Frederic Joye – From Swiss Banker to a BPO Company Owner

Derek:  Hello again and welcome to another episode of the Outsource Accelerator Podcast my name is Derek Gallimore and today, I am joined by Frederic Joye of Arcanys.  Frederic is every bit the Swiss archetype.  He is well educated, a wonderful man.  He is a Swiss banker.  He then went to Hong Kong and started on his entrepreneurial career working in currencies and all of this complicated stuff, and now, Frederic finds himself in Cebu, which is the Philippines’ second city, some might say.

A really interesting story and he now is the co-founder of Arcanys, which is a BPO.  In this episode, you’re going to learn a lot.  First, we’re going to hear about Frederic and then we’re going to deep dive into how he started Arcanys and his thoughts behind a high value outsourcing proposition and why he chose Cebu to do it and also exploring the opportunities here in the Philippines.  It’s a great episode.

If you want any of the show notes or you want to get in touch with Frederic, then obviously go to our show notes, which is at outsourceaccelerator.com/77.  This episode is 77, so go to outsourceaccelerator.com/77.

Derek:  Welcome back everyone, we’ve got Frederic Joye.  Hi, Frederic.

Fred: Hi, Derek.

Derek: I really believe in the Philippines positioning itself as effectively the Swiss banking of the outsourcing.  I really feel that the Philippines is world-class in outsourcing and is one of the world’s experts.  It’s really interesting that we now, today, have an ex-Swiss banker.  You might be able to correct me on that, but moving into the outsourcing space.  So, yeah, thanks for joining us, Frederic.

Fred:  Thanks for having me, Derek.

Derek:  Initially, what I would love to hear from you is basically, you are sitting down in Cebu, which is effectively Philippines’ second city, but is also a very progressive city with huge growth.  How did you find yourself here coming all the way from Switzerland having had a banking and entrepreneurial background?

Fred:  Well initially, my first stop in Asia in 2009 was Hong Kong where I actually joined my current business partner, Alan, to work on an ecommerce venture.  The first year I was there, everything was going well, but the industry changed and then we were looking at finding staff that would better serve our customers to keep our competitive edge.  We heard about someone in the Philippines that had a small business in the same industry as we had that wanted to partner with someone.

Basically, that’s the first time we heard about the Philippines.  We came to visit Cebu and we saw that when we arrived that the skills that we’re looking for both in terms of customer service people and software development people were really interesting for us.  After three, four months of back and forth from Hong Kong, we decided that we’d actually move the entire team to the Philippines because we really thought that we could increase the quality for our clients.

Derek:  Right.  You’re sitting down in Cebu and what I’m trying to get across to my audience is that the Philippines is not a backward state.  It’s not if you outsource, people aren’t sitting in sweatshops.  There are pretty sophisticated operations here and you are a business person of significant pedigree having come from, you worked for private banks in Switzerland, is that right?

Fred:  Yes.  I’ve worked in the financial industry for close to 10 years before moving to Hong Kong.  I’ve done insurance.  I’ve done private banking and then I’ve worked for a software company that was servicing the top 10 private banks around the world and all that was mostly into technology-related projects where I worked, yes.

Derek:  Right and then in Hong Kong, just to dig a little deeper, you were working for a whopping great big company that was trading virtual currencies effectively, yeah?

Fred:  Yes.  That was the second venture of my business partner.  The first one got sold for close to $300 million and then he created a new one that was in the same kind of market but doing, I would say, different things, and that’s the one we grew and brought to the Philippines in 2010.

Derek:  Fantastic.  I see this really exciting in that you’ve come from Switzerland, pretty sophisticated place.  You found Hong Kong.  You were building out sophisticated stuff and then you found the Philippines and you chose the Philippines to start your next ventures because of the potential here.

Fred:  Right.  There are many things that we really liked about the Philippines and the first one is, of course, the English level because most of our clients both in the ecommerce part and later on in the outsourcing, software development outsourcing, and customer service outsourcing are speaking English, are Americans, are Australians, are people from the UK mostly, and some of them, of course, also from where I am.  I am from Switzerland and France.  All these people speak English are from, I would say, a Catholic or Protestant background.

We have this culture proximity with our customers, so it was very easy to avoid, I would say, the pitfalls you can get from working with other countries.  I’ve worked with China.  I’ve worked with India.  Although the guys were also great skills wise, this cultural and language linguistic difference was a major problem in most of the projects I’ve been working on.

Derek:  Yeah.  These are all kind of subtle aspects of friction, aren’t they, and they kind of add up, don’t they?  If you have a slight language barrier, if you have a cultural barrier, and there’s also time difference, these things kind of add up and accumulate, don’t they?  Yeah, the cultural length of the Philippines is very, or you suddenly found, yeah, is a very powerful ally.

Fred:  Yeah.  I mean, it’s not a small friction.  I think the language and the culture is actually a very big factor in the success of a project.  We wanted really to put all the chances on our sides to succeed in all the projects we’re undertaking.  The additional thing is Filipinos are extremely friendly welcoming and they always want to make sure that whoever they’re interacting with is happy.  If you add all these together, it’s massive advantage with the same skills level as other countries to be in the Philippines.

Derek:  Good and then we’ll introduce, Arcanys, which is the company that you’re now building.  It’s based effectively on highly skilled staffing, be it kind of technical or ware board dev. Have you found that, both the skill levels here in the Philippines but also the depth of the pool compared to whatever Switzerland, Hong Kong or even Silicon Valley?  If you’re trying to build out the best product, can you rely on Philippines?

Fred:  Yeah.  I think there are mainly two factors.  The first one is that I think the government and the universities have understood that those skills are necessary and actually really helping the country.  Software engineers is probably the highest paid job in the Philippines so it’s very interesting to train people for that individually, but also to help the country grow and prosper.

The second thing is that companies have also understood that there were lots of skills in the Philippines and Cebu is one of the main centers in terms of software development.  A lot of companies have come here and have been also further trained people.

This means that the pool is pretty large so a lot of people from also neighboring Islands are moving to Cebu and probably to Manila as well, meaning that there is a huge pool to tap from and then those companies are American companies such as big companies Lexmark, Epson, some Japanese companies as well and others and are training those people even more.  This means that there’s really like a large skilled pool of people that is present in Cebu.

Derek:  Right and because I tell the audience and people that Philippines, I say it’s like the Swiss banking of outsourcing.  It has been doing it the longest.  It has been outsourcing for whatever, 20 to 25 years, There’s a lot of built-in historical operational experience, a lot of executive experience that are like coming here or people outsourcing to here, they can tap into that at the going rate and a long with that, you get the 25 years expertise.

Also, as you say, there are these big conglomerates that have been outsourcing here for such a long time and building the executive knowledge and the executive experience that we can now tap into relatively cheaper.  How do you find the learning cycle for people now because technology is one of those things with the highest learning redundancy in whatever language you’re coding today is probably going to be redundant in six months?  Are you finding that kind of handicap somewhere like the Philippines or it makes the Philippines more of an equal footing to any other city because they’ve just to keep on learning?

Fred:  Yeah, I think most people keep on learning and we also do our own trainings to make sure that they are really at the edge of the technologies that are being used today, but because there are so many companies in Cebu, from what I know, that people move on the skills level pretty quickly.  We don’t have to deal with people who are working with like really old technologies and have to skill them up.  No, people have a pretty current skills when we hire them.

Derek:  Right, right. So Arcanys, you have co-founded and you’re building now.

Fred:  Yeah.

Derek:  Most people think of outsourcing and they think of call centers and they think, let’s just have a few back office stuff handling guest services, but really, it’s far more than that and the potential is far greater than that, isn’t it, in that you can have highly skilled functions down here, but not only that, you could almost tip the pyramid upside down and have virtually the entire organization built or run from somewhere such as the Philippines and then just have a small amount of staffing in the high cost delivery world.

Fred:  Right.  Yeah.  We like this idea of this hybrid model where you keep, as you mentioned, the top staff in the country where the company is really operating and selling their products and services and then having kind of the backbone of the business in the Philippines.  For example, one of our clients, our oldest client and biggest client who has many people working with us where we help them with software development, we help them with server management supports on Amazon web services 24/7, so we have people monitoring.  There are thousands of servers on a 24/7 ongoing basis and then we’re able, together with them, to build their company so quickly that they got sold to a bigger group in Finland after only, I think six years of operating.  The biggest part of the team is in the Philippines with us and they have a smaller team in Sweden.

Derek:  Right.  Just introduce exactly what Arcanys is, we’re actually going to go into that.  We’re going to deep dive into that in a few tracks and so stay tuned for that, but what does Arcanys do exactly?

Fred:  Mostly, we do software development outsourcing and there are different ways of doing software, building software and the way we do it is basically with this hybrid model that I mentioned earlier where we complement existing technical teams and extend them to accelerate development of products, to accelerate, I mean, to reduce time to markets, and increase the features that the companies can actually provide their customers and of course then generate more revenue.

We have so much experience with developing software.  We’ve probably done more than 250 projects over the last seven years that we also consult with these companies to actually increase the efficiency of their own software development teams and make sure that they get the most output of whoever is working on their software.

Derek:  Right and then software development, I think of that as kind of a project based, like, do they assist building an app for six weeks and it’s done or is it more of an ongoing relationship and outsourced staffing solution for these bigger software developers?

Fred:  Right.  It’s mostly the second one, so it’s dedicated long term teams that we provide.  We also do work on a project basis, but we believe that the real benefit of outsourcing is on the long term is by extending a team with, for example, us in the Philippines and transferring parts of the knowledge because this is where really you benefit the most from training people, cost savings, and the trusted relationship with the provider.

Derek:  Absolutely and again in my experience, you get people to gingerly come over here and they try outsourcing, and they may be take on a part time bookkeeper, but within six months, they realize how effective it is and they are building an entire teams, they are getting dozens of people over here.  Do you find that with your experience with high end software developers?  They get a bit of a part time, whatever, tester and then eventually, they build the entire team with you?

Fred:  Yeah.  That has happened where people, they don’t want to risk too much so they just say like, “Oh okay, I’m going to try getting a tester” or what we do as well is we let them try our team for two weeks.  We discuss on the terms before that and if they like what’s happening in the first two weeks then we would say, “Enter into this agreement where we keep on working together.”  So far, no client was started with this risk-free trial, if you want, has backed on using them.

They keep on using them and we just have to make sure that the arrears to starting relationship with an outsourcing company is not too high so that they can really embrace it and carry on, but on our end, we are also pretty demanding on who we are working with simply because outsourcing is not just something where you throw a bone at someone and say like, “Work on those requirements and then I come back in three months and everything is going to be perfect.”  It requires a lot of communication and being aligned in the vision of how the product is going to get built.

Derek:  Right, incredible.  As I mentioned, we will deep dive into exactly what we provide and how you provide it and how it is unique to other providers in the space in our coming episodes stay tuned.  How can people get in touch with you, Frederic?

Fred:  The best is via email or by emailing me at [email protected] or simply coming on our website and dropping a note in the contact from.

Derek:  Fantastic and all of those contact details will be in our show notes.  Thanks very much, Frederic.

Fred:  Thanks, Derek.

Derek:  How was that?  Frederic is a wise man, I tell you.  If you want to get in touch with Frederic or Arcanys, then here are his contact details but also you can also find it at our show notes.  That is at outsourceaccelerator.com/77 for episode #77.  If you want to get in touch with us at all at Outsource Accelerator, just email us at [email protected].  See you next time.