I’ve been a virtual worker for over a decade and I still find it somewhat mystifying. At a personal level I’m motivated by the quality of life it gives me – closeness to my family mainly, and the chance to manage my time over the day. I expect that’s the same for many people and that’s no surprise.

What I do find surprising is how stable, robust and effective it seems to be. Orthodoxy tells you that we need face-time and daily communication to build cohesive, functional teams – without it people get off message, do the wrong thing, waste time and generally are not that effective.

I can imagine that for many types of work this is indeed true. But for a lot of what we do it doesn’t apply. We seem to have stable and effective teams without the face time, without the daily communication. In fact, it’s more surprising than that – most of our team members have never met. Ever. And in many cases, our team members don’t even talk to each other. And more surprising yet, many have never talked to each other. Isn’t that amazing?

And yet they still churn out high quality, professional output that, for example:

• Is circulated at the executive level of Fortune 100 corporations
• Is used by brand managers to guide new development investments
• Is used by consultants in client presentations
• etc.

There is no magic to this – we work hard to find the right people (detail focused, experienced, driven by quality…), ensure high standards (poor performers don’t last) and have managers that rigorously check our work. And we communicate a lot via email and instant messaging and yes, sometimes by phone.

And we benefit from very low churn rates (2-5% at last estimate), which means we don’t need to spend time and money retesting and retraining people. The people we have are motivated to work with us (probably for similar reasons to my own but hopefully also because we pay a fair rate, provide interesting work and they see we are easy and honest to deal with).

For all this, I still find it surprising that year on year and on a weekly basis I work with well over 20 people that I’ve never met or spoken to. Some people I’ve worked with just for a few months and for others it’s a decade.

So I’ve decided to change things a little and get to meet (and talk!) to some of my ‘colleagues’. In coming months (and probably years) I’m going to visit some of the people that I work with to get to know them better. I’m not sure what this will achieve.

Perhaps I’ll get to understand virtual working better and maybe improve how it works. At a minimum, I hopefully won’t screw up something that works! Anyhow, stay tuned…

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!

We had a little bit of good news this week – we’ve been asked to take over some outsourced research for one of the world’s largest advertising conglomerates. That makes it sound like a big deal but it’s not, at least not yet – it’s perhaps 0.5-1 full time equivalent, but hey, it’s something, especially in this environment!

The significant thing is that the work is now coming to Business360 instead of an Indian-based supplier that had the contract for a number of years, which means the work will now be completed by US-based researchers working from home. It’s not much, but if every company in the US did the same we wouldn’t be in a recession!

I don’t have the full reasons that the client changed but I gather we’re about the same on price but the advantage of having the work done within the same time zone and by experienced researchers (professional librarians, corporate librarians and the like) made the switch worthwhile.

The other day Gartner came out with its top 30 offshoring destinations. Unsurprisingly, India is the front runner but the range of choice is impressive:

New contenders are emerging to challenge the Bric (Brazil, Russia, India and China) countries’ dominance of the offshoring market.

While India was the “undisputed leader” followed by China in the list of the top 30 offshoring destinations, as compiled by analysts Gartner, this year’s list showed Mexico, Poland and Vietnam pushing their way up to take them on.

Ian Marriott, research vice president at Gartner, said these countries would be seeking to take advantage of the credit crisis to capitalise on organisations’ drive to save costs

You can see Gartner’s list here and some commentary here.

Around the same time the UK’s Computer Weekly came out with its Top five outsourcing destinations to watch for IT services and outsourcing. IT outsourcing is very different than BPO, but where IT leads, BPO often follows. Computer Weekly’s top five are:

1. Argentina

2. Bulgaria

3. China

4. Egypt

5. The Philippines

I was intrigued by the inclusion of The Philippines, a country where we already complete a fair amount of work – the time zone is great for overnight processing, the education system is good and, we find, people are keen to learn and ready to listen to feedback – important things when you need manage quality from many time zones distant.

Over the last five years or so the dominant direction of business process outsourcing has been to India, with other countries like the Philippines and China lagging behind but still taking a fair chunk of work from US and European professionals.

And the biggest reason was the chance to lower costs, mainly on the back of lower wages in these countries. The wage differential remains substantial but the case for pushing ever more work to these countries looks to be weakening.

A December 2008 report from TowerGroup points out that managers at some US companies are discovering that offshoring in India is not the cost-saver they imagined, especially for captive offshore operations, in which the US parent sets up and runs the outsourcing operation, usually employing local workers to staff much of the operation.

Reading this reminded me of a February 11, 2008 article in the Wall Street Journal –
Rethinking the India Back Office; Some Western Firms Weigh Selling Their Units as Costs Rise, Dollar Weakens. The author, Jackie Range, cited a study by McKinsey & Co. and Nasscom, the Indian tech and outsourcing industry group, which found that, on average, company back offices – “captives” – were less efficient than companies run by outsourcing firms that specialize in the business. For some types of back-office work, captives’ costs are 30% higher. The survey also found that the higher costs didn’t lead to lower staff turnover or better-quality work.

More recently, the September issue of McKinsey Quarterly had an article – Time to rethink offshoring? – that showed how shifting cost curves mean the US is becoming a more competitive place to manufacture high-tech products.

“The production of high-tech goods has moved steadily from the United States to Asia over the last decade. The reasons are familiar: lower wages, a stable global economy, and rapidly growing local markets. These factors combined to make nations such as China and Malaysia favored manufacturing locations. In the last two years, however, the favorable economic winds that carried offshoring forward have turned turbulent. The new conditions are undermining some of the factors that made manufacturers of every stripe, including those in high tech, move production offshore” – Ajay Goel, Nazgol Moussavi, and Vats N. Srivatsan, McKinsey Quarterly, Sept 2008

McKinsey’s argument rests mainly on higher wage inflation in offshore locations and transportation costs and here is their summary analysis:

Manufacturing high-tech products is obviously different from knowledge services, but it all goes to show that this change is affecting business across a number of fronts.

Also, since McKinsey complete its analysis the dollar has strengthened, especially against the Indian Rupee, and oil prices have collapsed, so their findings wouldn’t be as compelling today. But these are likely short-term affects that won’t affect the longer-term view.

All up, clients will start to be more discerning when it comes to outsourcing and offshoring. One to watch.

For a business based entirely on the web we are late to the blogging game, but here we are! (We actually started a blog over a year ago but didn’t like the software package and got too busy to change it, so we now have even more time to make up…)

Business360 provides many business services – research, writing, analysis, consulting, placements and more. What makes us different is how we do it. The terms outsourcing and offshoring are commonplace, and that’s what we do, but we use teams of people around the world that work from home to deliver the services. This gives us a different perspective on business process outsourcing, and that is what we’ll write about.

We’ve been in business for about 10 years now and have seen various trends, some ebb and flow and others never leave. This blog will share some of thoughts and opinions and ideas and we hope it will be a useful springboard into the terrain.