We’re on the lookout for an experienced report writer who can help us with our growing work load. Our first port of call for this sort of thing is ClickNwork but that route hasn’t worked this time so we’ve been running ads in a number of places. In case you or someone you know might be interested, here it is:

“Business360 is a New York based company that for over ten years has been delivering a range of professional services to leading Fortune 100 corporations, advisory firms and many smaller companies focused on niche areas.

Our work centers on research, writing, analysis and competitive intelligence generally.

We are not a typical company – we are entirely virtual and everyone works remotely from home. We often have many people working on large projects from many different countries and it can take good management skills to pull things together and deliver a quality product.

We are looking for someone to help manage some of our projects, which will include coordinating work inputs by our researchers/writers/analysts as well as helping to prepare reports for clients. In time we’d expect there to be some client contact and management but no selling (our issue is doing the work we have, not getting more).

We don’t have set requirements for your background but given the research and written skills required in much of our work we’d look positively on people that have a lot of experience in preparing client-ready reports and presentations. Over the years we have had good results working with people that came from consulting companies, from banks as analysts, or from a range of corporate positions as market/consumer insight researchers.

This is not a full-time position but contract work that will start on an ad hoc basis, although if things go well it should grow and could be full-time if you wanted. Also, we do not have a fixed pay rate. Instead it will depend on the project and will range between $40-120/hour, being determined by a number of factors such as complexity, urgency, duration etc. Generally, there will be more work at the lower rates and in time we would hope it rises as you take on more complex and demanding roles.

The range of work varies greatly with the style and format required changing for each client, but typical projects include:

• Reviewing and preparing competitive intelligence reports on companies and about their earnings performance
• Managing and editing a range of competitor profiles on leading companies that bring together financial data as well as market and category insights
• Assembling compelling consumer insight documents about consumer trends from a disparate range of multi-language sources

We’d prefer someone in the US and ideally close to New York but in principle we are open to promising candidates wherever they are.

If you’re interested in this opportunity, please reply to this ad, attaching a recent resume, notes on what experience you have preparing competitive intelligence/analytical/consumer insight material as well as some samples of your work (sanitized if need be). It’s also important for us to understand why you want to work from home and whether you have any other work-from-home income streams.”

(If you read this and want to reply, please reach us via our contact page – thanks)

I said I’d give some details about the work I’ve been doing with Yurii over the last few years…

Essentially we’ve been building a system that manages a team so we can:

1. Dispatch to clients articles on topics they want tracked
2. Send highly targeted news summaries to people/companies so they can easily follow developments on very precise topics
3. Automatically create personalized newsletters at scale, sending links to hand-picked articles and summaries of selected articles to individuals according to their personal selections

It’s hardly exciting stuff but it does fill a need and five or more people already use it daily as part of their work with us.  I’ll give more details about each function in later posts.

In all cases Yurii and I work like this: I sketch out our requirements and email them to him, usually clarifying things via MSN or Skype. He estimates the time needed and gives me a budget, then sets to work, asking questions as he goes. We pull in designers and other support as needed but mostly he does the work.

Sometimes the clarifying exchanges are intense but usually they run pretty smoothly – we both have a good sense of how the system works and how to fold-in changes. That said, conveying complicated ideas can be slow and frustrating. Relying on just email and IM means we can’t sketch out ideas or have a rapid exchange of clarifying thoughts and it can take a lot of patience (both sides) to make sure we have things clear. That’s a material inefficiency that I’d like to get past.

One upside is that the difficulty of conveying a requirement makes you focus on it a little more, because it’s just too much of a pain to specific one thing and later realize you wanted another!

The biggest advantage to us of working with someone remotely is cost; we simply couldn’t afford to experiment with different ideas and innovate as freely as we do. And the biggest downside is speed. Things don’t go fast, and they’re rarely on time. I’ve managed IT jobs before and this comes with the territory, but I find with remote work things mostly take longer. Our work with the system Yurii is building for us is important and I have great hopes for it but it’s not our core business and we wouldn’t be able to move so slowly if it were; we’ve traded speed for cost and that’s been ok so far but it will be interesting to see if meeting will make things faster.

Busy day:

• I got involved clarifying the requirements for a strategy brief for an ad agency needing material for an upcoming pitch, and at the other end of the work process I had a call to run through core findings and insights for another brief we wrote.
• I wrote a proposal for a client looking innovation philosophy and best in class practice at a set of consumer goods companies.
• New employment numbers came out today and I reviewed a brief we prepared on what they mean for the US economy and the consumers in particular (short answer: not a great cause for joy)
• Kicked off some market research work looking at the personal care market in about ten emerging countries

Friday evening – off for a drink…

Whenever I’m asked what I do I struggle to explain. Like many people’s jobs these days, it doesn’t fit neatly under a particular title or role. It’s amorphous, ill-defined and changes daily.

My confusion doesn’t end there; I also find it hard to explain what Business360 does, which too is amorphous, ill-defined and…

And starting tomorrow, and in an attempt to kill two birds with one stone I’m going to blog about it (can you tell that I’m already scraping the bottom of the barrel even though it’s just day 3 of my blog fest!).

Try and stay awake back there!

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.

It’s a near as damn a year since my last blog and I think that certifies me as a slow blogger. Would that be a SlowLogger, a SlobLogger, a Slobber, a Slob…? Perhaps a better explanation is that I’m just slow.

I thought I might be championing a new genre but it seems people have been rallying the cause of slow blogging for some while:

http://www.nytimes.com/2008/11/23/fashion/23slowblog.html
http://toddsieling.com/slowblog/?page_id=10
http://www.cjr.org/campaign_desk/a_slowblog_movement.php
http://bgblogging.com/

Anyhow, that will change this month as I try to blog once a day, just to obtain a fair average for the year. I might even resurrect my Twitter account.

See you tomorrow…

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!

Business360 is a network business. We are only as good as the people in the network and we work constantly to find people with strong skills and experience to add to it. Most people that join are happy to let us do the marketing and selling and we’re fine with that – they just do the work we send them.

But sometimes people join that have a very specific skill set or ideas for additional services they want to offer, and by working together – blending that individual’s skills and experience with the wider Business360 network and processes – we can often do much more and much faster.

Here’s a good case in point: Harold, a friend I met way back at the business school HEC in Paris, started working with us a couple of years back. You can read his ClickNwork profile here.

Harold’s focus is finance, particularly special situations such as distressed debt or raising capital through private placements. In light of recent financial dislocations (you may have read about it. The banks hit a rough patch and have been downsizing like someone on a salmonella diet), many banks, hedge funds, boutique operators and others are trying to cope with higher and often more complicated workloads just at the time when headcount is down. To make it worse, revenue streams (assets under management, deal flow, trading volume…) are down too, creating continuing pressure to reduce costs.

After working with us, Harold realized that leveraging our network could be a valuable tool for many financial operators struggling to cope with workloads, and, with our teams in lower-cost locations, there was the chance they could save money too.

So we’ve been talking to some of our hedge fund/banking/buy-out clients about these additional services we can now offer. Where established clients know us through other work it’s usually an easy next step. Click on the image to read more about these financial services:

I was expecting 2009 to be a terrible year for Business360 (it may be yet!), but so far business is surprisingly strong. We are up on last year, two of our top three months happened this year and the pipeline is looking fine.

Sure, we’ve had some disappointments. Some clients have pulled right back (especially banks and hedge funds), some have asked us to lower rates (sometimes we can, often we can’t), some have reduced the amount of work they send us, but most clients are giving us much the same or more, and at the same time new clients have come to us (ad agencies, professional service companies, large corporations…), and these new clients have generally given us a lot of work. Go figure!

I think part of the story rests in clients cutting back on their own payroll and needing vendors to help out, but I think a more significant explanation is that companies are really reluctant to cut back on research. I’m afraid I can’t claim this insight as my own; the light bulb went on last night when I read an article in the April 20, 2009 edition of the New Yorker, by James Surowiecki in his column, The Financial Page, called Hanging Tough.

Surowiecki points out that

“…numerous studies have shown that companies that keep spending on acquisition, advertising, and R. & D. during recessions do significantly better than those which make big cuts.

In 1927, the economist Roland Vaile found that firms that kept ad spending stable or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn’t. A study of advertising during the 1981-82 recession found that sales at firms that increased advertising or held steady grew precipitously in the next three years, compared with only slight increases at firms that had slashed their budgets. And a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D., and ad budgets, while companies at the bottom of the pile had reduced them.”

Of course, advertising is a little different from R&D, but a lot of our work comes from consumer goods companies conducting market research, or trying to get consumer and brand insights, or from ad agencies wanting a better story for a new business pitch, and good research is an essential part of all of these.

If Surowiecki is right then the companies that will emerge from this downturn strongest will be those that continue to invest, looking for better ways to help their consumers – using research and analysis to identify opportunities, and marketing and advertising to communicate them.

That’s what I was asked, by email. Someone read my previous entry and wanted more details on how a company could truly realize savings on their research and related knowledge work, without a loss of quality.

Here’s a case study based on some client experiences – brace yourself as it’s rather lengthy; if you still have questions at the end of it, just let me know.

Context: Mid-sized consulting company with a corporate library of eight: two sector specialists, five generalists and one researcher for quick turnaround requests. The company is headquartered in New York with five researchers; two others work from a Chicago office and the fifth in LA.

Until Q1 2008 the team was running at full stretch with a small network of local freelancers helping out as needed (Business360 was part of the network), but since Q2 demand started to soften and there was a sharp drop in Q4. With practice (non-billable) work the team is still busy but billability is down to about 60% and still falling.

The company has an internal charge rate of $120/hour for its research services and tries to operate as a profit center, although the reality is they are happy to cover costs.

We’ve been working with the company to look at how they can save money and still deliver a quality service, and (roughly) this is how the numbers stack up. Note: we exclude data costs here which can be large but don’t really affect resourcing decisions.

First you have basic salary costs:

Then for each employee there are a series of direct oncosts (insurance, pension, training etc):

Add these and you arrive at a grand total for annual direct costs of $725,513.

But salaries and related costs aren’t the only ones, there are also indirect corporate overheads, which in this case we just limit to office rental costs:

Note: we use 60 square feet here which is a little tight – most estimates call for ~125ft but the company runs a hot desking approach and believes this amount is all it needs.

Put it all together and you get total costs for each employee:

These costs go to establishing the research services of the company that are charged out on an hourly basis, some for billable purposes and some for non-billable. I mentioned above that billable work for the client’s research team has been falling and this matters since many research teams aim to cover their costs internally and the only way to do this is through internal billing. Research teams do work besides billable assignments but billable work is usually better measured, the value of the work is clearer and for many teams the percent of time billable is the key metric that is tracked. Accordingly, this analysis focuses on the most cost-effective way a research team can complete its billable work.

The amount of hours an employee can be available for billable work is crimped by vacation, public holidays, sickness and training needs, with the actual number of hours available for billable work is around 1,864:

Of these 1,864 hours the company hopes to get as many billable hours as possible, and the higher the number of billable hours, the lower the average cost.

There are two ways to look at these costs – just direct costs (i.e., those that would stop as soon as the employee was laid off), and those that include indirect costs (office rental costs and other costs that don’t stop as an employee is laid off but which are avoidable in the longer run). This difference is important since if companies really want to save what they can, they need to think about ways to avoid all possible costs, and this means reducing office space.

At high billable levels (90-100%) we find that average costs come down to about $43-48/billed hour on a direct basis (4th column), and $66-73/billed hour on an indirect basis (last column). Depending on the work we do, Business360 charges $15/hour to $250/hour (sorry for the large range, but if we are doing basic and regular data entry, web search etc it is at the low end, while rates for specialized consultants or financial analysts on urgent projects are much higher). Most of our research work is in the range $40-80/hour, so while we are competitive when a research team is at higher billable levels, the case for giving us lots of work is weak, although it is prudent for them to keep a vendor or two on hand to cope with peaks in demand.  (There are two separate points worth mentioning here – Business360 is a variable cost, not a fixed one, which means our costs only apply as we complete work (there is no charge for idle time, vacation, training etc); and second, our network-based business model means we can often access researchers with greater familiarity with certain subject areas, but I’m leaving both these aside for this analysis.)

The table above shows how we can usually help companies save money against fully accounted internal charges. Cost savings opportunities emerge when billability rates fall: below 90% we can save companies a good chunk against their full (with indirect cost) expenses, and below about 80% we even save money against their direct costs.

A logical company’s approach is to reduce its internal team in size so it runs at as close to 100% billability as possible, although given the choppiness of workflow, 90% is a realistic maximum.

So returning to the example, the company can make savings and get all its billable work done through reducing the size of its team by four, layoffs being the unfortunate reality in today’s climate. We assume reductions are made from the larger and more costly New York team. To complete the picture, we assume that Business360 picks up regular assignments that don’t require in-house knowledge (newsletters, clipping services, data capture, some secondary research), which means we can do them cheaper (~$40/hour), as well as a similar amount of some higher value tasks that can be done remotely (competitor analysis, telephone interviews, some analysis) at, say $60/hour, all of which makes for an average rate of $50/hour.

So where does this leave us? The company is still getting all its billable work completed; the in-house team is running at full tilt (and with its own internal charging, making a profit) and Business360 is picking up the difference. Business360′s work is completed mainly by people based in the US working from home, with the possibility of it being done by our teams in lower-cost countries if the need is there to process work overnight or make even greater savings.

In terms of total costs, the company moves from total direct costs of $725,513 to $359,730 (with the level of work associated with 50% billability for the original team of eight) or $732,530 (with the level of work associated with 100% billability for the original team of eight). With indirect costs the total moves from $1,109,513 to $530,397 (at the 50% billability rate) to $903,197 (at the 100% billability rate). Essentially, the company saves money under any reasonable scenario, possibility up to over $500k annually, and at the same time manages to move much of its costs from fixed to variable, not an insignificant achievement in this difficult climate.

Apologies again for the length of this thing, and if you have any questions please do contact me or leave a comment.