7 reasons why software development outsourcing is even more relevant after COVID-19

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1. The difficult equation of delivering more while spending less has never been greater than now. Outsourcing brings a winning solution.


The COVID-19 pandemic—and the global economic slowdown that came with it—is forcing every business to rethink their return expectations. Across industry, companies are facing the challenge of maintaining service and product delivery of the highest value to their clients for even less money. Tech-enabled businesses are no exception. And for many of them, finding a durable win-win balance between operational savings and better, feature-packed software solutions for their users is a growing struggle.

Value for money. Truth be told, getting the best value for money in software development is no easy thing. The very notion of value for money is complex and involves tens of unsuspected factors. But as business owners try to adjust their operational model to boost product development without burning through cash too fast, outsourcing select areas of their development work to a third-party provider can be a safe and powerful move forward. In fact, for those looking to refocus on their core activities and explore more cost-effective development strategies without compromising resource models, outsourcing is a real game-changer. The magic is in the combination of hiring the right professionals and an engagement model that fits the bill. It shouldn't come as a surprise that companies following this route often report the reductions in development time not only reduce their investment costs but ultimately lead to earlier opportunities for revenue earning, which everyone is under pressure to deliver

Remote work. It may never have been the plan or the expected culture fit that's been forced on so many businesses but with remote work becoming the new norm, more and more entrepreneurs no longer see significant advantages in paying for higher local salaries. Here’s the question on business people’s minds: “Why break the bank to hire local engineers working mostly from their homes, when you can hire the same skills for half the price in an alternate setting?" Not to mention the savings on recruitment fees, office space, and all the perks. If that paradigm shift did not appear with the 2020 pandemic, it clearly got accelerated the past few months, when developers have come to expect a very flexible work schedule. In 2019, a study from DigitalOcean was already reporting that “remote work is not just something they prefer, but something they increasingly demand from employers”.


2. The past few months have taught us that well-prepared teams can deliver successful sprints without being physically together.


Productivity. Whether you have known for a long time or only just recently discovered it, work from home (WFH) is NOT synonymous with extended vacation and productivity loss. Quite the opposite, in fact: your teams are likely to perform surprisingly well from home.

As they are forced to communicate by phone, skype or zoom amid the COVID-19 pandemic, many companies around the world are having to accept the reality that working from home is very likely for extended periods of time. There's a lot of debate on “WFH” life, and for good reason: it’s just not for everyone. Or to be precise, it’s not compatible with all types of work. Research from Professor E.Glenn Dutcher indicates that working in a less-structured environment can drag productivity down and encourage distractions among people performing “dull” tasks. But, conversely, the same work environment proves to have a strong positive impact on the productivity of creative tasks like software engineering, design, or content writing. Not only that, but most technology companies that encourage and support remote work report higher levels of employee retention and engagement, reduced turnover, and increased productivity and autonomy. With that in mind it seems appropriate to measure the satisfaction levels clients feel with their outsourced Arcanys team.. What we found was, 25% of clients noticed an increase in productivity and/or communication, according to an internal survey conducted in April 2020.

Satisfaction. The autonomy brought by this structure has often translated to higher employee satisfaction. According to a report by TechRepublic, remote employees said this working style has greatly improved their work-life balance as it removes the stress of commuting (77%), enables them to work from wherever they want (75%), and allows them to care for children or family members when they need to(56%).

As an employer, and perhaps counter-intuitively, there are many reasons to be optimistic about this working arrangement being a productive one. As Daniel H. Pink puts it, “management isn’t about walking around and seeing if people are in their offices. It’s about creating conditions for people to do their best work”.

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3. A good outsourcing environment brings so much more than just remote work.


Trust-based culture. We know that the work from home setup comes with some serious benefits (both for the employer and the employees). But we also know that in some instances, it can bring a few downsides, too. Typically, the increased difficulty for employees to connect with their co-workers, or the inability to meet together in a room in case a complex project requires it, could pose a threat to the benefits mentioned above. Collaborating with a dev-outsourcing provider that have a demonstrated positive and technical growth culture, the outsourcing setup hits a sweet spot between the advantages of remote work and the reassuring structure of office-based work.

As a reflection on this subject, Arcanys, demonstrably operate on a trust-based culture. We really do. We believe in the power of autonomous remote teams, we believe in their ability to deliver exceptional outcomes from wherever they are. Transparency and work ethics form an integral part of our recruitment and managing processes, and we know that our teams can keep communications smooth and efficient, even thousands of miles away. But we also think that having a common place to gather from time to time is just as important. We know some things are better done face-to-face—be it racking our brains on a complex tech challenge, welcoming our visiting clients, or grabbing lunch together. We need a familiar environment to keep building trust, connect, engage, play, and make sure no one feels left out. Plus, having onsite founders and management has proven to bring an extra layer of quality to the work and boost inter-team collaboration.

With that in mind, it's easy to see how a good outsourcing environment can make a gigantic difference compared to a setup where local employees work from their homes. The remote work, combined with extensive expertise, solid project management, and well-oiled reporting systems from an outsourcing provider, clearly becomes a strength.


4. Hiring in-house is now harder and costlier than ever.


Not only is recruitment a lengthy and demanding process, but the pain continues after your new team member is onboarded; since they unavoidably need ramp-up time to familiarize themselves with your project and become productive. And of course, the more complex the project, the longer it takes. At the end of the day, between the time you decide to add a software engineer to your team and the one you actually see augment your development capabilities, several months have passed. If onboarding time is unavoidable, what variables remain that achieve short and longer term advantages?

Convenience. With IT team augmentation experts like Arcanys, assembling and managing a dedicated team is as easy as it gets. You get immediate access to on-demand experts who are ready to hop on board and get the ball rolling within a week, at no other cost than their salaries. Of course, there is still a learning curve and ramp-up time needed, but they are lessened by years of perfecting efficient internal processes. What then would it feel like to have the team you need, without having to shoulder the burden and costs associated with the recruitment, training, payroll, office space, perks, and so on?

Time efficiency. Hiring from a third-party provider is especially challenging when you need to hire multiple developers. Think about this: in an in-house setup, you have to start the recruitment process all over again for each new addition to the team, risking a misfit every single time. In outsourcing, your partner should be able to recommend to you the profiles that best fit your needs among a wide pool of talent. How is it possible they can achieve this? It stems from the fact that operationally, these multiple hires bring together people who are already colleagues not strangers. Typically at Arcanys, with their skills and experiences being carefully screened, tested, and pre-vetted, your new hires are much more likely to be up to the task and mesh well with each other and your existing team.

Retention rate. Another sensitive point is the attrition rate. In the last decade, trends show more and more staff are expected to leave the workforce in Australia or New-Zealand despite the tech sector’s continuous growth. It’s understandable that employers fear the unwanted impacts of a rising employee turnover on their business productivity and their image. Outsourcing, on the other hand, offers more stable resources. The attrition rate at Arcanys is 60% lower than in Australia or New-Zealand (8% Vs. 20% on average for the IT industry). We effectively retain our employees by making sure they're always happy working for us. By taking care of our people, providing a positive environment, resourcing their work needs we continually receive feedback that this translates into even greater interest and care for our clients. Arcanys ensures your dedicated team stays with you throughout all development stages, which is critical to business continuity and reduces the obvious worries. In case someone does leave, Arcanys assume the responsibility of replacing them right away focusing on team fit and expertise alignment.

This whole new HR approach is a focal point of outsourcing. It offers a time-, effort-, and cost-saving alternative to in-house recruitment, without compromising on quality. And that changes everything.

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5. In such uncertain times, having flexible resources is the key to ensuring sustainable operations.


Obviously, ensuring business continuity and preventing interruptions of mission-critical operations is also a matter of agility and resilience. When we consider the disruption of the pandemic, where a huge number of businesses took an unpredictable turn almost overnight, it’s easy to get the measure of it.

Versatility. We readily accept the fact that equipment hire companies exist because it’s commercially unreasonable to acquire every tool or service that you need as a capital expense. It should then stand to reason that companies often need intermittent access to specific tech skills, but they often make the mistake of hiring people with those skills permanently. They end up trapped in a fragile and unreasonably pricey situation. Using your outsourcing provider’s resources allows you to meet your ad-hoc needs. Take Arcanys: with 220+ experts working for us, our clients are sure to access extra skills when they need them, at some point in their project (such as AWS infrastructure for example).

Flexibility. Unlike in-house setups, outsourcing offers scalability in the number of developers as the requirements evolve. In times of uncertainty, like the ones we’re living in, knowing that you can seamlessly adjust your workforce with no strings attached makes a huge difference. As a tech talent provider, Arcanys cannot simply be bystanders watching companies struggle with fluctuating needs, instead as a ‘go-to’ partner, we’re working closely with our client companies whose needs temporarily alter their team size to meet their new requirements and keep the ball rolling. Anyone experienced in this area recognizes this is a far more difficult and delicate thing to do when you’re the employer.

Time control. How fast you set up your new team can make or break your plans. A window of opportunity isn’t easy to control, so the question facing most is simply, if presented with the opportunity are you prepared and capable of taking advantage of the window when it presents itself. Built and deployed within 1 to 3 weeks, your Arcanys dedicated team can hop on board fast and immediately start working with no time-consuming preparation, supporting you at any phase of your software project. We know time is key, and we pride ourselves in being able to speed up development faster than most in-house teams, reducing your time to market.

Responsiveness. Partnering with us also ensures that your operations keep running smoothly no matter what happens (even, say, with a new city lockdown measure). With 10+ years of successful remote work, it’s safe to say that our setup is proven, adaptable, and robust. Our teams are fully ready to be deployed in WFH mode.That means, every member has a secure internet connection and proper equipment installed at home. We can actually switch to remote work in less than an hour per employee.


6. It is time to surround yourself with people you can trust.


The right people. Businesses naturally have high expectations for their software. The demands of their projects tolerate no compromise on proficiency in all areas of development and delivery. That is precisely where an outstanding software development partner can help raise the bar. With a broad knowledge and a significant pool of available talent, they should be able to bring you closer to the people and experience you really need. They should do everything possible to make sure you surround yourself with dependable players, people who are experts in their fields, and who can join you on an on-demand basis. This is an approach that can be a precious advantage when you can’t afford to gamble on quality and need specific expertise. At least, that’s how we do things at Arcanys.

Knowledge. We implement a thorough interview process to find the top 5% tech talents in the country. And those who join us have continuous training in the latest techs. Ultimately, combined with strong teamwork, industry-specific expertise, and high information retention, this ensures that our clients have permanent access to a deep and rich knowledgebase.

Advice. If there’s one misconception that blinds a lot of entrepreneurs about the true benefits of outsourcing, it’s the one that makes them believe that dedicated software engineers are just coders. They’re not (or, to be exact, they shouldn’t be). At Arcanys, your team members are also genuine advisors—another luxury that is not always available with an in-house team.

Work ethic. Not only do Filipinos speak native-like English (it’s one of the official languages here), but they are also well-versed in Western culture and mesh remarkably well with Australians. The Filipino and Western professionals who make our team place a great deal of value on being respectful, positive, and reliable. They take pride in what they do, are conscientious, and know the value of hard work.

Engagement. Not only that, but we know our employees are happy to be part of the #1 software development company in Cebu and enjoy the many benefits that we offer. In return, they’re highly engaged in the projects they work on. We know that because our clients say so, and because our employees recommend us to their friends. In fact, almost half of our new hires are employee referrals. All this explains why Arcanys is recognized as a trusted tech partner in the Philippines who provides dependable, motivated tech teams who stay with you for the long term.


7. It has never been easier to communicate with counterparts and teammates.


Progress tracking. Communication and transparency—those two words should always be a leading guidepost for your offshore team, and they are definitely well assimilated and implemented on our end. Companies working with outsourced teams should count on being able to access relevant, up-to-date information about project progress, timing and task breakdown, without compromise. Thanks to a very well-oiled daily and weekly reporting system, our clients receive clear information for them to efficiently manage their remote dedicated development teams and make sure the projects run smoothly.

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Collaboration. With a large choice of tools available on the market—be it for task management (e.g. Jira), team collaboration (e.g. Trello, Zeplin, InVision, Bit.ai), and communication (e.g. Slack, Skype)—it has never been easier to collaborate with people who share a common goal even if they’re thousands of miles away. The trick is to have optimized processes and consistent implementation practices.


Conclusion: Outsourcing may, in fact, not only be the safest move right now, it may be a pivotal opportunity to reduce risk and prepare for the longer term.


As a technology-led company, outsourcing all or part of your software development now is a safe move. Done properly and with the right partner, can offer you a competitive edge and better control over your costs, technical expertise and human resources.

Whatever reasons you’ve had in the past for dismissing or being cautious about outsourcing, it’s clear that challenges and unexpected changes expose vulnerabilities in your delivery plans. Those vulnerabilities may be an opportunity for growth, and our clients testify to the success that is achievable in having the right partner.

Drop us a line to know more about how Arcanys can help you take this leap forward.

About the author

Fred had been working on IT and operational projects in the finance and software industry in Switzerland for 10 years before co-founding Arcanys in 2010. He carefully negotiated with and managed outsourcing suppliers as a corporate buyer on the one hand, and led delivery teams as an internal provider to operational departments at an executive level of listed companies in Switzerland, on the other. With nearly 20 years of experience in the industry in Switzerland, Hong Kong, and the Philippines, Fred is now leading the worldwide sales and marketing efforts of Arcanys. View on Linkedin

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