Why Cost Effectively Hiring Top Talent is a Winning Strategy

BBM in Indonesia paid $207 million to buy the Blackberry Messenger business from Blackberry, along with its 60 million active users in Indonesia. This came along with the right to use and re-engineer a large Canadian legacy system of servers and software.  BBM needed to bring this system into the modern era on iOS and Android smartphones with a modern backend system. At the same time they needed to fight in a highly competitive race for market share.

They brought in top engineering leadership from Pivotal Labs in Singapore. They hired a large team of the best engineers in Jakarta and Singapore. Then they discovered East Agile’s team in Vietnam. They found we followed their ideal eXtreme Programming engineering practices. And that we had a supremely talented team. We could build reliably with solid automated test coverage built using test driven development, while dependably applying top engineering practices with paired programming, and adapting to highly dynamic requirements using iterative business value prioritized planning.

The 2017 GDP Per Capita in Indonesia is $3,817, vs. $1,914 in India, $2,303 in Vietnam, and $59,792 in the United States. Indonesia is of similar wealth to India and Vietnam, and has vastly lower general levels of wages than the United States. And with a population of 262 million, Indonesia has a vast pool of talented people to draw upon.

With this background in mind, it is very telling that Indonesian-owned BBM chose to expand their engineering team through East Agile in Vietnam rather than hire more locally. They started out with a pilot engagement that involved a half dozen engineers from East Agile. They got to know them through three weeks onsite. The BBM engineering leads were excited about working with our talented engineers. But their CEO was not convinced we were not just a more expensive version of the same thing they could get elsewhere. Then after a few more weeks working with the team, it was clear to everyone at BBM that despite being their most expensive hiring option, East Agile was incredibly cost effective.  BBM wanted more. As many as East Agile could supply. Their CEO started to talk to the East Agile CEO pressing for as many engineers as possible. That number grew to more than 40, working from three East Agile offices in Vietnam. And the team continued to grow, BBM stopped working with a lower cost outsourced team in India once their lower rates started to look less cost effective.

BBM paid East Agile a volume discounted rate for developers which still amounted to a high rate for Asia.  As an established local firm, they know how to hire locally for less. And they had worked with a large Indian outsourcer that charged less for their developers. So why would they start a new engagement at a higher price? Why would they expand this engagement without limit? Why would they not work with any of countless firms offering “top” talent at a fraction of East Agile’s headline price?  The reason is that professional engineers, and business leaders, know that the path to success does not come from trimming costs to the bone. That is a strategy for businesses in declining industries. For growing new businesses, the key to success is to quickly and reliably build new technology to stay ahead of agressive competitors while not risking crippling engineering failures.  When explaining an engineering failure to a Board of Directors, a CTO gains very little forgiveness by pointing out how much money has been saved by using lower cost engineering options.

Note:  All amounts in US Dollars.

REF: 

https://seekingalpha.com/article/4136972-bbm-consumer-another-ace-blackberrys-sleeve

https://jakartaglobe.id/business/emtek-taps-blackberry-messenger-207-5m-deal/