What could possibly go right?

Outsourcing – engaging with teams of talent, in a local or off-shore environment to drive cost efficiencies and productivity gains – has its supporters and sceptics. 

The supporters are those businesses who were early adopters, going on to experience for themselves that well-managed outsourcing can drive massive benefits. The sceptics, on the other hand, are caught up in a “what if” quandary. 

Forward-thinking clients in media, finance, logistics, banking and SaaS have found great value in outsourcing. They are very careful who they work with and how they work with outsourcing teams to gain competitive advantage and help in-house talent reach goals and exceed stakeholder expectations.

“Outsourced software teams can overcome business, productivity and skills challenges and pave the way for rapid growth,” says Mike Hibbert, Chief Technology Officer of CodeHQ, a leading New Zealand-owned technology outsourcing firm. This approach requires fostering partnerships that support agile scalable teams, introduce new skills, and provide thought leadership and ideation. 

It also emphasises risk mitigation and the integration of cutting-edge technology such as modern web, mobile, and data solutions. 

By adopting better ways of working, embracing agility, ensuring continuous delivery, and leveraging new technologies like AI, outsourcing can drive sustainable growth and innovation.

Over 30 years of outsourcing success

CodeHQ has run an extremely successful software development business for the past 31 years. Two of its founders, Peter Vile and Mitchell Pham, lead the company today. For nineteen of those years, they have built a talented outsourced team based in Ho Chi Minh City, Vietnam. 

This talent base, both here and in Vietnam, makes outsourcing viable, sustainable and worthwhile. Outsourcing enables nimble activity, scaling up at the speed of business and limiting overheads, because human resource can be turned on and off like a tap.  Here are just a few reasons why it’s vital for businesses focused on growth and what CodeHQ is doing to make outsourcing work seamlessly for their clients. 

Under-investment in technology

Decades of under-investment are beginning to bite. “Our technology systems need substantial upgrades. Legacy systems, early web and mobile and poor levels of automation in every sector are outdated and inefficient,” says Hibbert. CodeHQ is addressing this through comprehensive modernisation projects, ensuring robust and scalable technology infrastructures.

Rising expectations

Demand for high-quality digital services has increased significantly. “The expectation for seamless digital experiences calls for substantial investment in cutting-edge technologies,” according to Hibbert. CodeHQ is pioneering initiatives to enhance user experiences through advanced software solutions and AI-powered applications.

Inadequate depreciation and maintenance

Like infrastructure, software systems require updates and maintenance. Failure to allocate funds for ongoing maintenance and modernisation has left many systems outdated and vulnerable. CodeHQ is implementing proactive strategies to ensure always-on modernisation, improvement, security and reliability.

True cost of ownership

Custom software development requires an initial investment, including design, development, testing, and deployment. However, it offers tailored solutions that can precisely meet an organisation's unique needs, leading to long-term efficiencies and competitive advantages. 

Off-the-shelf software can sometimes have lower upfront costs or quicker implementation times, but this rarely is the case in the real world and entails ongoing licensing fees, lock-on, offers limited customisation and presents integration challenges. Off-the-shelf solutions also have expensive upgrade paths and from time to time require replacement projects as business needs evolve or as the supplier changes their place in the market. 

In contrast custom software provides better alignment and flexibility with business processes and customer needs.

The cost of outsourced development compared with employing bigger teams is easily misunderstood. The true cost of employment in comparison must include cost of hiring mistakes, inability to scale down or temporarily scale up, constant wage inflation, consideration for overheads and HR management, the cost of individuals’ career development, the impact of organisational politics and habits and an exaggerated view of the value of “human-carried” IP. Good outsourced development and testing teams are focused on deliverables and customer care, first and foremost. This drives productivity and focus.

Better projects

Custom-built solutions lead to better project outcomes. By precisely matching technology solutions to the specific needs of a project, CodeHQ ensures optimal performance and satisfaction. This tailored approach reduces implementation issues and increases overall project success rates.

More flexible teams

CodeHQ’s approach also promotes more flexible teams. By developing bespoke solutions, teams can adapt more easily to changes and new requirements, fostering a more agile and responsive development environment. This flexibility is crucial for handling dynamic market conditions and evolving client needs.

Rapid scaling with outsourced teams

Using outsourced teams allows for rapid scaling up and down to suit project phases. Unlike relying on full-time employees, who bring layers of hidden costs and limited flexibility around skill sets and the ability to scale down, outsourced teams provide a more adaptable solution.

CodeHQ’s outsourced teams can be quickly assembled or disbanded to meet the specific demands of each project phase, ensuring efficient resource utilisation. 

Risks and mitigations

Offshore outsourcing can sometimes raise concerns as to potential communication barriers, time zone differences, quality control, and data security. 

However, when managed effectively, these issues can be mitigated, and the benefits can far outweigh the risks. Here are some of the ways CodeHQ makes it work for everyone.

  • Risk sharing and mitigation strategies: CodeHQ has been working with New Zealand customers for more than 30 years and has a robust approach to managing risk as a true partner.
  • Quality management: Quality plans at every level, supported by professional testers and experienced team leads ensure quality is well managed.
  • New Zealand ownership and control: CodeHQ fully owns their offshore operations, providing direct control over activities and aligning business goals while mitigating risks associated with traditional offshoring models.
  • Mature teams, retention and stability: staff retention rates at CodeHQ are impressive, both in New Zealand and Vietnam. The business has a reputation as an excellent employer.
  • Proven track record: CodeHQ has worked with some of New Zealand’s best companies – winning contracts over the biggest global outsourcing companies and maintaining positive multi-year relationships with our clients.

A well-chosen outsourcing partner like CodeHQ avoids these risks through established strategic practices, strong governance, and proven methodologies. 

Ultimately, offshore outsourcing is a highly beneficial strategy for businesses seeking to leverage global talent and achieve cost efficiencies, as long as it is approached thoughtfully and managed properly.

Verifying they are outsource-ready is the first thing businesses want to do.  

To help answer this, CodeHQ offers a confidential, obligation-free 60 minute readiness check that will review need-state, objectives, preparedness and alignment with the best ways of working with outsourced local and offshore software teams. 

Businesses interested in CodeHQ’s outsource-readiness check can click here to learn more and book a session.