Understanding the client process, transitioning them to their own centers, optimizing them and delivering services on an ongoing basis at predictable cost, quality and reliability is what defines the traditional BPM firms. The processes suited for such a model were HR, finance and accounting, procurement, supply chain management etc. However, with the growing digital content, advancement in technology infrastructure and global collaboration for resource pooling has given birth to a new wave of outsourcing. This combination of human cloud backed by technology infrastructure cloud is best alternative to certain task oriented activities that are very repeatable and easily dis-aggregatable. This is well suited for the services where there is fluctuating and cyclic demand, or projects that are outcome based and require diverse skills set.
This new wave of outsourcing has three main operating models each having its own risks and rewards.
In these models, first, the needs and business objectives of the client (such as Google, LinkedIn and Microsoft) are understood. Once a project is initiated with a client, it is framed and loaded onto a proprietary platform (SamaHub, MTurk) which breaks it into small, digital tasks and delivers them to the partner centers around the world. The firms also work with the delivery center partners to recruit, hire and train people from various parts of world and primarily the marginalized youth and woman. Once they finish training and demonstrate proficiency on trial projects, workers begin performing tasks for client projects, and in turn begin to earn salaries that are better than the locally available jobs. Some of the biggest advantages of this model are standardized process, labor on demand, diverse skill sets, low investment from clients and an agile structure it provides to the client.
Currently ISSPs in India and across the globe offer services like content generation, digitization, map tagging, social media monitoring, sales and marketing support, research and development, document translation services, business analytics and data management. The pricing models offer flexible, results-based pricing that is highly competitive to traditional business process outsourcing providers. Clients typically pay per task and prices vary depending on the complexity and volume of work. ISSPs in India currently charge $8-9 per day for image tagging, for transcription services it falls in the range of $12-14 per day, for data set enrichment and data mining it is around $12-14 per day and for content generation/review it can be as high as $20+ per day.
Facebook has also used these services to create different language versions of its site, while google and yahoo use these to tag their maps and provide location based content. Ancestry.com uses it extensively for digitization and indexing of genealogical records.
Some of these models have also has funding from world-renowned VCs and grantors including Rockefeller Foundation, The MasterCard Foundation, Ford Foundation, The Mulago Foundation, Peery Foundation, eBay Foundation, Google.org, The California Endowment, The Cisco Foundation, and the U.S. Department of State. Samasource has shown a remarkable success in bringing down its Operating loss, from approx. ($660,000) in 2011 to approx. ($86,000) in 2012.
According to us these new transformative business models are going to be significant subset of BPM industry and change the way industry operates. Buyers need to realign their service strategies to benefit from these new paradigms and traditional players will need to invest in this transformative business model.