Outsourcing IT development Online
Much of the growth within
the freelancing industry has been due to implementing the crowd sourcing
method; it allows employers to attract and employ freelancers who are experts
in various fields. Freelancing can range from Marketing, public relations,
research and development, legal services, and I.T solutions.
Businesses are making the call to outsource jobs that are not core
competencies to their firm; 90 percent of U.S based companies outsource
fragments of their work, according to a survey conducted by the Human Capital
Institute some outsource almost all of their work and more companies are
headed in that direction. The average potion of work outsourced in the U.S has
grown from 6% to more than 27% in the last decade, and a third of employers
reported that they used more contract employees (freelancers) in the past few
years than ever before
(Lorber
, 2011).
Outsourcing is no longer considered a temporary fix for a firm; it can be a
profit driver and a revenue making machine for companies who legally protect
themselves and micro manage their relationships with freelancers properly,
often beginning a long lasting mutual relationship with performance standards
actively met and built upon. Outsourcing can tap into talent pools that
initiate a better use of intra-firm activities by eliminating daunting tasks
that cause firms to spend valuable time trying to fix I.T problems that would
normally use that time to spend on activities that they specialize inn.
Vworker.com is P2P (Peer to Peer) information technology
outsourcing website; its platform allows buyers which can be either individuals
or firms (usually in the form of coders) working as freelancers to
connect. A buyer starts the application process by posting a specific
request to be auctioned on by describing the IT project (websites, web
browsers, add-ons, or small pieces of software). Freelancers are able to
search through all of the open requests and place a bid on the request at hand;
the bid that is posted will contain a price, as well as a description in the
form of text which provides information on their experience, and explains how
they are able to execute the task at hand. vWorker is an auction website with
sequential sealed bids, meaning that the freelancer is unable to see other bids
in advance which eliminate the prospect of undercutting other
freelancers. A buyer can terminate the auction at any point in time,
either by choosing the bid, or cancelling the request (Ulrich , 2008).
vWorker
applications- Post A project
- Select
a non-disclosure if your project description is too sensitive
-
Set your own budget
-
Receive competitive bids from freelancers
-
Compare bids
-
Check freelancers reviews
-
Select the winning bid
-
Receive completed work
-
Pay and review your freelancer
And allows freelancers to
-
Search open projects based on specific types of technology
-
Search projects by expiration date
Key website features and advantages
-
Allows peer to peer review (allows freelancers to post ratings on customer, and
customer to post ratings on freelancer)
-
Escrow feature allows secure transfer of money (after work is reviewed, the
customer releases the money; if the freelancer is unable to meet requirements, and
the project may be cancelled)
-
Allows freelancers and customers to post any inappropriate behaviour, and has a
24 support team ready and available to receive input
-
Is the most user friendly website among other freelance websites
Vworker.com has become very competitive in
establishing itself as a reliable, affordable, and competitive force as a
freelance website in today’s global marketplace. It eliminates the prospect of
hiring based on geographical location; businesses often need assistance
tweaking the design, features, and functions of their website. Vworker.com is a
great way to find freelancers who are capable of delivering what they
desire. Another great feature of vWorker is that it has an open chat
room, where businesses can establish open communication with freelancers who have
placed a bid on the desired project; any freelancer who has placed a bid is
free to enter the chat room which allows the employer to get a free insight as
to how efficient the freelancer can be. There are two types of auctions
on the website distinguished as either open, or private auctions. The open
auction is available for all freelancers to bid on, while the private auction
only takes place with freelancers who have been selected for positive reviews
or credentials and are invited to bid. vWorker is a peer to peer website
that creates an online marketplace in which people can offer their human
capital to large and small firms in need of assistance. The platform allows
companies to attract freelancers in remote geographical locations who specialize
in certain tasks. vWoker gives employers the ability to post projects or
designs which are available for bid, either by companies or other freelancers
who could benefit from the proposed project. Vwoker.com assists
entrepreneurs who assume the risks and rewards of a proposed project, often
taking on a specialized task that needs attention in today’s changing
marketplace. vWorker creates a platform that motivates entrepreneurs or
freelancers to create useful content by allowing peer to peer reviews, which acts
as a performance indicator similar to that of a site like eBay where the
performance standard is based on feedback of the consumer. A negative feedback
can be detrimental to a freelancers goodwill; therefore, decreasing the chances
of an employer accepting a bid by that freelancer. vWorker acts in a very
similar manner, but unlike eBay this site does not require a company to build
up inventory in order for distribution to take place. It purely offers
freelancers to provide a service rather than a product offering, which
eliminates the cost of inventory, as well as decreasing the risk of a failed
product placement (Ulrich , 2008).
Strengths
- They are
genuine in making the payment.
- There is
no sign-up cost and there is no monthly membership cost. We can make any number
of bids freely.
- Their
message board is user friendly and we can refer the project progress easily.
And we can share documents and codes easily, and we can refer previous versions
of the code also.
- Email
notification/alerts about winning bid, nearing of deadline, fund release, bonus
payment and weekly status remainder is really useful.
Weaknesses
- Commission
is high comparing to other freelance sites. It is always 15% even when the
vWorker says that commission is 7%-15%. I have done more than 100 projects. For
all the projects I paid 15% commission.
- Risk of
account getting closed even there is no mistake from your side. In this case
your client feedback and affiliate efforts will become useless.
- Escrow
system is not safe as the vWorker may ask you to refund the released funds.
- Arbitration
will waste your time whether you are buyer or coder. And, it will give headache
to you.
- If you are
a buyer, the wrong arbitration decision will force the service provider to
create competition for you.
Odesk VS.
vWorker
Odesk allows
its workers to hide bad comments, which means that it does not have an honest
rating system. When workers on Odesk hide poor ratings it’s difficult for
a customer to assert whether or not work will be completed in the manner in
which they expect. At vWorker, there is no possible way of hiding any
rating whatsoever which creates a very even playing field for designers. Odesk
does not use the Escrow pricing system with fixed-costs associated with the
project taking place; the Escrow system put in place by vWorker is a
sustainable competitive advantage because it guarantees money transfer and
payment on hourly/fixed rates. Odesk does not guarantee money back either, if a
worker misses a required status report he/she can get away with it. vWorker
guarantees both hourly/fixed rates with a free arbitrary consultation as well
as expert advice if needed. Odesk also fails to offer source code protection,
where vWorker allows all available bidders to be ‘’chaperone enabled’’ which
creates a protection system that makes it very hard for a worker to pirate or
copy information from your source code. Although Odesk does have arbitration
systems put in place, they are based on whether or not the freelancer has
committed fraudulent activities whereas vWorker’s arbitration system is based
on fraud as well as whether or not the freelancer has met the expectations of
the employer. In conclusion, on Odesk it is very possible for an employer
to pay for work that is unsatisfactory based on the fact that the freelancer
has not committed fraud ("How it works ," 2011).
vWorker VS
Elance
Unlike
Elance, vWorker does not charge a monthly subscription fee or any bidding and
certification privileges. This means that for a freelancer who is
starting his career, he must pay subscription fees up front and assume short
run costs associated with starting his/her business. vWorker may charge higher
royalty fees, however there pricing system is based on loyalty and long run
revenue streams. For example, the more successful work that a freelancer is
able to do with vWorker the more long lasting relationships they will acquire,
and thus creates a long lasting revenue stream for vWorker, whereas Elance is
more interested in assuming fees not based on performance standards. Both
sites do use a system of trust by allowing the freelancer to work with them
safely by bidding a fixed price for the deliverables required. Elance also
charges an arbitration fee along with a complaint making it expensive to
exercise your rights as a freelancer. Elance charges anywhere between $99.99
and $199.99 for arbitration rights, whereas vWorker allows a free arbitration
process. An additional attribute that vWorker provides freelancers with
is a guaranteed enforcement that employers cannot stall the start of
arbitration, whereas Elance allows an employer to stall for up to 21 full
business days, which could be detrimental to the free cash flow of the
freelancer ("How it works ," 2011).
vWorker VS
Guru
Unlike
vWorker, Guru charges a quarterly subscription fee from $29.95 to $99.95.
vWorker and Guru are similar when comparing the escrow system, both guarantee safe
transfer of funds when a project is put in place; however vWorker offers a
weekly payment schedule, and Guru pays upon project completion. Guru also
has failed to implement per hour monitoring as efficiently as vWorker, where an
application on a workers desktop and webcam allows employers on vWorker to
consistently monitor progress. In addition Guru cannot offer a money back
guarantee for its pay-per-hour projects. A major flaw in Guru’s platform is
that they do not offer source code protection like vWorker does by implementing
a chaperon enabled feature. For arbitration purposes, Guru can tie up a
20 day delay for project funds, guru will also refuse a refund should one its
workers miss a deadline; at vWorker it is impossible for workers to stall or
miss a deadline ("How it works," 2011).
vWorker was previously known as
Rentacoder; an original freelance website that was known for specializing in
only the outsourcing of technology related tasks. In 2010 Rentacoder changed
their marketing strategy by rebranding their name to vWorker, the reason that
implementation of the new name came into effect was to fully utilize the
freelance market opportunity; today vWorker provides a market for graphic
artists, writers, translators, marketers, personal assistants and numerous
other types of workers in today’s economy. Their new name reflects the fact
that they do provide opportunity to freelancers in these various disciplines
and also reminds employers that they can use diverse sources of talent to fit
their needs. Changing the name to vWorker gave the platform the ability to
extend its reach to accommodate capable freelancers in almost any discipline.
The extension of their target market ties into the websites overall success;
the way that vWorker produces revenue is in quantity of work, they only assume
revenue when a transaction is completed while assuming the royalties of that
transaction. The market for freelancers is growing daily and the market simply
grew too fast for a brand name such as Rentacoder.
The Target market for vWorker.com is relatively small businesses
and companies incorporated that desire skills and services that extend beyond
the knowledge of the employer, as well as customers that recognize the
opportunity cost of employing a freelancer that enhances the external
activities of the firm. Freelancers are often very experienced and
capable of completing projects in a timely efficient scale. vWorker’s target
market has few limitations; it aims to target employers that wish to expand their
business by utilizing technological advancements and efficiency in order to
fully advance their outsourcing methods. A firm’s success relies on the ability
of its core competencies to be the horsepower; however, in order to expand
proportionately a firm may also have to outsource external operations to
fulfill existing technological demands. vWorkers platform is most
suitable for small, fixed-price jobs and many individual contractors (many of
them offshore) to work with freelancers
(Singleton,
2011).
They have been able to sign up a large talent market, which is almost
doubling each year; the markets make money on the specified payment services by
forcing a customer to pay all of their freelancers through their systems.
Projects on vWorker target individual users more so than any other freelance
website, this is shown by the fact that they do not offer package bundles. When
assessing the target market we must also take into consideration that
Vworker.com provides benefits to the buyers and not as much to the freelancers,
for example a project posting is free and no fees are charged to the project
owners, all of the commission fees are deducted from the final bid that is
accepted by the owner, which means that the freelancer is paying the entire fee
of the job.
Vworker.com
advertises on their website using slogans such as
“What could you do, if you could instantly and affordably hire the
best and brightest global talent?”
‘’How would you like to plow through your excess workload,
staff up instantaneously, or get a hand with personal chores...and do it
faster, better and cheaper than with traditional help? ‘’
They use
these slogans to directly attract the attention of Firms wishing to exploit the
opportunity of diverse talent that is both ready, and available. They use
these advertising slogans on the site to attract businesses that have
previously had to rely on local talent and experienced unpredictable quality
and costs that can be very high. They are advertising the cost benefits of using
professionals across the globe, having the ability to choose from a wealth of
experience levels, price points, and knowledge to find the right professional
for their task. The domain name itself Vworker.com can be reverse engineered to
be interpreted as ‘’Virtual Worker’’, the actual work virtual in this context
refers to a worker who is accessible from afar, meaning that vWorker uses
individuals from remote geographical locations across the world in order to
access the best possible talent pools for each individual task.
vWorker.com is regarded as the best paying
referral program through their affiliate program in the industry today; they
have three stages of compensation for websites that generate sequential amounts
of referrals through web traffic. The affiliate website program is
designed to strengthen the reach of vWorker’s target demographics. The program
pays a percentage of all referrals revenue generated. The three categories of
Affiliates are standard affiliates (20%), super affiliates (25%), and
ultra-affiliates (30%), they allow affiliates to steady increase their income
as well as successfully advertise Vworker.com to the freelance crowd ("How it works ," 2011).
They have also been advertised through Popular Tech websites such as Examiner.com, Globeandmail.com, thestaronline.com, starbulletin.com, insidedigitalinc.com (podcast reviews), webpronews.com, denverbusinessjournal.com, silicon.com, builder.com
After being directed to the site via other forms of advertising noted
above, any freelancer is able to view and post information on the Vwroker.com
blog and open discussion board. The blog also features inspirational case
studies of successful freelancers and how they have found Vworker.com to be a
suitable income supplement to traditional jobs. A great feature of this
blog is that any vWorker who is unsatisfied with arbitration or payment
scheduling is able to have his case publically reviewed and responded to
immediately. vWorker has implemented this system to advertise that they
have implemented very useful governance systems to every single user on the
site, they guarantee quality, and expertise in every aspect of business that is
conducted on their site. vWorker also advertises on Facebook, twitter,
LinkedIn, and on RSS feeds. The RSS feed allows vWorker to advertise job
postings with a live feed on desktops, laptops, and PDA’s which us a very
useful tool for freelancers to save time searching for job postings.
vWorker will continue to grow and
gain market share by continuing to stabilize itself as the most reliable online
marketplace for small companies in need of assistance. They have been able to
implement structural functions and core competencies on their site that present
the most suitable environment for companies to outsource tasks. We also
need to take into consideration the theory of transaction cost economics; this
theory is designed around whether or not a company should outsource work in
order to gain a competitive advantage in their field. Companies place very high
value on protection of their intellectual property, as well as source code
protection and vWorker has done a great job implementing ‘’chaperone
protection’’ making it virtually impossible for a freelancer to pirate or copy
source codes submitted. vWorker must continue to revolutionize the features of
their platform to influence a safe exchange of services; they have done an
excellent job with the features of their escrow system (guaranteed payment),
and pricing plans. In order to continue to grow and gain market share they must
continue to establish themselves as the most trustworthy platform to conduct
business on. Freelancers and companies will always exist; however, they will
always gravitate towards the most practical and trustworthy system available to
them.
In order for
a new platform to compete in this industry they must gear their advertising
campaign to influence trust in their platform. Trust within a platform
decreases the firm’s perception of knowledge risks. When a firm makes the
decision to outsource projects they are assuming the risks and rewards of the
knowledge they require; trust is considered to be one of the major mechanisms
associated with purchasing and outsourcing behavior (Lu, 2011). A blog
associated with the site is crucial for future success in any platform wishing
to achieve market share; public knowledge of problems that a platform is able
to address on their blog is a great way to advertise that the platform is able
to reduce risk of outsourcing. For example vWorker uses their blog to address
any issue regarding payments, and arbitration which gives them major advantage
over other platforms who keep arbitration issues separate. Using social
media platforms is another excellent way of advertising the effectiveness of
the given platform, where users are able to express opinions as well as compare
various attributes of different platforms and the benefits associated with each
platform. This also gives great input as to how an emerging site can
proactively address the problems and concerns associated with their
platform. The ultimate success of any future platform will result in the
ability to advertise as a trustworthy platform that allows a very controlled
exchange of services.
References
Affiliate . (2011, 08 06).
Retrieved from www.Vworker.com
Lorber , L.L. (2011, 05 11). Nine
essentials for success . Retrieved from http://www.entrepreneur.com/blog/page/18/
Lister, K.L. (2011, 01 08). Freelance
nation . Retrieved from http://www.entrepreneur.com/article/217195
Vanrest, M.R. (2010). “individual
characteristics and different forms of capital in the online freelance
marketplace”. 14.
Ulrich , U.K. (2008). Innovation
and the boundaries of the firm. Managing the Value Creation Process
How it works . (2011, 08 08).
Retrieved from http://www.vworker.com/RentACoder/DotNet/SoftwareCoders/HowItWorks.aspx?intTabSelectedId=2
How it works . (2011, 08
08). Retrieved from https://www.odesk.com/w/odesk_story?lnk=vhHIW&cMod=fWork
How it works. (2011, 08 08).
Retrieved from http://www.elance.com/q/hire-talent/how-it-works-for-clients/
How it works. (2011, 08 08).
Retrieved from http://www.guru.com/emp/HowItWorks.aspx
Singleton , A.S. (2011). Working
with talent markets – odesk, elance, freelancer, guru, vworker. 4.
Lu, B.L. (2011). Online sourcing:
investigations from service clients’. 4,
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