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Recession Proof Economy – People to people outsourcing

india Updated: Nov 25, 2008 18:25 IST
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Layoffs, job cuts, economic growth slowing, salary cuts and such is life under recession. If media and analysts are to be believed then the economic conditions are getting from the frying pan into the fire. An eternal optimist I am. Even in the time of the Great Depression there must have been few people who made loads of money. Suppose even if the world is coming to an end even then there will be at least 0.00001% of the population who have it all, economic security, spending power and an absolutely great life. Life in times of recession isn’t that bad if you really look for alternate options. It could be an opportunity that could not only save costs but also help you re-evaluate your corporate strategy, no matter what size of business you have.

Outsourcing of a different kind
Let’s talk from a SME or a startup level. For an SME costs are very crucial. Even a small expense can be killing. Now let’s say you have a design company and you bag an order for 3D modeling. That’s absolutely great news but you are not sure if it would be viable to actually recruit 3D animation experts. The solution is simple.

You perhaps heard of PPO, ‘Person to Person Outsourcing’ and how it helps individual Entrepreneur or a Small Medium business to outsource to achieve their own business efficiency.

Work exchanges like www.limeexchange.com help you “outsource, collaborate and connect”. For buyers and service providers it provides a platform to communicate, collaborate and get work done. What is value for buyer is money earned without any major fringe cuts for the service provider in this win-win economic relationship.

Years ago what was started as P2P (peer to peer) remember Limewire, we all have probably used it at some point of time for downloading music, videos and more. Peer to peer in its new avatar is people to people outsourcing.

Companies like rentacoder.com, elance.com and many others have similar models for years where you can tap into an absolutely great talent pool of freelancers and service providers ranging from virtual assistants, to designers, to programmers, to just about anything that can be digitally delivered at prices you will be absolutely which are simply unbelievable. Sometimes less than 200% of what it would cost in-house.

People to people outsourcing
According to a report by Evalueserve, in the overall multi-billion$ outsourcing industry PPO currently still accounts for $250 Million dollars and with the rapid strides in Globalization because of growth of internet penetration Technology advancement, Rise of Consumer Internet & Web 2.0); PPO is touted to become a $2 billion industry by 2015, if not earlier.

India rising was associated with BPO’s, then as we progressed in the knowledge economy further came the rise of KPO’s. In an era of salary cuts and economic bad news the PPO (People to people outsourcing) is only going to get bigger.

Take the case of Lime Exchange. According to George Searle CEO Limelabs “The entire execution right from product conceptualization, product management, to deployment, sales, marketing and customer relationship management is managed out of India.”

Also noteworthy is while companies are talking about job cuts, PPO space is actually expanding. Says George “We have finalized a new facility, which would have the ability to house 250 employees. This facility would be operational by the end of this year, which will be the precursor for our expansion plans in India”

According to an Evalueserve Report there are over 5,00,000 service providers, freelancers and vendors providing their services through these exchanges. Says the report the countries active in the PPO space are India, Philippines, Russia, Ukraine, Romania, China, Vietnam, even Thailand & Sri Lanka. Interestingly, out of these approximately 30% are from India and PPO generates revenue worth $65 million annually. It is expected to touch $500 million by 2015 for India, which quantifies into an eight-fold increase in nine years at a cumulative growth rate of 26%.

IT Giants use Individual Power
If PPO sounds small business centric take the case of IT giants. Aren’t they using a similar model? The Open Source community has been in the people to people space for years. In fact they were so effective that they could actually create an operating system to rival the world’s biggest company Microsoft without any organized setup. Whereas Microsoft and other IT giants spend hundreds of millions on research and testing, the open source community managed it all by them. Google for years has been creating platforms like Google Gears amongst others and using individual talent to build applications. On the content side applications like Google Maps are almost entirely fed by individual talent. One of the best CMS and blogging platforms to have ever been made, Wordpress, is also a result of individual effort of a bunch of programmers.

The Last Word
A recession proof organization sounds great and it probably is a possibility with the right outsourcing strategy. When wisdom from the right source flows into the right job it not only means a win-win economic relationship value for buyer for but also product delivery with passion.

(Puneet Mehrotra writes on technology. www.cyberzest.com email puneet@cyberzest.com )