I managed to get in touch with Ray Grainger, CEO of Mavenlink, and he shared with us some key insights on what he knows about the rising trend of outsourced labor and what his company does to cater to both, the individual, and the employers involved in these relationships.

The first thing that Ray wanted to clarify is that many workers flourish under an independent solopreneur system. A main reason for that, he believes, is meeting spaces like Mavenlink that can expand on potential client lists to include all four corners of the map. Specialists are no longer limited by their geographic location or ability to travel, they can work with customers all over the world.

Another point Grainger hoped to raise awareness on was the increased demand for collaboration spaces online, and the stringent demands clients put on him for meeting space that delivers privacy, security, and convienience tools. He explained his surprise at how particular both, employer and employees are in regard to handling the sensitive nature of their online meetings. Apparently these folks know exactly what they need and how they want it delivered, so it’s arduous job seeing these need are met.

Speaking specifically to the infographic, Ray pointed out again that almost 40% of the workforce is facing the challenges of becoming an independent worker, but the industry is adapting and trying hard to deliver tools to make the employer-employee relationship a more mutually beneficial one. We spoke specifically about the need for employee benefits that can travel with an individual to optimize the freedom of operating on an independent level.

Providing healthcare and other benefits that are traditionally only made affordable by belonging to a specific organization could make independent work more feasible for many professional and entice many more talented individuals in to the arena. These new insights give me hope for the rising trend of independent and outsourced work. I am happy to hear there are organizations who seek to maximize the value of the relationships rather than merely seeking to decrease liabilities and increase profit margins.

The internet has made the world a much smaller place and we have increased access to a more specialized and cutting-edge workforce. Now we need to figure out how to best employ these folks and make it worth their while. It sounds like Mavenlink is slaving away on that endeavor each day.

by Column Five Media.

Other moderators, primarily young, well-educated people working in Asia, Africa and Central America, all describe similar, ridiculously low salaries. Adam Levin, owner of British social network Bebo, says that the process of outsourcing is “rampant” across Silicon Valley. He adds, “we do it at Bebo. Facebook has so much content flowing into its system every day that it needs hundreds of people moderating all the images and posts which are flagged. That type of workforce is best outsourced for speed, scale and cost.”

About 4 billion articles of content are moved every day between Facebook’s 845 million users. Most falls under acceptable standards, but a lot also falls into catergories of pornography, racism and violence – all of which is policed by an outsourced workforce in a third world country, for $1 an hour. Graham Cluley of Sophos states that Silicon Valley’s outsourcing culture is a “poorly kept dirty secret.” Levin adds that he estimates that Facebook employs between 800 and 1000 workers through oDesk, about a third of its “regular” staff.

With Facebook mainly consisting of acquaitances explaining pictures of their breakfast, photos of countless new babies that all look roughly the same, friend requests from strangers users knew for a day 15 years before, generalized misrepresentation of one’s actual life and face, etc., it is interesting that the actual moderators of all of this content don’t even undergo criminal background screening. According to Derkaoui, his past wasn’t looked at, and there were no security measures stopping him from obtaining user information, as well as no barrier blocking him from uploading whatever he’d wanted onto Facebook himself.

Regardless, Facebook has a statement on the matter – “these contractors are subject to rigorous quality controls and we have implemented several layers of safeguards to protect the data of those using our service. No user information beyond the content in question and the source of the report is shared. All decisions made by contractors are subject to extensive audits.” I tend to go with what Derkaoui said.

Still, I find it hard to believe that any information regarding the actuality of Facebook’s weak privacy standards will prompt more than a handful of its 845 million customers to actually quit.

If you need some web development stuff done, who do you pick? A web dev firm, right?

Now, if you want to implement an online public relations campaign, who do you turn to?

If you said a PR firm, you’d be wrong! And I can prove it with E-consultancy’s Online PR Industry Benchmarking report.

First, even PR firms don’t consider online PR to be their area of expertise–with 64% of UK PR firms confining online PR to a specialist division.

Maybe that lack of integration–and perhaps confidence– is why a whopping 49% of UK companies actually outsource their online PR to search marketing firms and web development companies.

Those that do outsource their online PR are anything but satisfied with the results–with only 48% of clients claiming to be either “very” or “moderately” satisfied.

If you’re interested in diving deeper into the data–and if you’re a PR professional, I’d suggest it be mandatory that you do–you can find the full report at the E-consultancy web site.

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"I say, let’s end tax cuts for companies that ship American jobs overseas, and give them to companies that create good jobs right here in Indiana, in the United States of America," Obama has been quoted as saying.

India makes a large amount of money from outsourcing jobs coming from the U.S. Niraj Sheth posting on Washington Wire at WSJ.com reports:

But amid general excitement over a change in leadership in the U.S. is more than a hint of hesitation. During the long campaign, Obama took a stance against outsourcing, raising worries among people in India’s flagship industry, which gets nearly 60% of its revenue from U.S. companies. On the road, and in debates, Obama repeated that if elected, he would discourage companies from “shipping jobs overseas” by taking away tax breaks…

But people in the outsourcing industry here still expressed concern over Obama’s earlier comments. The industry is holding its breath to see what Obama does once he’s in office, says Som Mittal, President of Nasscom, a tech industry group. “Unemployment has more to do with the manufacturing sector in the US. We shouldn’t mix up the issue of unemployment with tech.”

Indian Finance Minister P Chidambaram does not seem too worried. According to Business Standard, he said that Obama’s anti-outsourcing stand will not impact Indo-US economic relations. "I am very confident that US-India relations will only be stronger in the future. A comment here, a comment there about outsourcing should not bother us," says Chidambaram.

Gartner Vice President says, "In a specialized field like IT, it is not just a matter of ‘choosing’ to outsource overseas or not, but the issue of skills availability locally." Iyengar believes Obama was referring more to manufacturing jobs than IT.

YouTube Videos Reveal Anti-American Outsourcing

UC Davis professor Norm Matloff has long sounded the clarion call that the H-1B program and green cards have numerous loopholes employers can exploit. That exploitation allows them to easily avoid hiring more expensive American workers, particularly older ones, in favor of cheap foreign labor.

Videos from a Cohen & Grigsby event held in Pittsburgh on May 15th made it onto YouTube. The series of videos as described by Dr. Matloff proved to be more than just a promotional effort for the law firm:

This set of videos gave a dramatic inside look at some of the loopholes, especially in the case of the employer-sponsored green cards. Here you have lawyers openly stating that their goals are to (a) help employers avoid hiring Americans, and (b) help employers hire foreign nationals on the cheap–and to do all this FULLY LEGALLY.

Matloff listed several choice quotes from the video, including this one by one of Cohen & Grigsby’s partners, Larry Lebowitz:

And our goal is clearly, not to find a qualified and interested U.S. worker. And you know in a sense that sounds funny, but it’s what we’re trying to do here. We are complying with the law fully, but ah, our objective is to get this person a green card, and get through the labor certification process.

So certainly we are not going to try to find a place [at which to advertise the job] where the applicants are the most numerous. We’re going to try to find a place where we can comply with the law, and hoping, and likely, not to find qualified and interested worker applicants.

The videos have since been removed from YouTube, but not before being viewed by a lot of people, including CNN’s Lou Dobbs, who made this observation:

But there are two facts that people keep forgetting — seven out of 10 visa requests under the H-1B program come from Indian companies in the United States to provide employees to outsource to American companies and reduce wages.

And the other little minor item which is supposed to be high-skill jobs, four out of five jobs under the H-1B program are level-one jobs, not level four, i.e., low-skilled jobs, not high-skilled jobs. These are Americans trying to screw American workers.

And it just is as plain, straightforward and can anyone convince any of us that the president of the United States and this Senate with this sham amnesty program isn’t aware of these facts?

Both InformationWeek and ComputerWorld have noted how US Senators Charles Grassley and Lamar Smith have demanded investigations by Labor Secretary Elaine Chao.

Meanwhile, readers who hear about companies asking for expansions of H-1B and green card programs, as Microsoft and Google have done, should keep in mind just what the impact of such an expansion could be.

In House or Outsourced – Consider Your Resources

There are several basic assumptions that can be made about any company that is interested in SEO in general. First, the company likely wants to see immediate results from the campaign – or, at the very least, results as soon as possible in the organic search engine rankings. Quick results, by necessity, mean that the company has to have immediate skill available on hand.

And immediate skill, it is important to recognize, means something different than having a staff member who has a technical background but who will take several months to learn about SEO and the best way to go about it before starting a campaign from scratch. In this case, there is no way the company will get results for several months – or longer. Meanwhile, an SEO firm that has experience and expertise and that specializes in this very specific discipline can begin the project on day one and bring results far more quickly.

In addition, a company will want to ensure minimal risk to its website. However, in order to make sure that the site is not placed in jeopardy of being penalized by one of the major engines, the person running the campaign must have experience with SEO and must be well versed in the terms of service of those engines. Again, handing off the project to someone with no or little experience in SEO can backfire because he or she may risk introducing dangerous changes onto your site based on outdated information or simply on a lack of understanding.

Analyzing Your Company’s Situation – What’s Your True ROI?

At this stage, a company that wants to take its SEO campaign in house needs to analyze its situation. Does the company have someone on staff right now with extensive SEO experience, preferably with an SEO firm? Moreover, does that person, assuming he or she exists, have the time to devote in his or her schedule to begin undertaking the SEO campaign immediately? Bear in mind that an SEO campaign is not something that can be worked on as a side project or in someone’s spare time, particularly when that person has a primary job function with which to be concerned. SEO takes a great deal of time and management in order to not only achieve results but also to maintain and improve those results over time. You also need to determine whether this person has the clout – or access to those who have the clout – to get the necessary changes to the website made and to get buy in for the entire SEO initiative. 

If your company cannot answer a solid yes to all of the above questions, then you need to compare the relative costs. It is likely that your company has a finite budget for this initiative – everyone does. Therefore, the company must determine if it can afford to bring a full-time expert in SEO onto the staff – someone who generally commands a salary of near or above six figures – or to pay an existing staff person to handle the project. On the other hand, an SEO firm with an excellent reputation can cost around $30,000 per year for full optimization of your website.

But this issue goes beyond cost and also encompasses your total return on investment.  Even if you have a person on staff with extensive SEO experience and a great deal of time to devote to an SEO project, and even if they have the clout to get changes implemented on the site, they still will only be working on one site (along with any other job functions with which they need to be concerned). On the other hand, an SEO firm will have many sites – possibly hundreds – to work on, which means that it will constantly be staying current with all of the best methodologies and will be able to immediately apply new tactics to these sites to get the best possible results. Plus, the SEO firm will not have other functions to take care of, because SEO is its entire focus.

Conclusion

There are, of course, companies that successfully handle SEO campaigns in house. But when an SEO campaign falls to somebody that already has a separate job function and that is new to SEO, it can take much longer to get things started than it would when working with an SEO firm hired for this specific purpose. In addition, an internal person cannot necessarily guarantee that a site will not get penalized – the terms of service for the major engines are constantly changing, and it’s the job of the SEO firm to stay on top of this. What’s legal today may be illegal the next day, and an internal staff member may not have the resources to know what has changed.

Finally, it is important, when comparing the cost of outsourcing to an SEO firm vs. handling the campaign in house, to make a real comparison of the actual cost involved in terms of your company’s annual spend based on hours, ROI, and the opportunity cost due to the length of the campaign – whether it’s handed off to a new, inexperienced person or to someone with an SEO background who has other duties to attend to. And in the end, let’s face it – if you’re not getting the results you want, it’s always much easier to end a contract with an outside SEO firm than it is to fire someone internally.

© Medium Blue 2007

In “Out Souring the Grunge Work,” I talked about taking all the day-to-day activities that could be rolled up and outsourcing them. Those included functions like daily system administration, AD administration, security administration and hive them off to a company that specializes in this field.

Today Google agreed with me, and you can make a safe bet that many other companies are thinking the same way. If you want to innovate, and you want to hire innovative people, you cannot have those same people doing day-to-day grunge work. Creative people are hard enough to find, you cannot afford to allow them to get bored along the way.

Google vice president Girouard said was:

“The way Google built what is on the order of a $10 billion business in eight years was through some pretty amazing innovation,” said Girouard, who is also a vice president at Google. “CIOs in particular are really in a difficult situation, and innovation isn’t something they can spend the majority of their waking hours talking about. The information technology business as it pertains to large businesses has become a lot of maintenance.” Girouard promoted the software-as-a-service model, saying companies should join this growing trend of outsourcing IT tasks, even if it means trusting third parties with sensitive information.” (Network World)

Many times, we have wrapped our ways around the concepts of outsourcing, and why it is both good and bad. Finding an outsource company you can trust, one that will accept your policies for operations, ones that have good talented people, and otherwise is part of the game.

You should not buy technology because of what someone says, you should buy technology because it is the best of breed, has a wide consumer base, and an excellent record of accomplishment of responding to clients needs.

You should not buy an outsource company based on lowest bid possible, you should buy support from an outsource company because they excel at what you are outsourcing, have deep roots and smart people in that kind of work, and have an excellent track record of responding to client needs. As well as enough insurance to cover liability, the ability to segregate data so that companies data does not intermingle, as well a host of other “shop smart” processes that will take the “worry” out of outsourcing.

Outsourcing may not be popular, but think about it, if you have an outsource company that specializes in information security, and they have the best and brightest, they are going to innovate in the field of information security, and innovate in ways that no other company can in the realm of information security. In the longer run, everyone ends up with a better product, at reduced costs, with the outsource company doing good things, and the company who out sources doing good things. As long as the passion, the skills, and the desire to innovate is there, everyone wins.

Shop smart though, not everyone is equally competent, do the homework, make sure that what the outsource company wants to give you is exactly what you need. Make sure they meet HIPAA, GLB, SOX, HB1386, SAS 70, and the host of other laws compliance. Talk to their customers, write the best legally binding contract available, and move forward, innovate and grow.

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Dan Morrill has been in the information security field for 18 years, both
civilian and military, and is currently working on his Doctor of Management.
Dan shares his insights on the important security issues of today through
his blog, Managing
Intellectual Property & IT Security, and is an active participant in the
ITtoolbox blogging community.

One of today’s trends to solve this problem is outsourcing logistics or using third-party logistics (3PL) to manage complex distribution requirements.

Organizations have developed strategic alliances with 3PL companies all over the world to manage their logistics operations network. These alliances are also known as supply chain partnerships or contract logistics (that is Exel’s preferred category).

Levels of Outsourcing

• Transactional: Based on transactions, with no long term contracts and no bonding between the 3PL and the outsourcing company. Carrier affiliated organizations are common in this sector.
• Tactical: Outsourcing on a long term basis with negotiated contacts and integrated IT systems to facilitate free information flow and create supply chain visibility (The goal should be fiscal visibility, within the supply chain).
• Strategic: Based on long-term relationships with successful outcomes, 3PL companies become partners in supply chain management and establish transactional transparency in all facets of the international supply chain.

Why Choose to Partner with a 3PL?

• Save Time: Outsourcing the Logistics function can free up resources to focus on core competencies.
• Because Someone Else Can do it Better: Even if you have resources available, another organization within the supply chain may be able to do it better, because of its relative position in the supply chain, or they have a certain supply chain expertise, and the 3PL may have economies of scale.
• Share Responsibility and Risk: 3PL’s can share responsibility (and risk) for managing global supply chains, keeping customers and stores properly stocked, and delivering the perfect order every time.
• Re-Configure Your Distribution Network: 3PL outsourcing can be a quick way to re-configure distribution networks to meet global market demands and gain a competitive edge.

3PL Partnerships Are Growing

According to a 2005 Cap Gemini study, North American organizations planned to outsource 56% of their logistics expenditure by 2006 – 2008, with Western Europe planning 81% and Asia-Pacific 60%. The same report revealed that 78% of the respondents are outsourcing logistics activities in North America; 79% in Western Europe and 58% in Asia Pacific.

These organizations are outsourcing logistics activities and upgrading relationships with 3PL companies from transactional, to tactical and strategic relationships.

According to a 2005 survey, CEOs of 3PL companies operating in Asia-Pacific expected 17% average business growth over the upcoming three years.

Achieving Strategic Outsourcing

Unfortunately, only a few 3PL companies achieve strategic status with their customers. Exel is one of them. It is done by constantly innovating and maintaining operational integrity. Some use an open-book costing method to demonstrate their system’s transparency, which is being embraced by many Fortune 500 companies.

If you are planning on implementing a 3PL partnership, read my tips about how to implement a 3PL game plan successfullythere are plenty within my blog from 2006 and 2005.

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Michael Stolarczyk is currently Senior Director, of Business Development for Exel in their Westerville, Ohio General Office for the Americas. He is also on the Board of Advisors for West Virginia Universitys School of Business.

Michael’s Blog: http://blogonlog.blogspot.com

Flash platform developer Brajeshwar Oinam seems to think it’s an inevitability. Oinam, an Indian himself, is taking some flack in the comments section of his blog for being demeaning towards his own countrymen.

His written English is broken, but, basically, Oinam is warning Digg fans about the invasion by “the Indian troll,” one of the “Indian Technical Swarm” that has a date with outsourcing destiny.

The demeaning part:

Yeah, we know. Americans are fat and loud. The French are stinky and rude. Indians work in call centers. Stereotypes suck. We got it.

Muhammad Saleem, at his blog, The Mu Life, continues Oinam’s thread, no doubt releasing a breathy “hmmm” just like in his picture. Saleem explores the idea of “dirty marketing” via social media that exploits cheap labor in developing countries.

In Saleem’s estimation, a dirty marketer could hire 15 “drones” for less than $1000 per month (about 34 cents per hour) to create multiple Digg.com accounts, submit and digg selected content.

Boom. Instant buzz. Brilliant.

While it’s a good evil idea, it’s a non-starter because it seems it would be reasonably easy to block a sudden surge of new Digg members from certain IP addresses workin’ the dirty on the site.

Unless a new and better evil idea includes a way to get around that. I’ve heard the Indians are excellent hackers, too, Brajeshwar, just like how Americans are excellent at shooting things.

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As well as pushing patches, building and tearing down boxes, and a host of other day to day, and fairly dull work. The concept is to outsource the grunge work, saving expensive staff for projects, architecture, and other high value high visibility projects, reduce the staff hours spent doing grunge work, and over all improve the quality of the work environment.

This is probably one of the better ideas, both from the social aspect, as well as from the business aspect. And here is why.

From the business aspect:

The average security employee here in Seattle costs 85,000 dollars a year, +10% taxes, plus on average 25% in perks, benefits, medical and dental. This brings up the average cost of an employee to a little under 117,000 dollars. This is a rough rule of thumb, the same holds true for network admin and system admin. Outsourcing day to day simple tasks, or about 5 people in a medium sized company, can save somewhere on the order of 600,000K in employee costs. If you can outsource these kinds of tasks, those issues are dropped off to someone else, and you can usually negotiate a contract for that in the 400,000 to 450,000 range, with an instant savings that is show able to management.

Quality of Service metrics are easily maintained using ticketing systems, those can form the core of QOS metrics that can determine how well the outsource company is doing in performing those day to day tasks.

Technology like VPN systems, RSA authentication and others can go a long way in making sure that only those authorized can actually access the systems.

You only need one manager in company to keep an eye on and track the outsource company. That one manager should have the authorization and authority to authorize changes to ACL’s, firewalls, and other systems if they are needed. One point of contact for both companies can help communications and keep the operation moving smoothly.

You have staff available then for the high priority, high value, high visibility projects, that are fun, exciting, new, and otherwise can give folks a high quality of work environment where they can go build something, be innovative and entrepreneurial.

From the Work Social Aspects

You now have people who can run with those new systems, high value projects, and other projects that have been sitting on the back burner because of lack of resources.

You can work on building out the innovative environment when the day to day management of the thousands of small tasks is no longer your issue.

People can build out more diverse teams and work with different segments of the company on a more regular basis because they are not nose down into technical mundaneness of IT overall.

Something to think about, while doing your home work, and finding organizations that have been SAS 70, ISO or other standards signed off on will be interesting. They are out there, and can really free employees to go off to do the fun stuff, while the day to day grunge work is pushed onto someone else.

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Dan Morrill has been in the information security field for 18 years, both
civilian and military, and is currently working on his Doctor of Management.
Dan shares his insights on the important security issues of today through
his blog, Managing
Intellectual Property & IT Security, and is an active participant in the
ITtoolbox blogging community.