I managed to skip a day in my work diary – sorry!

More productively:

• We’ve been engaged by a large manufacturer to conduct financial analysis to benchmark a number of a number of their distributors and today I spent a chunk of time going through various ways we could conduct and present the analysis.

• We recently won a new client – one of the world’s largest technology companies – which is great, but right now I’m having to go through the various ‘on-boarding’ requirements – procedures, admin, security… – never fun but it will be good to get stuck into the work.

Today I also reviewed some competitor profiles we’ve prepared companies before sending them to the client.

Last, I interviewed a researcher to help us with some ongoing client work.

My focus today was a couple of our newsletter sites http://www.healthandwellness360.com/ and http://www.foodbusiness360.com/

We have a number soon to come out of beta and I’ll talk more about them then, but today I worked with our developer to resolve some technical issues, spoke to a writer who is starting today and reviewed about 20 more applications.

Separately, I had a couple of conference calls with clients talking about larger projects – one is an ongoing requirement to prepare competitor profiles on target companies; the other was about ways to track emerging consumer trends.

Last, I worked on a request to locate a patented and recently launched industrial probiotic ingredient that can be used in functional foods. It turns out the patent holder is in New Zealand and we’re getting a sample shipped.

Then I spent a little time on TED – http://www.ted.com - which is great. I could spend hours at this site

I’ve failed to blog this year because I’ve been too busy; at least that’s my excuse and I’m sticking to it! Business is up (about 50% on last year) and it’s been hard to get space to take a breather.

I’d like to be able to claim credit for this upswing (one of my roles is to get new business, after all) but I can’t – it largely happened without my doing. In fact, there seems to be an inverse relationship – the less I try to sell the more work comes in; it won’t be long before someone cottons on to this and I’m put out to pasture.

So what’s behind this? It doesn’t really make sense – the US economy (still by far the largest source of our business) remains moribund, companies continue to cut back and the general push to make savings by outsourcing to low-cost countries remains the orthodoxy.

A couple of reasons are that I think we do a good job (hey, you’d expect me to say that!):

• We have a good team that does quality work. We get to know clients, our churn rates are very low, we have very experienced people etc – these are the minimum requirements in today’s environment and we tick the boxes.

• We’re easy to work with –no minimum commitment, we do a whole range of services so can help out in many ways, we’re very reachable and responsive and while we’re not super cheap, we’re not super expensive either.

But there are three other reasons I think are at play, driving work our way:

• Clients are overworked
• Indian-based vendors are getting more costly and often still miss the quality mark
• Corporations are increasingly turning to contractors and project based work

Clients are overworked

No surprises here. Over the last two years they’ve cut to the bone and people that remain are working harder, longer and need help. Companies don’t have the bandwidth to train lots of people or vendors and are happy to turn to an external vendor they can trust.

Indian vendors are getting less attractive

Let me say upfront that I have nothing about work being conducted in India, in fact I think it’s often a great idea – we have a good number of people there that work for us, and so I know the benefits. But I also see some of the downsides and I think increasingly clients do too. This is what we hear:

• Outsourcing to India is no longer the bargain it once was. The Rupee/Dollar exchange rates continues to pressure Indian providers (their costs are in Rupees but their income is usually in US$). Since Jan 2009, for instance, the dollar rate has fallen from nearly 52 Rupees to about 45 today, a 14% fall, continuing to erode their cost advantage
• Vendor rates have also gone up as companies try to move up the value chain
• Quality remains an issue, especially in areas of writing and services that require cultural insight (marketing, advertising, trend work etc)
• Churn rates are high and clients are fed-up at having to train and retrain.
• Minimum FTE (full-time equivalent) commitments are off-putting

Here’s an anecdotal example of how things have changed. Over the last month we’ve been recruiting to create a team of five writers for some newsletter work we have. We’ve advertised on online job boards, used Elance, Guru, and leveraged our own teleworking database at ClickNwork and reviewed in detail over 200 applicants from a pool of well over a thousand. In previous years I’d have expected Indian freelancers to be amongst the cheapest, but today its people in Pakistan and Africa (I’m sure they’d have been cheaper a few years ago, but they just weren’t as connected then); good Indian freelance writers are today seeking rates comparable to writers in the US, which would have been unheard of just a few years back.

Shift to contract work

Last, companies are getting used to using contractors. This has been going on a while but the recession gave companies a great excuse to cut back, and instead of hiring back, they’re using project-based, contingent labor. A couple of stats:

• An April 2009 report (“The Emerging New Workforce”) by Littler Mendelson, one of the largest employment law firms in the country, predicted that following the end of the recession, “50% of the workforce added in 2010 will be made up of one form or another of contingent workers. As a result, approximately 25% to as high as 35% of the workforce will be made up of temporary workers, contractors, or other project based labor.”

• This isn’t just unskilled labor; it’s increasingly the domain of professional work. This chart, that comes from Staffing Industry Analysts, via Little, makes the point that over time, spending on contingent labor has increasingly been for professional skills (“Commercial” = Office/clerical or industrial)

• Analyst Christopher Dwyer of Aberdeen Group believes such workers already make up 20% of the labor force, a figure that will rise to 25% as early as next year.

Put it all together and you have companies overburdened, looking for different solutions than putting more work over to India and an emerging acceptance of project-based work completed by a growing cadre of temporary professionals.

I’m not a great one for anniversaries but I thought I’d mark the fact that Business360 kicked off ten years ago this month.

It’s been an adventurous time. We started right as the dot-com boom peaked (the market turned in March 2000), sucking away financing options for start-ups, and soon after that 9/11 helped tip the US into recession in 2001. And here we stand today, slowly riding out of the worst recession since the Great Depression. How’s that for timing!

But while we haven’t attained Google-like growth, we’re doing fine: our client base is up, revenues are rising and with new products and services about to launch, I think things look better than ever.

Looking back over a decade you realize how some things have changed and here are a few that strike me:

• We were a crowdsourcing innovator. We didn’t think of it as crowdsourcing at the time (it was 2000 and the term didn’t exist) but it turns out one of the first services we offered relied on an early form of crowdsourcing – we opened team rooms to let people from all over the world compete to answer business questions our clients had, selecting the best material located. It’s something we still use – when you have a tough question you’re researching on the web you often get a better result, and much faster, if you have 10 people searching for it rather than just one – this is true even in these post-Google days.
• Outsourcing research/writing/analysis is now commonplace. Earlier this decade there was a lot of noise about companies outsourcing information and research services. Much of it centered on whether it was wise to outsource and the prevailing view from professional researchers in the US and UK was that it wasn’t, that it would destroy the profession and yield poor quality results. Today, these concerns have largely gone; outsourcing of these functions is now standard practice and large companies that outsource this work are way more common than those that don’t. That’s not to say that it always works – there’s a lot of work that shouldn’t be outsourced and even more that shouldn’t be offshored, but that still leaves an awful lot of work that is best completed externally.
• Outsourcing research trials have gone away. Over the years we’ve been involved in a good number of trials, usually competing against our competitors, although we sometimes didn’t know that until after the fact. The most rigorous by far was run by Goldman Sachs – it lasted longer, took in way more vendors and systematically covered a lot of territory (and I’m pleased to say that we came out top on this one). Other trials that we’ve taken part in were very poorly executed, some entailed just a small number of tasks, some imposed silly restrictions, like preventing vendors from discussing requirements with the requestor, or disqualifying certain sources etc – some of these we won, and some we didn’t. We don’t see many trials these days. Things proceed more organically – companies ring us up and we talk about what we can and can’t do, and the usual course is to gradually get to know each other on a number of projects. Things normally grow from there.
• You don’t always need financing. As a company we never secured formal financing – we had a small amount of seed capital and a family member put in a little too. Instead, we’ve bootstrapped. We watched pennies and grew as our clients started to trust us and gave us more work. And that’s largely how it is today. Most of our work is repeat business and most new clients come from personal recommendations. All of which has meant we’ve learnt to be very flexible and responsive, and that’s been a good thing – giving clients what they want, how they want it, faster, cheaper etc has pushed us forward. On the flip side, lack of capital has meant we let a lot of good ideas slip by.
• Virtual working and working from home are now well-established. When we started, the idea of building a business where all the work is completed remotely, with everyone working from home, was offbeat. More radical was the idea that we could deliver high quality services to top companies with teams of people assembled from around the world that never meet, don’t talk to each other and don’t talk to us or the client. I still find it shocking. To be sure, there is a lot of communication with clients and between a lot of people at Business360 and ClickNwork, the site we built to manage workflow, but for many things we do communication beyond email or IM isn’t needed. So, for example, we have researchers and writers that have been with us for five or more years and that work with us on a daily basis, but who we have never met or spoken to, not even over the phone. But with good online and email based training these people deliver services (research, data gathering, data entry, some document preparation…) to Fortune 100 corporations, banks and hedge funds. That still strikes me as radical. Something I want to do in the couple of years or so is go on a tour to visit a lot of these people and see how it all happens – that would be interesting.

One constant throughout the decade has been rapid change and we’ve had to evolve fast to keep relevant. On that score we’ve been investing a lot in some new ways of doing things and we’ll be pushing some of them out the door soon. In another ten years time I’ll be able to say whether they were a success or a flop. Stay tuned!