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Outsourcing Sites: Threat or Opportunity?

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We’ve looked at freelance outsourcing and crowdsourcing sites in the past – places like 99 Designs for graphics work or Elance for programming and other fields. Generally speaking, it seems that most web workers in our audience view these sites as a threat, encouraging rate cutting and spec work (depending on the site).

But it seems unlikely that the trend of global outsourcing is going to go away any time soon, or that sites which enable it will go out of business. As a result, it’s probably smart for web workers to learn what’s out there, and to figure out how to deal with it. A pair of recent columns from Dan Appleman survey the programming side of this trend. Appleman’s conclusion flies in the face of the accepted wisdom: though he sees the greatest benefit to businesses, he adds “but U.S. workers who are smart, professional and keep their eyes open can find good opportunities as well.”

Appleman’s keys to potential success: understand what you’re bidding on, learn how the system works, be realistic with our pricing, and be patient.

Of course, there are other ways to deal with global outsourcing besides being part of it. Savvy web workers can continue to work on differentiating themselves on skills from the vast global labor pool, and also on marketing those skills. It’s also worth thinking about whether there’s money to be made in being a middleman: taking a job at high rates and farming some of it out to distant freelancers at lower rates, becoming a global project manager.

5 Responses to “Outsourcing Sites: Threat or Opportunity?”

  1. Global outsourcing won’t go away because it’s cost optimized.

    The quality of the services is measured by the project plan, communication and consulting.

    As for the small oursourcing websites that recently appeared… they’re meant to increase the number of users of this (great) service; I do intend using them for outsourcing work, but I know for sure my clients cannot come from such places.


  2. To add to Nick’s comment above, ki work recognises that to thrive in the outsourcing business, there is a need for steady and high quality deal flow. So unlike most freelancing sites, ki work’s focus is on generating BPO deals in the $50k – $500k range. That enables a team leader “Expert” to develop a serious online business that provides a sustainable and high quality alternative to conventional employment. A current project for example is the requirement for 50 data entry agents to check and update Bills of Lading.

    Michael Wolff – CEO

  3. jonpeltier

    These outsourcing sites are a nonstarter as far as I can tell Nobody is taking work from me. The projects offered are not the kind of stuff I like to do, and anyone who wants a project done for a dollar an hour is not someone I want to workk with.

  4. As a professional writer I’ve been put off using sites such as Elance because they either tend to offer very low rates of pay or time-consuming pitch processes. But they do represent a trend which can only be boosted by the global recession. Any work which can be carried out online is capable of being outsourced to wherever it can be completed with the optimum combination of price and quality. Geography doesn’t matter as long as the knowledge worker has access to the internet it doesn’t matter where they are.

    The article above suggests becoming a “middleman” which clearly makes sense. The problem is there’s not a ready mechanism for doing this through most of the freelance marketplaces.

    I’ve been the blog editor for ki work ( a few months. I joined because the people behind ki work seemed to be developing a real alternative to existing freelance marketplaces. The idea is to create a collaborative platform for virtual businesses to compete for projects. By including social networking features it is possible for knowledge workers to establish the sort of relationships necessary to complete complex projects.

    The problem with existing models is that they’re designed to recruit individuals on a relatively short-term basis. Not only does the recruitment process then have to be repeated for every project, but so does the team building process. It’s not the most effective way of running a business.

    It may be that ki work doesn’t prove to have the winning model, but I believe that there is enormous potential in the flexibility of virtual business process outsourcing that harnesses the power of an online marketplace combined with social networking or Web 2.0. At ki work we call it “collaborative capitalism”.

  5. Good point in your last para about farming some parts of a job out to cheaper freelancers. It means you get to keep “ownership” of the work and should also still make money on it. I guess you’d want to check that the contract with your freelancer covers what happens in the event that their work is not up to scratch.