Growing oppurtunities for a Freelancer.

EARLY a hundred years ago, American humorist Robert Benchley said the freelance writer is a man who is paid per piece, per word or perhaps. For a long time, freelancing was hardly a career choice in any profession. It offered very poor pay, little professional status and hardly any opportunities for growth. And it remained that way for decades, until the forces of globalisation brought freelancing out from the cooler and put it in mainstream. Today, the powers of Internet and outsourcing have combined to make freelancing a potentially attractive career choice, and still better, an option to exercise freedom and one’s spirit of entrepreneurship.

Freelance outsourcing is spreading like a sail lifted in the headwind. Men and women of all ages are logging onto the Internet at their homes, spending the number of hours they choose and serving customers half the world away in services as varied as web designing, medical transcription, manuscript editing and accounting. India’s rise as a provider of software and business process outsourcing services has helped elevate the image of freelancing at par with regular jobs, but the real push has come from the burgeoning demand for individual skills in capsule form that corporations won’t find it economical to provide.

“I am a big fan of freelance outsourcing and its place especially given the latest developments in Internet, telecom and technology,” says entrepreneur K Ganesh, who was a trendsetter in both call centre and online tutoring businesses that have become thriving trends in India’s outsourcing industry today. He has used freelancers in his start-up companies and believes the trend is set to catch on big time in the years to come.

The last few years have seen several factors coming together to make freelancing more viable than before. The most important change, of course, was the advent of Internet and connectivity at homes. Till not long ago, young mothers were giving up promising careers to take care of their families. Today, most of them still find it difficult to get back to work, but can at least profit from the freelancing trend. Also, globalisation and outsourcing have brought millions of people in India and China to the world’s labour pool, connecting individual service providers in these nations with individual customers in the West, for the first time in such a large way. These factors have also spawned a series of web exchanges dedicated to the job of bringing freelancers and buyers together.

A decade ago, a Harvard Business Review report said freelance outsourcing could take over the world. The setting for that invasion, if one were to happen, has never been more propitious. The talent crunch is getting tighter everyday in many sectors and often, HR managers have to rope in freelance workers to meet short-term demand. HR consultancy Ma Foi maintains a database of such workers who could be called at short notice to work for projects that crop up from its clients. Customers supplement their own headcount with such teams, adopting pay-per-use model. “We know who are the right ones to contact for the job,” says Ma Foi chief operating officer E Balaji.

When the dotcom bubble burst around the turn of the millennium, one of the few online businesses that survived was elance.com, which has fashioned itself as the eBay for services. Similarly, Logoworks, which provides a platform for designers to display their talent and make logos for companies, has been another success story. It was recently acquired by Hewlett-Packard. Experts say the proliferation of online marketplaces for freelance work is one indication that outsourcing is no longer confined to companies and has spread to the individual level.

Freelancing, in fact, is getting more sophisticated than writing assignments and consultancy. There are business advisors who are available to tackle a given issue at a company for a specific period. There are turnaround artists who work only as long as it takes to pull a firm out of morass. There is also the 28:28 model in the oil sector, where geophysicists and engineers work for 28 days and take rest for the next 28. They typically work on one excavation project for about two years and then move on to newer fields. Companies are ever innovating on what all can be freelanced.

While such special projects do exist, most of freelance outsourcing, however, is confined to non-core functions that a company can freely get outsiders to do. “It helps us outsource non-core functions of our business, so that we can concentrate and focus at the things we are best at,” a software businessman says. It helps businesses do away fixed and recurring costs on menial tasks. However, there is a flip side to it too. The old adage that nobody got rich by freelancing is still true. It is extremely difficult to build value in a career, given the fragmented nature of clients and projects that one might work for. It may also not pay in proportion to the hardwork. For companies using these services, on the other hand, managing outsiders is a challenging task. There are intermediaries such as Ma Foi who aggregate freelance labour pool, but still quality control and a grasp on timely delivery can be unpredictably difficult. “I do not support freelancing because all said and done, you need a person to be present in-house to exchange views with other people in the team and also to have a perfect product,” says CEO of ESS Solutions Sanjay Kanth.

Also, freelancing might be suitable for some tasks but not for others. Says Mr Ganesh who now runs an online tutoring service: “For TutorVista, we thought of allowing freelance tutors and becoming a marketplace for trading in tuitions. But we dropped the idea because this concept has failed with other portals. If you dig a little deeper, you will know why it doesn’t work. First, there is the challenge of dis-intermediation. The student and teacher may get connected and do away with intermediary and therefore the commission. The second challenge is quality assurance. The quality of service is intangible, it is not like a product. Determining the quality of service becomes impossible, so there may be a chance that it won’t be worth the money.”

Balaji of Ma Foi says it is the difficulties involved in quality control and resource management that will present entrepreneurial opportunities in freelance outsourcing. But India will have tough competition in this segment. Ireland and Israel are already making solid progress, while eastern European countries and even Pakistan are potential winners.

This would call for a body like Nasscom to take freelance outsourcing under its wing and promote quality. This would help India avoid costly mistakes that its outsourcing companies made in medical transcription and animation, where low-quality work led to virtual blacklisting of Indians. But high-level of flexibility, the freedom to pace one’s career, global scope and convenience will make freelance outsourcing a compelling option for more professionals. And bringing them and their customers on the same platform is going to be an equally compelling business opportunity.

Article Resource:
The article appeared in The Economic Times, Mumbai in one of their successful columns on Entrepreneurship/Start-ups called "Starship Enterprise".

Answering the local call pays.

Infovision’s domestic focus is a winner at a time when the glamour of BPO exports is fading.

STAYING power was what distinguished many successful entrepreneurs of the dotcom era who weathered the bad times and went on to make it big when the internet became a way of business. Till not long ago, Aditya Gupta’s business offering business process services to the domestic market was unfashionable because it did not earn the same kind of handsome profits or tax breaks that a BPO-focused on overseas clients enjoyed. Since then, however, the recession in the US, currency fluctuations and an attractive domestic market have turned many export BPOs looking back at India. This has, at last, vindicated the home-bound model that Mr Gupta’s Infovision has been pursuing.

Mr Gupta started his firm in 1991 doing direct marketing, loyalty programmes and managing data for airlines and hotels. “Telemarketing had not yet started in a big way but computers had started being used,” recollects Gupta. The challenges of the business were quite different from what they are today. The biggest challenge for the business was, for instance, to get 25 phone lines from public sector undertakings like Mahanagar Telephone Nigam. Leadership was not something new to Mr Gupta — his father PP Gupta headed CMC when it was just set up and his grandfather was in the civil services, but entrepreneurship was a bigger leap to take. “I always wanted to have my own business and something to do with technology,” claims Gupta, who started the business after 15 years of working for ICL, the UK-based systems integrator.

People often compare his business model with that of BPOs focused on exports. The business models of the two are quite different — investments in sales and marketing a not very high for a domestic BPO, knowledge of English is not always required, and there are no security issues involved in outsourcing to a location outside the jurisdiction of the country of the client. Also, there is no labour cost arbitrage.

Most of the sales activity for Infovision, for instance, was handled by its senior managers. Only now, is the 11,000-employee strong company setting up a dedicated sales team of around 11 people to target industries and firms that have the potential to be large outsourcers. Mr Gupta refers to an IDC report that estimates the size of the domestic BPO market at Rs 7,000-7500 crore ($ 1.8 billion). Of this about 18% is insourced (done within a group itself and not outsourced to third party vendors). This percentage is expected to go 32% and the overall domestic market to Rs 25,000 crore or $6 billion in some years, asserts Mr Gupta.

Infovision’s transition from a firm doing direct marketing and loyalty programs to a domestic call centre handling some of the big private sector and foreign banks, wellknown food and beverage chains, and pharma companies, happened sometime in 2000. The company lost a major client, which accounted for nearly 80% of its business, in the late 90s following a decision that disallowed airlines from running loyalty programs with travel agents. “This was the first major shock to our business. During those six months to one year we had to re-group and re-focus our entire business. But we learnt we’ve to broadbase our business and not focus on any single client or industry,” reminiscences Gupta.

Luckily for Infovision and Mr Gupta, the telecom boom was just beginning to happen in India. And it got some of its first clients for the call centre business from Bharti Airtel and Microsoft. From here on, it diversified into other clients and industries, including in some unconventional ones like food and beverages and white goods. “You’ll be surprised at the number of calls we get because cell phones have become so pervasive.” While the company initially started as a vendor to handle customer complaints for some clients, it gradually began seeing new business coming in from areas like handling dealers queries. About 20% of its revenues also come from international clients. The sales and marketing for the international business is done through a partner in the US. The decision to stay more focussed on domestic business was a conscious one, says Gupta. “If we had done more international business, we would have to spend much more on sales and marketing. Most of exportoriented BPOs are backed by large business groups or private equity funds. At our size, we could not do it,” he adds. There are other aspects where Gupta believes in going against popular perception. For instance, he doesn’t believe his business should be organised around industry segments. “That would be restrictive,” he says.

Article Resource:

Author: N Shivapriya is the cheif editor in the Economic Times and the article appeared in one of their successful columns called "Starship Enterprise".