Wednesday, December 14, 2005

Homegrown Outsourcing

Rational Technology for December 18, 2005

While we've been looking at outsourcing firms from outside the province to set up shop in Dumaguete, an interesting phenomenon was occuring alongside it but below almost everyone else's radar (mine included): the rise of homegrown outsourcing businesses. This is an interesting development and one that's equally exciting. True, it may not generate as much employment or as much revenue as a well-established company coming to town, but it's just as important in laying the foundations for entrepreneurship.

A case in point is OriginalCodeWeavers, LLC, a small web development shop. The company develops community and e-commerce portals for clients. These are essentially web sites but done on a much larger and more complex scale. Their e-commerce projects, for example, incorporate modules to Paypal and Authorize.net, so these are far from just your catalog of products with no means of payment or fulfillment.

So what geographical area do OriginalCodeWeavers' clients come from? Los Angeles and other parts of the western United States. And where does OriginalCodeWeavers hold office? Daro in Dumaguete City. Now, think of the possibilities for other types of businesses that can be set up in this fashion.

Let's look at the factors that makes a company like OriginalCodeWeavers possible. To understand this, let's look at the story behind the company and the people behind it.

The idea for OriginalCodeWeavers started out when Neil Yee, originally of Bacong but now working as a system administrator in LA, scoped out some web development opportunities for small businesses in his area. Knowing that some of his friends and contacts back in Dumaguete had the necessary skills to build these sites, he sought them out and formed the business. In this fashion, OriginalCodeWeavers had its start in August this year.

The local OriginalCodeWeavers is a small office, consisting of four developers and an office manager. The lead software developer for this group is Wilan Bigay, supported by Mark Villahermosa, another software developer. Graphical web design is done by Lo Uan King Rebotiaco and content is managed by Emanuel Dejaresco. Office manager Charles Yee makes sure that the other functions essential to running the business are taken care of.

This local team is composed of native Dumaguetenos, all products of the university system in the city. Wilan and Mark finished from Silliman University, Lo Uan from Foundation University.

Their skill sets are varied, and all contribute to the process of web development. The company has a big focus on Microsoft technologies, particularly ASP, ASP.NET, and MS SQL Server, but they build it using an open source content management system called DotNetNuke. However, they are seeing more requirements for projects built using PHP and MySQL, so they are planning to hire additional developers with these skill sets.

An important factor in the formation of this company is Wilan and Mark's exposure to real-world projects while working with Rolf Reierskog's Nestwood CDS. Rolf Reierskog is a Norwegian technopreneur who relocated to Dumaguete and set up some ventures, among of which is Nestwood.

OriginalCodeWeavers is a fledgling company but it shows a lot of promise. Since its inception in August, the company has completed two large projects and a number of smaller ones. At the same time, it is looking to grow its developer base to meet the demand imposed by additional projects.

So what are the factors in a homegrown outsourcing business like OriginalCodeWeavers? Let me give you my thoughts:

1) A commercial impetus. Without customers, it's fairly hard to establish a business. In this case, it was Neil who first spotted the opportunities from LA. While there's no reason a company cannot form first and look for customers later, this customer-driven approach does provide a lot of incentive.

There are a number of people from the province who have found employment abroad. Shouldn't they now be encouraged, like Neil, to turn their hand at entrepreneurship?

2) Local talent. This goes almost without saying (but I'll say it anyway, lest some people think I missed out on it). What OriginalCodeWeavers has shown is that the talent can be built from within Dumaguete, given the right learning environment and the right resources.

3) Industry exposure. Academic learning is one thing, but nothing beats the confidence of having completed real projects for paying customers. In this regard, it was quite fortunate that the key developers had exposure under Rolf Reierskog's company. This exposure they obtained without having to leave Dumaguete.

Extending this argument, it becomes important for the local universities to establish extension programs by which their graduates can find initial employment with real companies. Not just an OJT program, mind you, because these lack the seriousness of a real work environment; nor unpaid work for school system projects, because this is just academic inbreeding. Real work with real responsibilities.

4) Broadband. Without a doubt, broadband links are making this homegrown outsourcing business possible. Without fast connections, OriginalCodeWeavers would find it difficult to send their work to clients or upload them to servers. Broadband links also makes it possible for the developers to access the tons of material on the Internet so they can upgrade their skills.

There are other factors but these are top of mind at the moment. Take these factors together and apply them to another skill category that can be done remotely, let's say accounting, editing, graphics, or photography. It could work as well.

Now think of the possibilities.

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