The Scalers is leading the charge with a new type of digital, remote workforce – but what is offshore software development all about?
Rapid advances in communications technology has made the world a smaller place: remote working and instant multi-person communication is a piece of cake. Despite this exceptional technology, and despite many companies having struggled to hire talented software developers for some time, most businesses still recruit only in their local area – but why?
The model we’re looking at today is called “offshoring”, and it has become one of the most empowering, dynamic, and effective growth strategies for companies across Europe.
We’re sitting down with Emilien Coquard, Founder and CEO of The Scalers, one of the fastest-growing offshore software development businesses in the world. In today’s interview we’re going to look at what offshoring is, exactly, as well as who benefits from it and why.
Hi Emilien, welcome to Business Matters. Could you start by telling us a bit about yourself, and your job?
I’m Emilien Coquard, the CEO and co-founder of The Scalers in Bangalore, India.
Where to start! I first moved to India in 2011, working as the manager of a French company’s development centre out here. Straightaway I was struck by two things. One, the level of talent within the team was super impressive – Indian engineers didn’t have a strong reputation for software development back home. The second thing was the awful working environment that many engineers were subject to within the big service companies.
It was like the Shenzen of software: everything done en masse. It was a fascinating contrast to the operation I was running in my development centre.
So I decided to do something. Our model when founding The Scalers was to put the engineers at the centre of everything, and build around them. The goal was to find the most interesting companies in Europe and build talented engineering teams for them out in Bangalore. That was 4 years ago, and now we’re 160 people with about 15 new hires per month, working with companies all over Europe!
So – what is the offshore software development model?
Western companies have been struggling to find quality engineers, domestically, for years. Around 30 years ago, these companies went to India, Eastern Europe, and South America to recruit cheap labour. That’s basically how offshore software development first got started.
But now companies are looking for value, not the lowest costs. Offshoring used to be about finding a price you couldn’t get at home; today it’s about finding the skills and people you can’t get at home. You’ll find that many engineers in India are now as strong as, if not stronger than their British or German counterparts.
Companies are coming to India to find talent, to find innovation, and to access profiles that they can’t obtain elsewhere.
And so from my perspective, offshore development is about building a close-knit team of expert developers, based in Bangalore, which provide otherwise unfindable value to a European business.
How do your offshore development projects get started?
The companies that work with us often start with a team of anywhere between 5 to 150 engineers – a team that’s aligned with their vision, strategy, and overall business. When you build software, one of the key parameters – and this is crucial to our entire business model – is ownership.
Imagine software plays a vital role in your company. You can’t just outsource it. You can’t just pack it off with some vendor and expect a great result in return. If software is truly important to your business, you need people who are aligned with your vision, people who are your mates, who are your team and who push each other to build great software.
So the first thing we focus on is defining and laying the foundations for that team culture. We visit the company in person, meeting with senior stakeholders to learn about their culture, environment, and dynamics. We talk with everyone and try to absorb as much culture and understanding as possible.
This is the stage where we explore most of the other details too: schedules, strategies, high-level profiles, pricing – all of that.
When you start recruiting then, how do you find the right candidates?
Because our clients are not typically “famous” in India, we start by building a comprehensive employer branding. We want to show off the company: their product, ethos, people, culture – everything. Armed with this, our headhunters scout the market for potential matches for all job profiles.
We provide an incredibly hands-off recruitment approach, doing all the heavy lifting while our clients wait for the magic to happen. Finding the right people is at the core of what we do. For each role, we interview anywhere from 100-160 candidates, with our clients having the final say. It’s pretty massive.
Also at our core is culture. It’s extremely important to us that we lift our client’s company culture and move it to the Indian office. We build a space that’s transparent and open, that fosters communication and idea generation and allows workers to express themselves – but it’s always tied to the company’s own culture. This creates a powerful dynamic and provides a huge boost in terms of retention, job satisfaction, and productivity.
We’ve got a team on the ground that provides a sort of incubation period, for the first week, making sure the dynamics are good, everyone is well-integrated between locations and the various layers of management. This incubation period is essential: it gets the whole team up-and-running as efficiently as possible and prepares the team for growth.
And then it’s a continuous, rolling process from there. We keep scaling up operations as much as the client needs. For example, we recently worked with a British fintech and hired 30 engineers in 3 months. They told us that back home, that would’ve been impossible – 12 months, 18 months at least. Our access to amazing people, and our proven method, allowed us to deliver the 30 senior engineers in a fraction of that time.
What are the benefits of offshoring? Who reaps those benefits?
Any company that hires engineers in Europe is a potential candidate for offshoring. Right now, the battle for talent – the competition for quality engineers – is just insane. Everyone working in the IT industry today is aware of how hard it is to find great talent locally. But they also don’t necessarily know to look elsewhere!
Let’s look at Bangalore. The city is thriving with incredibly talented developers – it’s another world from the stereotypes we have in our heads. Companies shouldn’t look to offshoring for cost arbitrage; they should look because that’s where the talent is. When I said the definition of offshoring has changed, that’s what I’m talking about: it’s transitioned from a cost-cutting option to talent-accessing option – but still with leverage on the cost.
Let’s get more specific: what is the value to your clients from going offshore?
The headline benefits are that firstly, going offshore allows you to access talent you wouldn’t find in your home country. Secondly, it allows you to scale up operations – fast. You can build in just a few months a team that would take 12-18 months in Europe!
This gives you an advantage over your competition. Say you and your competitors all have their offices in London, but you alsohave this super-talented, super-scalable team in Bangalore. It’s like a secret and powerful weapon. You have the power to grow – they don’t. And if your competitors already have an offshore team, they hold the advantage over you. By the way, we recommend this offshore development center for your business.
It’s not even a question of “Should I go offshore?” for many companies – it’s just a matter of where should I go? Because that’s how companies are today. If we look back 50 years, companies were a closed-box.
Then companies started spreading, outsourcing work like accounting. Then came the geek economy, the coworking revolution, and companies becoming much more agile and lean. And now the larger companies are playing catchup, using methods like offshore teams to spread out and find the best talent. The value these companies get from offshoring is immense.
There must be some risks though, right?
Of course there are risks. Everything carries risk. The big risk is working with the wrong partner in going offshore – there are a lot of pretty bad companies in this field. Old-style offshore development is notorious for low-level companies and suppliers. If you Google “offshore software development agency” and you send off a project in a waterfall development model, you can be 90% sure that it’s going to fail.
I think it’s crucial to partner with someone who considers you exactly that – a partner. Not a client, but a partner to build something incredible with. The most tempting risk in offshoring is chasing cheap, and cheap never means good.
But if you work with a model like ours, where your company is included all the way, and where we’re building a team that’s just for you and fully integrated with your vision and mission… it’s a different world.
What should CEOs know about this model before they arrange a consultation?
What’s interesting about our model is that you just use the same tools, the same processes, everything the same as you do right now. When we start working with new companies, they’re normally asking, “Oh my god, how will I communicate with our engineers?”
And I just say, “How do you communicate with your colleagues?” They say, “We use Slack and Google Docs.” I can smile and reply, “Well then you’ll use Slack and Google Docs!”
Our model… it’s just your colleagues, but 10,000 km away. There’s nothing to “know” in terms of daily operations. When asked “How do we organise the work?”, I always reply, “How do you organise the work now? How do you structure tasks with your current team?”
And then they start to understand. It’s really simple: there’s nothing new to invent, no new processes to create. Just add people to your tools and your bug trackers and get to work. That’s the beauty of our model and why it’s been so successful. It’s so integrated that some people don’t even know they have an offshore team!
It’s just one big team, always building together, and that is what brings incredible value to our clients.
