believing in what you do and learning along the way.

“We made so many experiments with the types of services, positioning, and company structure. When I look back, it’s this transformation of identity in terms of the services, in terms of the positioning, and also internally how we wanted to run the company to make sure that we could keep on growing without people feeling we were becoming a behemoth or becoming too process-oriented, which would kill a bit of the culture. And with my business partner, it was mostly about communicating as much as possible to make sure that we’re always aligned. Just like parents with their kids, to be a united front on how we want to run the company and take care of our employees.”

Fred Joye on LinkedIn

How to Expand Your Profit Margins During Tough Times – CEO Coaching International’s Dan Smytka discusses specific strategies that will help you keep moving products, delivering services, and expanding your profit margins during challenging times.

5 Ways to Compete and Win Against Larger Competitors – CEO Coaching International’s Juergen Rochert identifies five areas where smaller firms can compete and win market share if they follow an effective plan.

About CEO Coaching International

CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average EBITDA CAGR of 53.5% during their time as a client, more than three times the U.S. average, and a revenue CAGR of 26.2%, nearly twice the U.S. average.

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