My first experience of virtual businesses was in the late 1980’s when the company I was with had many North American direct marketing clients who outsourced their entire Australian operations to us.
In those days, offshore outsourcing was a function which you facilitated only through big established companies as offshoring was very much at an embryonic stage of development.
Since then, we have seen the emergence of many outsourcing / freelancer portals and a business mindset where suppliers are no longer measured purely on size or location.
Today, the outsourcing sector is serviced by thousands of small companies, many with only 1 or 2 staff who are facilitating a broad range of business-related activities through offshore based VIRTUAL TEAMS.
The services they provide include graphic design, web development, customer care services, marketing services, and much more.
Where the work is done does not matter. What is more important is that your point of contact is someone you believe has the expertise to deliver what you require – on time and on cost.
Quite a few individuals (and companies) you see on freelancer portals operate in this manner. Even though not new, it’s a growing trend with new players entering the sector almost daily.
The perception by the end user is that they are always dealing with a company rather than an individual and so this infers continuity and reliability.
There are three ways to set up a virtual team:
Option 1: Use freelancers on an “as needed” basis
This takes a bit of work as you may need to test 20 or more freelancers before you find one who can handle your requirements and you have confidence in.
The downside from an offshoring perspective is that freelancing in many countries is a part-time function and so scheduling can be a major problem.
Continuity and reliability is the major drawback as many freelancers are available only until they can secure a full-time role as explained in 7 Keys to Successful Offshore Outsourcing.
Option 2: Develop your own virtual team
This is a preferred approach for many as it overcomes potential quality, continuity and reliability issues which you have with using freelancers.
It also ensures focus on YOUR work and so scheduling is not a problem.
There is an investment involved – but that investment is much lower than creating your own team in a western market.
Example: The front end graphics for many of the movie trailers you see on the Internet are handled by a virtual team of 10 skilled designers in the Philippines. This is a dedicated team who are paid a monthly retainer to perform this work by their USA-based client. The contract is EXCLUSIVE – this team cannot do any external work. The designers are very happy as they know they have a firm contract – the equivalent of a full-time job – and can focus on what they really enjoy doing without worrying about where their next paycheck will come from.
By pursuing an approach such as this, you can attract the best of the best, especially if the base retainer you offer is higher than the designers would earn elsewhere (e.g. instead of earning $500 per month, they earn $1,000 per month).
The best way to set this up is to appoint a local recruitment firm to seek out the best staff for your requirements.
Option 3: Partner with an established operation
I have tested all iterations outlined here plus others and found this is by far the best option.
Yes, using freelancers is cheaper as many “average” freelancers charge very low fees. (The better ones – the ones you want on your team – know the value of their skills and charge commensurately. )
There are three major benefits with this approach:
- Continuity and reliability – companies are not dependent on one client and therefore likely to be around much longer than freelancers (there are exceptions).
- The best talent – companies offer full time employment which , in most offshore markets, allows them to attract the best talent.
- Less hassles – companies look after issues such as recruitment, staff benefits, staff training , payroll, etc – the very things you want to avoid if you are a small operation as your focus should be on sales rather than administrative tasks.
Finding the right company is the big challenge…
Option 4: Build Your Own Offshore Operation
This is an option many companies start with. However, after getting an understanding of the local business scene, most turn to one of the above options.
Still, if you have a dedicated application which demands a dedicated team, this option is often the best.
Providing services on a virtual basis is something any business can do. It’s an instant business extension, one which can drive more customers to you, allow you to value-add existing services, and give you a competitive edge.
Whilst I personally recommend Option 3, the route you pursue is up to you…