Outsourcing has long been an option for large companies to subcontract work. But the creation of web-based platforms like Elance has brought outsourcing to smaller companies. Organisations that are not looking to outsource large-scale contracts, but smaller projects, can now take advantage of global networks of professionals, quickly and easily.

This growing trend of 'the human cloud' is a large and powerful network of freelancers and contractors, all operating online. By working in the 'human cloud', organisations can outsource aspects of a business and can reduce costs and overheads, freeing up resources that can be invested in business development and company growth.

Investing in company growth is a risk

SMEs often require specialist personnel to help get a company off the ground and this means employing experts in specific areas. The challenge for smaller companies is to decide whether to invest heavily in a large work force to handle all aspects of a business or not.

The Advanced Child Academy (TACA) is an online start up that provides parents with recommended learning materials and courses to enable them to help their children have a head start in their education.

TACA wanted to grow an idea into a business, quickly and with only a small initial investment. The TACA team knew that employing a large workforce just wouldn’t be possible and yet the company needed a wide range of skills and expertise to help get the business off the ground.

Neil Asher, founder of TACA, said: “When starting the company we created a budget and a business plan. Part of that process was to look into how much investment was needed to get the company up and running. Before we looked into outsourcing the risk was too high for us to invest in the company."

Using the human cloud

By outsourcing, a company like TACA can minimise the risk of large investment in permanent staff. Specialists can be hired for short periods of time to provide advice and expertise.

In the instance of the TACA, outsourcing was a potential solution to these problems but the company was unsure how best to recruit and manage a team of freelancers that could help on specific tasks and projects.

Elance immediately seemed like the ideal recruitment tool for TACA as it would allow work to be outsourced online and the company would be able to manage expenditure by hiring freelancers on short-term contracts.

“Suddenly we had access to a very powerful resource that would allow us to hire the right people for the job, no matter where they were in the world. We could now hire and manage a virtual workforce all through the platform which gave us incredible control over costs and the work itself,’ explained Neil.

A flexible approach

The online employment process means companies like TACA can employ flexibly. Expert advice and sales initiatives can swallow up significant amounts of budget. Outsourcing minimises this risk as you just pay for the time required. Should a growing company want to create a specific sales initiative, it can take on a sales rep for a period of weeks. Once this period is complete it can assess and make a decision on whether to continue with the contract.

For TACA, the results have been staggering, as Neil explains: "By building our business model entirely around outsourcing online, we have been able to reduce our costs by 80%. This not only meant that the creation of the business was financially viable, it freed up investment that could be used in other areas of the business. We redirected resources into marketing and advertising, improving the company’s chance of success.”