Some Thoughts on How to Outsource Successfully on Elance

A question came my way recently about outsourcing using Elance.com as a means of reducing costs for the client’s video-editing requirements in his business. Elance is an Internet company that makes it possible for people with computer skills anywhere in the world to connect with people who need work done. It’s like a people version of Ebay – you can see the results in the feedback on work done for other clients from each company offering to work for you.

Outsourcing isn’t a new concept. All businesses use contractors for work and the idea is to keep more profits. Everyone knows that American businesses have been outsourcing IT to India and China since the ’90s, to varying levels of success. We’ve all heard customer-support outsourcing debacles, but don’t let those stories keep you from outsourcing. A small business has a great chance of being successful with outsourcing. 

What’s not known is how widespread outsourcing has become for small businesses for projects of every conceivable type of work, from office administration, graphics, web development, creating content, copyediting, SEO, bookkeeping, to software development and media development (such as audio and video editing). Make a visit to Elance.com and do a search for anything you’re interested in, and it’s likely you’ll find a dozen companies willing to bid on your work, regardless of its size.

The point: Big business is not the only one on the path to leveraging the benefits of outsourcing. It’s equally beneficial, if not moreso, to small businesses, but you’ll likely have to learn many of the same lessons that large businesses learned over the last 10 years about cultural sensitivity. You may enjoy a movie called Outsourcing because it’s an interesting story with many cultural insights.

I worked with outsourcing teams at Motorola in the mid-’90s, including setting up teams in India and China and then interfacing with them in a way that we all understood each other well enough to accomplish various project goals. And I’ve worked with a team in the Ukraine and other places in Eastern Europe for smaller projects for my own business. I use Elance periodically for projects, and I’m currently taking bids on a project to write a requirements document for a multimedia-based iPhone application.

So back to the question about reducing costs in a business that needs video editing. I am familiar with this client’s business, and the nature of his video projects is pretty much the same from project to project.  It’s likely he can outsource some of his editing tasks; however, he will need to learn how to bid on projects with people remote from Austin, Texas, and, more importantly, learn how to collaborate with people whose native language is likely not English.

It’s all about the relationship, and as we all know, relationships take time to build and they don’t always go as planned. The difference in working with contractors on Elance is it takes a lot more time to grasp the nuances of the relationship, especially if you’re using only email (therefore, I’m always suggesting Skype). Sometimes this is not an issue for short-term, simple projects that take only a few hours, but for longer-term, on-going work you’ll need to be aware of the relationship-development time factor.

Consider your initial projects as a kind of testing period. Look for smaller chunks of a project that you can portion out and see what it’s like to work with people overseas.  This will help you see the time required to develop a relationship through the email that you send back and forth. For example, on my iPhone applications I’m seeking bits on just the requirements development piece. I’m willing to risk $100-$200 for a firm that says they specialize in this area to see how it goes in creating the specification for the application. Typically the hourly rate will range from $10-$20 or more from companies in India or Eastern Europe. This is low enough for me to potentially have two companies collaborating to put a requirements document together so I’m sure I’m getting a range of ideas about what’s possible.

Sometimes I recommend using Skype for both chat and audio/video calls to help you get a better feel for the person on the other end. For video editing I think it’s going to be imperative to have text, audio and video chat capabilities with the person(s) you’re developing a relationship with. One simple trick to check on the status and ‘feel’ of a project early on is have the editor point their webcam at the screen to show you some incremental results. This will help you feel more connected and keep the feedback loop tighter.

You might not do this for a simple 1- to 2-hour project. For that, email is fine. But if you’re doing something like video editing you want to get to know the contractor so the end result is more what you’re looking for. If you think about it, it’s the same thing you’d do if you hired a local editor. You’d meet him or her for coffee and just talk some. So you’re going to need to do something like this in a more abbreviated form with Skype calls or Skype video to develop rapport.

In summary:

• Take a project and break it into steps and find pieces you feel comfortable outsourcing
• Get familiar with the process of bidding on eLance with something you’re not in a time crunch on
• Remember, you’re working with someone whose first language is not English, and even if they are taught English (as are people in India) their culture and work behaviors will be different from yours

Outsourced projects often take 2-3 times longer to complete. This isn’t always the case but quite often you’ll feel a sense of frustration when dealing with people in companies overseas. Very often those companies are 1- to 3-person businesses – just like yours. Remember, you live in a different time zone and culture. You’re hopefully going to get quality work at a lower price, so be patient if they take longer than expected to get back with you and complete the job. Focus on the relationship and communicating clearly and even-handedly.

Be willing to fail. In some cases you might start a project with a company and, despite your best efforts, you don’t get the results you want. Be willing to let that go and work with another. I’ll say it again: It takes time, and you know how relationship-building can go.

A word of caution: If you notice that you’re not having good luck with local contractors you might take a close like at what’s going on on your end before you try outsourcing. I say this because people are people and even though they are located in a different country they can sense when they are working with someone who is difficult in some way. You could end up with the same experiences in outsourcing as you have with contractors locally.

This may seem like a lot to keep in mind. Sorta like the first time you go on a date and you’re gettting all kinds of advice from others about how to proceed. That’s my point, though. You’re building a relationship with someone to perform important work for you. Make it clear that you believe ‘they’ are important and be patient (very patient) as you communicate in various forms.

Tom

This entry was posted on Saturday, January 3rd, 2009 at 9:54 pm and is filed under outsourcing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.