Contributors

Cloudsourcing Is Not Just Pie in the Sky

On-demand BPO services evolve to a new height of scalability, flexibility in this virtual sourcing supply chain.
By Atul Vashistha
 
It’s been more than a decade since corporations started leveraging outsourcing to better manage capacity, costs, quality, risk, and speed to market. From offshoring to managed services, there has been a dramatic evolution in companies’ thinking about outsourcing.
 
Today, many corporations are looking beyond back-office, labor-intensive tasks to outsource more complex business processes, from investment and pricing analytics to inventory management to aircraft engine maintenance forecasting. It is no longer a debate as to whether to outsource but rather what functions can be outsourced. I often hear about companies’ abilities to achieve cost and/or capacity advantages, and yet many are still not satisfied.
 
It is not hard to understand why the question of value is still raised when you consider that today’s outsourcing models have some inherent limitations that reduce the overall gains: Low worker retention, lack of control and visibility for clients, and long, inflexible agreements to cover execution and investment risks for both parties. Few business “futurists” or industry pundits would argue that the popularity of social networking, collaboration tools, and the pervasiveness of web-based applications have given corporations greater visibility, control, and speed than ever before. We have become accustomed to “always on” services and give little thought to the back-end processes that deliver those applications to our laptop. It is what many people today refer to as “cloud computing.” I believe there is a lot of value in an outsourcing model that borrows a page from cloud computing: On-demand, pay-as-you-go, unbound by geographic constraints, and where tasks are assigned to a team of distributed workers. I call this next phase in outsourcing, “cloudsourcing.”
 
Cloudsourcing combines on-demand business process outsourcing (BPO) with crowdsourcing technologies to enable companies to purchase services on-demand through a pay-per-use model. This concept allows corporations to launch new business process work types and scale and innovate in Internet time while maintaining real-time visibility and control. Further, it enables corporations to have immediate access to the right worker with the right skill at the appropriate price point, regardless of location.
 
With cloudsourcing, Friedman’s “flat world” becomes more visible, and the creation of an on-demand workforce can be realized. Imagine being able to hire what skills you want when you want and for how long you want! This not only converts your fixed costs to a variable structure but also enables you to launch new programs in Internet speed. Cloudsourcing also enables BPOs and individuals who have particular skills or expertise new avenues.
 
So when will cloudsourcing be a reality? Interestingly, there are examples of work being deployed in this model today. Take for instance, LiveOps, a Silicon Valley technology company run by Maynard Webb, the former COO of eBay. It cloudsources through a virtual workforce of more than 20,000 independent contractors and recently launched a new work marketplace, LiveWork, as a platform for on-demand BPO. While the company provides on-demand contact center services to a wide range of businesses, the impact of cloudsourcing is best illustrated by the services it provides with natural disaster emergency relief efforts where fast response to the “unpredictable” is the norm.
 
When Hurricane Katrina struck in 2005, a toll-free communications center 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 three hours, LiveOps launched a call center with more than 300 independent, home-based agents ready to help reunite victims of Hurricane Katrina with family members. The virtual call center, with no fixed investment in buildings or technology infrastructure, was established with skilled workers in hours and subsequently wound down when work was done.
 
Consider what all of this may mean for your business or industry—a retailer during its high season being able to scale to meet call volumes; a technology company needing to rapidly staff up its email customer support team in response to a new product release; or a gaming company needing an on-demand workforce to augment their existing team to help moderate their online chatrooms. The possibilities are huge and will lead to more work types being outsourced.
 
In the summer of 2007, I wrote about the futurized corporation using a virtualized supply chain. This vision is cloudsourcing at its best. I believe with this new trend, companies now may be able to achieve significant gains by taking advantage of an on-demand BPO model that increases velocity and agility.
 
Atul Vashistha is chairman and CEO at neoIT, a management consultancy focused on offshore and global sourcing. He can be reached at atul@neoIT.com.

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