The crowd sourcing revolution

Matt Barrie, CEO of freelancer.com proclaimed at last night’s Getting Results from Crowd Sourcing event that “outsourcing and crowd sourcing are revolutionising business”.

This is true and we need to keep in mind revolutions result in some eating brioche while others walk to the guillotine. The question for every business owner should be, is their industry at risk when there’s a global supply of cheap labour at everyone’s fingertips?

SmartCompany covered the pros and cons of crowd sourcing in an earlier article and the interesting thing is many people, including experts and business owners, still confuse crowd sourcing with outsourcing.

Outsourcing is hiring in labour to do the job, there’s nothing really new in this except the internet now allows providers from around the world to bid for work through sites like Freelancer.com, elance and odesk.

Crowd sourcing is where groups of people volunteer their efforts either for free or in the hope they will be selected to do a job such as logo design. Many of these sites rely on free or marginal cost labour with a few exceptions like Yvonne Adele’s Ideas While You Sleep.

One of the points we need to keep in mind with both crowd sourcing and outsourcing is while there are massive savings to be made, there are risks as both require project management skills which are often underrated and undervalued, as anyone who’s built an extension to their house can attest. The big banks found through their outsourcing adventures in the last 15 years that managing your foreign service providers can be expensive, time consuming and not without elements of risk.

As low cost solutions for relatively simple tasks involving no intellectual property, internet outsourcing and crowd sourcing are a good solution for big and small business. It also makes you fear for a lot of local skilled businesses like designers and programmers competing against these low cost countries.

It’s not the solution for everything though and many tasks are best outsourced locally or kept in house.

Another thought is that if we accept we’ve moved to an ideas-based economy, what makes us assume an American, European or Australian idea is any more valuable than an Indian or Chinese idea? So the outsourcing revolution may have some surprises for those of us who think we’ll be untouched by this. Indeed many of the websites and local business advocating outsourcing programs could themselves have competitors from low cost locations.

Regardless of these thoughts the global market is now at your doorstep, even if you don’t compete overseas. The question is, will your industry be going to the guillotine or one of those eating cake as the global outsourcing revolution evolves?

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Paul Wallbank is a writer, speaker and broadcaster on technology issues. He founded national support organisation PC Rescue in 1995 and has spent over 14 years helping businesses get the most from their IT investment. His PC Rescue and IT Queries websites provide free advice to business computer users and his monthly newsletter has over 3,000 subscribers.