The rapidly building wave of online outsourcing and crowdsourcing

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The Age today has an interesting article titled Outsourcing on steroids that looks at the array of online technologies that are enabling the outsourcing of small tasks and the crowdsourcing of design, innovation, and other key business functions.

I’ve noticed that in just the last few weeks mainstream media coverage of online service exchanges and crowdsourcing tools is picking up. As the article in the The Age concludes, “it’s certain crowd sourcing is a key business trend for the future”. The

The article quotes me in two different sections:

Although odesk and similar sites such as elance.com are known for being a meeting place where businesses can access very low cost services, crowd sourcing is not just about finding the cheapest service provider possible.

Futurist Ross Dawson says: “Online services exchanges are places where anyone anywhere can get people to perform services; it’s about the development of a global talent economy. Some services are commoditised – you might want someone to count the number of tennis balls in a photo for the lowest price possible. But they also allow you to find the best person for the job and price isn’t always the primary factor why you hire someone, sometimes it’s more about finding talented people. I use odesk and the last person I hired wasn’t in Egypt or Latvia he was in New York.”

This idea of how best to tap the most talented – rather than the cheapest – professionals in the global market is the subject of my next book. I’ll be writing a lot more about this on my blog.

Later in the article:

To date, there has not been a significant uptake of crowd sourcing by large Australian organisations. But Ross Dawson says in the future this will change. “It offers large organisations extraordinary potential and opportunities to get tasks done efficiently.

A good example is under-resourced marketing departments that want to outsource tasks and engage people through online services exchanges.”

But what’s holding this back, says Dawson, are the required skills within large organisations to access the plethora of talent available through online services exchanges. “odesk is hard work. You really need to know how to pick the right supplier to be able to use it effectively,” he says.

Another barrier to large organisations using crowd sourcing is the grey area around the copyright related to creative services accessed through these sites.

If for example a large organisation sources a logo through a site like odesk or Australian creative crowd sourcing portal 99designs.com it’s very difficult to ensure the company owns outright the rights to the logo.

[NOTE: I didn’t say that and I don’t agree on this.]

“But the biggest issue with crowd sourcing,” says Dawson, “is the cost of co-ordinating a large number of suppliers globally. Big companies are more likely to go to a [local] design firm in Surry Hills, who will then crowd source the work and project manage the job. I think we’ll see more businesses on-selling crowd-sourced work.

There’s a real role for the Australian economy to project manage this sort of work. The work might be done in Indochina, but a domestic firm will handle the client interface role with the Australian organisation that has outsourced the work.

The benefit for the client is that they are dealing with a supplier that’s culturally similar, has knowledge of Australian business practices and has the skills to bring the whole project together.”

This has been a key theme I have been banging on about for many years now (for example in this article that appeared in The Bulletin in 2005 and discussing India’s role in project managing outsourcing in China in 2002). In a global connected economy, one of the most valuable emerging roles is that of acting as a relationship and project co-ordinator, finding and bringing together the best resources to deliver work to clients.

That is already been done by many developed world service providers. This role will continue to grow. In fact, these ideas tie in very neatly with my blog post yesterday about co-creation among creative service providers – this is about bringing together talent in novel ways. Challenging, but the wave of the future.