Managed Crowdsourcing for the Enterprise: the Growth of Private Talent Clouds

By | May 21, 2014

Service marketplaces are now offering managed crowdsourcing designed for the enterprise, providing access to a pre-selected crowd through a private web-based interface.

One of the over-arching themes of crowdsourcing is its slow march towards the mainstream. One aspect of this is penetration into the larger enterprise, with crowdsourcing a technique embedded into key business processes.

handshakeIt’s safe to say that progress has been patchy. For example crowdsourcing user testing is now gaining ground among larger companies, but service marketplaces such as oDesk and Freelancer.com are still dominated by smaller companies and start-ups.  Where there is use by larger companies it is often sporadic or ad-hoc, limited to one department or division, or the result of an individual dipping their toe in the water.

The hesitation of the enterprise

It’s a shame that more global companies don’t use service marketplaces as the crowd provides a mind-boggling range of services which could be utilised.

In practice some of the reasons for the reticence of larger organisation to use these platforms lies in the processes put in place by enterprise support functions to minimise risks and reduce costs. Measures involving procurement departments and HR functions often mean that there are approval steps to navigate, lists of preferred suppliers to adhere to and pre-vetting of candidates to undertake.

This effectively puts the kibosh on using a platform like Elance as there are simply too many hurdles to jump over and it becomes impractical.

Private talent clouds

Some of the service marketplaces have tried to meet the needs of the enterprise by providing a managed service which involves sourcing a crowd to carry out a particular type of task, and then providing an interface to manage them.

In effect this creates what Elance has marketed as a “private talent cloud.”

In providing this the service marketplace can meet the particular needs of the organisation by:

  • Sourcing the right people to a specification provided by the company
  • Vet the crowed accordingly and carry out any risk-related steps such as signing a Non-Disclosure Agreement
  • Customising and brand the interface if necessary (although customisation is likely to be more expensive)
  • Keep on adding more providers to the crowd to meet need
  • Providing access to named individuals within the organisation
  • Establish a crowd large enough to provide an attractive on-demand model for a large enterprise

Processes

Private talent clouds provide an opportunity for the enterprise to tap a freelance crowd in a model which is a little closer to traditional outsourcing. It can work effectively for projects, but also for ongoing processes where either the work can be broken down into smaller repeatable tasks or where a diverse population of providers is needed, for example in translation.

Typical processes which larger organisations have processed in this way are:

  • Translating product pages into different languages
  • Writing, for example managing a global network of bloggers
  • Tagging photos and webpages
  • Checking photos for suitability, for example removing pornographic images

The providers

This potentially lucrative corner of the service marketplaces has not been widely publicised, but oDesk have been providing these “enterprise services” to some very large companies for a number of years., particularly for technology companies.

It is not surprising that Elance followed suit with its offering, although now with the merger of Elance and oDesk’s operations it is hard to ascertain which direction offerings might take. Although oDesk is no longer mentioning on its website some of the impressive customers it has had in the past, we believe the combined size of the new company gives it an excellent opportunity to ramp up offerings focused on the enterprise.

Other players

Other players include new entrants like Work Market which specifically targets the enterprise to source a freelance-based workforce and provide the necessary platform to manage operations and relationships.

There is also some crossover with CrowdFlower, who provide a platform for managed crowdsourcing usually for microtasks.

Meanwhile Freelancer.com has not entered this corner of the market, still branding itself as the “#1 resource for small business and entrepreneurs.”   Appirio, an IT services company which acquired the software development marketplace Topcoder.com,  is well placed to provide these types of services, but has still to play its hand.

What next?

It will be interesting to see whether private talent clouds using a crowd of freelancers will take off in larger companies. We would not be surprised to see more medium-sized companies using these types of services, although risk-averse global companies may be slower to take-up the opportunity.

Platforms like Elance may also start to see companies with an existing distributed workforce migrate their employees over to the platform in order to help manage processes such as recording time or even payment.

As global web-based marketing and services are clearly not going to be going away any time soon, the type of work which private talent clouds can facilitate will continue to rise. If service marketplaces offer an easy to use, flexible and cost-effective model then enterprises will start to crowdsource processes in this way.

What do you think? Have you had experience of using a private talent cloud? Are we underestimating existing use in larger enterprises? Are there other factors which might limit take-up?  We’d love to hear your thoughts and comments.

  • Chris Trebour

    We have been developing software for a few years now using a private talent cloud and Managed Crowdsourcing and it’s always amazing to see the projects come together for our clients. The results have been extremely impressive in quality, speed and cost.

  • http://5bux.net Freelancers Online

    So far managed crowd sourcing has not been considered as an option for enterprises. But days are not far away. Hiring professionals from Freelenacing Marketplaces are now common for individuals and small business owners, We are just waiting to see the enterprise paradigm shift.

  • http://www.fukton.com/ fukton.com

    We have seen significant M&A activity in the Freelance marketplace industry which has lowered competition. The giants like freelancer, odesk and elance spend millions on advertising and Google Adwords. Porter’s 5Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are:Supplier Power, Buyer Power, Competitive Rivalry, Threat of Substitution, Threat of New Entry. It seems that unlike the principles of Honeybee Leadership the incumbents are trying to use economies of scale to squeeze extra profits through size and reduce the level of innovation and competition which would be in the best interests of freelancers who need constant innovation and ways to engage and grow.

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