Monday, June 6, 2011

Smallsourcing - the new 'Avatar' of Outsourcing !

The article “Strategic sourcing” provides a good insight into strategies of larger corporations but does not elaborate much on the sourcing needs of small – mid size companies. With the national unemployment levels in the US closing in on 10%, talking about “Outsourcing” has become a touchy topic in the present economy. With more and more US companies outsourcing jobs including Hewlett-Packard Co., CKE Restaurants Inc. and Hilton Worldwide jumping recently in the same boat, a small part of this business is flourishing in the US.

If the statistics of an online contracting company ODESK, which connects people in need of skilled temporary work with employees, are to be believed –the number of hours worked on ODesk projects by contractors has risen threefold over the past 12 months. The growth of such companies underlines the fact that the world has become a freelance – outsourced economy.

There are a few factors helping this growth. With more and more jobs coming under the axe, small and mid-size companies have various technological needs like building Web sites, databases or crafting user interfaces, which are being met by private contractors. As the Internet has become more of a household utility everywhere, it is easier to assemble and manage a remote workforce.

Smallsourcing is the new buzz word which is gathering a lot of attention in the recession hit economy. It reflects a truly global nature of the workforce and the work. Smallsourcing companies like oDesk have contractors available from dozens of countries, including China, Singapore, Russia, and Bolivia. At the same time, work is being outsourced to the U.S. from the U.K., Canada, Australia, Spain, Saudi Arabia, and the Mid East. A pleasant surprise is : While the single largest percentage of oDesk software work goes to contractors in India, the U.S. ranks No. 3. And the number of hours worked in the U.S. is growing at a much faster pace than for other countries. With the per hour wage differences between the two countries being only around $6, a lot of companies are preferring to outsource projects within US. The benefits are not only an ease of communication, but also a higher quality product.

Another variant of Smallsourcing is Crowdsourcing. Amazon’s mechanical turk is a good example of how a job which is still complicated for a computer to perform, can be done by a coordinated crowd. Sites like the online design service, CrowdSPRING allow customers to submit a request for work and have the community respond with proposals and ideas. Companies such as Utest which are looking at users for testing software, games and websites have found crowdsourcing communities quite beneficial as well.

Whether these new variants of outsourcing stand the test of time is the next big question.

References :-

http://www.businessweek.com/technology/content/jul2009/tc20090731_382752.htm

http://www.isa.org/InTechTemplate.cfm?Section=Columns&template=/ContentManagement/ContentDisplay.cfm&ContentID=78949

http://www.scalableworkforce.com/crowdsourcing-history-background/crowdsourcing-examples-in-business/

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