In 2003, after nine years as a technology manager with Oracle in the Philippines, Joseph Benjamin "Joben" Ilagan co-founded Seer Technologies as a five-person consulting and software development start-up in Manila.
Today, he serves as president and chief technology officer for the company, which has grown to 34 employees and annual revenue of 34 million pesos (about $750,000). Three quarters of Mr. Ilagan's business comes from Philippine companies. The rest is from international clients, including Yahoo! Southeast Asia and others based in Hong Kong, Singapore and Canada.
"We want to shift from pure software development services, where we are paid by time or by so-called 'deliverables,' to software products, where we get paid licenses, royalty fees or, as cloud-computing emerges, transaction or subscription fees," Mr. Ilagan says.
That plan includes building more custom-made mobile applications for forward-looking organizations, no matter where they are located geographically.
One of their recent briefs: working with an interactive technology agency based in Montreal on a widget for Mac computers for a media brand. For competitive reasons, Seer's client did not want its own client to know who built the mobile application. After delivering the project on time and on budget late last year, Mr. Ilagan's firm has been collaborating with, and pitching for, more work from North America.
The Canadian company found Seer by word-of-mouth. "They asked some of their friends who already do outsourcing to the Philippines (because they heard that Filipinos are easy to deal with)."
The firm contacted Mr. Ilagan in mid-October and the project began in November. It took about 150 hours, for which he billed $30 (U.S.) an hour, to realize the product, which was launched in December. "I've heard from some of our current Canadian prospects that Filipinos are more customer-friendly and that they've fought and terminated engagements with service providers from another country because they were rude and there have been lots of unresolved issues," Mr. Ilagan says.
Philippine software developers tend to charge more than from other source countries such as India, the leader in the industry.
Seer has had a number of contracts working trans-nationally. For example, the Manila firm has been creating a Blackberry application for the Singapore publisher of the Miele Guide, Asia's only regional and independent restaurant ranking system. But as his company expands, Mr. Ilagan has found that time zones can be a big challenge.
"Software apps development is very communications intensive. It requires a lot of interaction with IT department people, end-users, project sponsors, managers," the Seer president says.
With the Canadian contract, there was never a personal meeting and most of the communication was by e-mail or instant messaging. With Manila 12 hours ahead of Montreal, this meant virtual exchanges from 8 a.m. to 9 a.m., or 8 p.m. to 9 p.m.
"For Singapore and Hong Kong customers, there are no issues with time zones," Mr. Ilagan explains. "With Montreal, the challenge is the difference in time zones and the turnaround times in responding to written communication, but if we stick to small projects, for now this should be okay."
Bigger projects involve more people on either side, making communications more complex and dragging out the number of hours before issues can be resolved and stages in implementation approved. This is a situation Mr. Ilagan sees clearly as he works with a client in Texas.
Greater complexity also means that Seer needs to work around common technology infrastructure problems in developing economies such as the Philippines. "If the system requires more software programmers on our end, I need to ensure that all of them have broadband access from home and they can participate in remote meetings," Mr. Ilagan says.
So far, working with Canadians has proved to be a positive experience for Mr. Ilagan, who holds a masters degree in computer science from the Ateneo de Manila University, where he taught in the Management Information Systems faculty. "Culturally we are quite comfortable with Canadians. In a lot of ways, they are in fact easier to deal with than Filipinos. As long as contracts and written agreements are in place, it is easier to point out if certain tasks are 'out of scope.' Filipino clients tend to rationalize that certain things are actually in-scope even if they are not."
Mr. Ilagan's main advice to Canadian companies looking to outsource custom software development to the Philippines: Be patient when it comes to modes of payment (there are not a lot of options), make the most of virtual meetings, and adjust to the time difference.
"Filipinos have this thing called 'malasakit,' a word which is most closely translated into English as 'compassion.' Up and above what is agreed on in the contract, we go out of our way to make sure that the customer is happy, but if this is abused, it will hurt the Filipino company's business and you may not see this company survive. So please be gentle."
Special to the Globe and Mail
Alexandra A. Seno has written about economics and business trends in Asia since 1994. She is a regular contributor to Newsweek, the International Herald Tribune and The Wall Street Journal Asia. She lives in Hong Kong.