It’s been over a decade since corporations started leveraging outsourcing to better manage capacity, costs, quality, risk and speed to market. What started as giving mundane tasks to an external supplier locally has evolved to partners in far flung locations such as India and China running key processes.
Initially only large corporations such as American Express, Texas Instruments and GE leveraged this opportunity, but now we see even small and medium enterprises taking advantage of this option. There has already been a dramatic evolution in corporations’ thinking about outsourcing. But with the competition evolving, the question for today’s corporation nevertheless remains: “Which functions should be outsourced?
Today’s corporations do think beyond back-office, labour-intensive tasks to outsource complex business processes – from investment and pricing analytics to inventory management to aircraft engine maintenance forecasting.
Corporations are challenging existing business models as they seek ways to speed innovation, focus on their core competencies, and scale to capitalise on opportunities and outpace competitors. Then, why are they still not realising significant gains?
Changes in globalization, outsourcing and technology are driving a dynamic, new work model that will have transformational impact within corporations across all industries. Broadband, travel and global trade has made talent in locations from Bangalore to Idaho available to us. This has also given rise to freelancers, virtual teams and telecommuting.
Many corporations such as Mitsubishi, Citi and John Deere have now leveraged these work models for over a decade now. While many corporations started their outsourcing in IT related projects, they soon expanded it to their back office functions and then to more complex client-facing functions.
The acceptance of business process outsourcing has resulted in corporations outsourcing more complex work to trusted service providers, including legal services, research services, pricing analytics and sales support.
However, while companies have been able to achieve cost and capacity advantages, traditional outsourcing approaches continue to be plagued by low worker retention, lack of control and visibility for clients, long transition periods, slow ramp-up and long, inflexible agreements to cover execution and investment risks for both parties.
Recently, however, the internet has given rise to a new capability with respect to how corporations hire, train, and manage their workforce – whether they are in-house employees or outsourcing partners. While known to some by many different terms, I prefer to use term to explain this concept.
Cloudsourcing combines business process outsourcing with crowdsourcing technologies to enable companies to purchase quality BPO services on-demand through a pay-per-use basis. This capability is possible because of stitching together collaboration tools, virtual workforce and work flow software.
Cloudsourcing allows corporations to launch new business process work types, scale and innovate in Internet time and maintain real-time visibility and control to minimise risk. Cloudsourcing enables corporations to have immediate access to the right worker, with the right skill, at the appropriate price point and regardless of location.
The popularity of social networking, collaboration tools and the pervasiveness of Web-based applications from email to CRM are transforming how corporations get work done with greater visibility, control, and speed by moving the business process not to the different geographical location, but outsourcing the process, through an ‘on-demand model’ to the ‘cloud’.
Let me illustrate by using an example of how a leading financial news site publishes quarterly earnings calls. This task requires a workforce for one to two weeks per quarter, where a team of one hundred transcriptionists are rapidly scaled up to transcribe thousands of earnings calls, then scaled down at the end of each quarter. Having full-time, in-house employees is not cost effective and the solution is this new capability, an on-demand BPO: Cloudsourcing.
The world is truly flat as Thomas Friedman presented so vividly in his famous book. Cloudsourcing is making “The Flat World” a more visible and truly on-demand possibility. Imagine being able to hire what skills you want, when you want and for how long you want and still get it at the right price!
This is not only converting your fixed costs to a variable structure but also enables you to launch new programmes in internet speed, broadband, of course! Cloudsourcing also enables BPOs and individuals who have particular skills or expertise, from data entry, transcription, lead generation, legal, research, content writing and others to offer their services on demand.
Another great example comes from a Silicon Valley based company, LiveOps, that is leveraging Cloudsourcing through a team of over 20,000 virtual team members. LiveOps has seized on this opportunity and made this a reality today. Not only are they benefiting corporations but they are also being leveraged in ways not thought of before.
When Hurricane Katrina hit the Gulf Coast of the U.S. in 2005, a toll-free communications centre was urgently needed to put victims in touch with their families. Every other outsourcer that was approached to provide communications services declined to take on the project, because they couldn’t mobilize agents fast enough.
Within 3 hours, LiveOps launched a call centre with over 300 independent agents ready to help reunite victims of Hurricane Katrina with their family members.
Cloudsourcing is indeed enabling corporations to futurize their businesses and take advantage of on-demand BPO to increase velocity and agility – thus create a sustainable competitive advantage.
This article originally appeared on “The Outsourcing“