5 Out-of- the-Ordinary Outsourcing Trends
Outsourcing exists on a fairly simple premise: If you can do something, there must be someone else out there capable of performing that same task--only cheaper. With VoIP and the internet, almost anything can be outsourced with some time and consideration.
We've found five unusual trends in outsourcing, all of which are likely to become the norm. Outsourcing is poised to grow exponentially as more entrepreneurial minds check out the tasks on the world's to-do list and figure out who can best provide those services for the least amount of money.
1. Getting personal. Outsourcing usually brings to mind business tasks, whether that means customer-service calls offshored to India or data-entry work farmed out to a virtual assistant. But why leave it at that? Why not outsource the design of your personal website, the building of your deck or reservations for your vacation?
DoMyStuff.com is a stateside service that allows people to put their tasks up for bid--anything from raking leaves to installing software. "Right now, this idea is really in its infancy," says David Davin, COO and co-founder of DoMyStuff. "But this is where the internet has been heading all along. We all have specialized skills. The internet brings us to one place where we can exchange those skills."
The p-to-p offshoring industry is just beginning, but research firm Evalueserve predicts that by 2015, consumer and small-business offshored services will grow to more than $2 billion, from only $250 million in 2006.
2. Outsourcing the outsourcing. With success comes competition. While India is synonymous with outsourcing, it's also facing competition from other nations looking for a piece of the pie.
India's economy is in an upswing, and wages are rising quickly. According to a report by Gartner, Indian software engineers will be earning 40 to 50 percent of Silicon Valley wages next year, and the difference will continue to diminish, as will the savings American companies get from outsourcing. At the same time, other countries are looking to India as a model of economic growth. A recent trade event in New York City, OutsourceWorld, boasted representatives from nations as diverse as Mauritius, Costa Rica, Canada, Malaysia, Romania, Malta and the Ukraine.
Indian outsourcing firms are preemptively opening offices all over the world to compete. Infosys, a $3.1 billion leading provider of outsourced services, has 75,000 employees in India, but also has offices in several countries, including Mexico, the Czech Republic, Thailand, China, Poland and the Philippines.
It's quite likely that the next time you outsource a task to India, the person actually completing that work may live in another country--and you'll probably never realize it.
3. Tutoring a world away. Tutoring can be expensive, but parents will pay to help get their kids into the best college--a goal that's fueling the $4.5 billion tutoring industry at a 12- to 15-percent growth rate, according to Eduventures, an education research firm. But not all parents can afford the hourly rates at centers like Sylvan. So they're turning to services like TutorVista, an online tutoring service based in Bangalore, India.
Founded by Krishnan Ganesh, the service offers a $99 per month flat rate for tutoring; kids communicate with their Indian tutors via voice chat, IM and a digital tablet. Ganesh has received $15 million in venture funding and hired U.S. tutoring industry vet John Stuppy--Sylvan, The Princeton Review and Educational Testing Service--as his company's president. As of September, TutorVista had attracted 10,000 subscribers in the U.S. alone and was planning on doubling its staff of 600 tutors.
4. Automating the drive-thru. When you place your burger order at a drive-thru speaker, you expect that the person taking your order will also be taking your money at the window in about 30 seconds. Not so with Exit 41's solution. To speed things up, the company has call-center employees take orders using VoIP; the orders are then sent real-time to a monitor in the kitchen so that in the few seconds it takes you to reach the window, your steaming food is awaiting your arrival.
In Lexington, Kentucky, a Wendy's master franchisee has installed the system in 16 stores and acts as a call center for other Wendy's franchises on the East Coast. One high-volume store has shaved off five seconds from order time and doubled its capacity by adding a second drive-thru lane.
Joe Gagnon, CEO of the Andover, Massachusetts-based firm, says he believes Exit 41's solution will become more common. Not only does it help increase drive-thru capacity, but it also allows for the use of operators in less-expensive areas--for example, a state with a lower minimum wage or even Mexico.
5. Power from the people. Crowdsourcing takes a task and unleashes it to the world. Think Wikipedia, the by-popular-vote T-shirt designs on Threadless.com, or Amazon's Mechanical Turk service, in which people take on fairly simple chores, such as summarizing a paragraph of text, for pennies a task. Google cleverly crowdsourced image tagging by turning it into a game, bypassing the need to pay for the task.
"Most of the successful crowdsourcing models are very much like Wikipedia in that they have a really vibrant community that has sprung up that enthusiastically, passionately pursues this as a hobby," says Jeff Howe, the Wired magazine contributing editor who coined the term in a 2006 article. "It's not like there's a crowd ready to do any old work. It has to be something that makes them happy."