Freelancing vs. Crowdsourcing: Should Enterprise IT be in the Talent Management Business?

February 25, 2014 Appirio

With the recent merger of oDesk and Elance, boasting a community of about eight million freelancers, it appears that the online talent marketplace is booming.

“For businesses hiring people for one-time projects in areas like software development, website design, customer service and translation, there is no longer a need to stay local. A company in New York can arrange for someone in Uzbekistan to create its website, for example. And chances are that the Uzbek worker will be willing to work for much less pay than a comparable one in New York.”NY Times


Taking a step back, this growth is a very natural and expected evolution. Taking a proven model like contracting, then adding the scale and automation of the internet to create an accessible talent pool of 8 million workers, just makes plain sense.


“ODesk created its online marketplace in 2005, and the company has grown quickly since then. The number of employers billing on the site per quarter rose by more than 900 percent from 2009 to 2013; in that same period, the number of working freelancers per quarter rose about 1,000 percent.”NY Times

Finding That Special Someone

The internet-enabled freelancing model is without question a powerful one. By removing the corporate overhead involved with talent search and talent payment and adding the scale of the internet, businesses can focus on finding the right person for the job. The three-step “get work done” process is a common one:

  1. We have a problem

  2. We need someone who can solve the problem

  3. Based on “X” we believe this person can solve the problem

“The quality of work produced will always be an issue for online marketplaces, wherever the workers are based. That’s why the ratings and reviews on the sites are so important.” – NY Times

For certain tasks, contracting with a freelancing organization can yield incredible results. But is it the best work model for enterprise IT? How much should enterprise IT be focused on that looming “X” above? Is enterprise IT in the talent management and referral business, or in the “let’s build it fast and well” business?

[button link=”” color=”orange” size=”big”]Download: 6 Differences Between Crowdsourcing and Outsourcing[/button]

A Song and a Dance…

To sum up, a freelancing model is still a 1:1 relationship between business and talent. If you’re looking to get work done the freelancing model requires that you choose a contractor up front and provide compensation for the worker’s time. While there’s scale in numbers (about 8 million numbers) there is no cloud-like scale in the model.

Beyond just scale, the model puts a tremendous amount of excess work on both the business entity and the freelancers themselves. Both the business and the freelancer take on a fair amount of risk and have to perform a certain choreographed and time wasting dance to engage each other. After engagement, failure on both sides is still a real possibility.

We need to change this sort of thinking.

Getting back to the basics – enterprise IT needs to get work done. Talented experts just want to do the work they love. Anything that gets in the way of that is wasted time, money, and effort.

…and a Little Romance

Hypothetical business, “Widgets Incorporated”, wants a new simple website re-designed and built. There are two internal Widgets Inc. employees who are in charge of the task – the Creative Director, and the Web Designer/Developer.

With access to a competition-based crowdsourcing platform, the Creative Director begins launching challenges immediately. The first challenge is the logo design, along with basic wireframes for laying out content on the homepage. The competition environment removes any necessity to designate a contractor upfront. The challenge itself, the requirements and guidelines for participation, as well as the competition between community members, removes/becomes the vetting process. The Creative Director and the Web Developer really don’t care who does the work, their only concern is output and they only pay for output. For once the result is the priority, not the talent.

As work progresses, the Creative Director and Web Developer work together act as architects, taking the pre-built pieces and constructing the final product.

The three-step “get work done” process changes to a two-step one – minus the song and dance:

  1. We have a problem

  2. Let’s post a challenge

Love the Community

On the other side of this work equation are community experts, like Abedavera (designer) and Alethor (programmer). By monitoring the types of competitive challenges they’re experts in, these and other similar community members can avoid the song and dance and simply work on the projects they love.

Since the model is competitive they won’t win every single time, but they’ll win plenty if they work consistently and effectively. All competitions will be learning experiences in their field and chances to showcase their skills. They waste no time trying to “sell” themselves, their current work and past achievements are on full display and their efforts are rewarded, not their time or self-selling ability.


Previous Article
7 Steps to Ensure CRM Implementation Success
7 Steps to Ensure CRM Implementation Success

Many organisations fail to gain the real value from their substantial CRM investments. Despite mapping out ...

Next Article
Finance Strategy: Transform Your Processes
Finance Strategy: Transform Your Processes

Previously, we discussed how “Finance Transformation Begins with a Vision”.  We then provided the model to ...