Outsourcing the eBay way: Web sites match users, contract programmers

Computerworld - Increasingly, small and midsize businesses are turning to eBay-like IT services brokers to hire technical talent for projects -- both within the U.S. and offshore.

Such users are seeking the same advantages that large companies hope to get through IT services deals: flexible workforces, lower-cost labor and access to the right skill sets for particular projects.

Using an online job marketplace was the direction that Giancarlo Fiorarancio took Betsey Johnson Inc., a New York-based chain of women's designer clothing stores with nearly 50 outlets, after he was hired as its IT director about nine months ago.

Previously, Betsey Johnson's store managers would contract with local IT services firms for upgrades and repairs of desktop systems and their networks. But that approach was costly, and the abilities of the technical help varied, Fiorarancio said. So he began relying on New York-based OnForce Inc., which acts as a kind of a middleman between corporate users and freelance technical talent.

Fiorarancio said that through OnForce's Web site, he can prescreen available IT help by geographic area, review the skills of prospective contract workers and see how they were rated by other customers. He can also offer to pay people different rates based on the job at hand.

The new approach has cut Fiorarancio's remote support costs by half, he said. And through repeated use of some freelance technicians, his company is essentially developing its own remote IT workforce. "I view them as an on-site extension of our IT department," he said, adding that as Betsey Johnson further develops working relationships with the hired hands, "they become even more valuable to me."

The kinds of services offered by vendors such as OnForce "have a disruptive potential" for U.S.-based temporary employment agencies and IT services providers that charge higher labor fees, said Gard Little, an analyst at market research firm IDC in Framingham, Mass.

But the job marketplaces may have their largest impact because of their ability to connect IT managers with offshore help. While Congress debates whether it should raise the annual cap on H-1B visas, global job-matching services such as one offered by Menlo Park, Calif.-based oDesk Corp. are showing that companies of any size can hire offshore IT talent to work on projects.

The shift of technology work to offshore locations, free of any H-1B constraints, is an economic reality that the Committee on Science and Technology in the U.S. House of Representatives began examining this week. Rep. Bart Gordon (D-Tenn.), the committee's chairman, opened an initial hearing on Tuesday by warning that "the best jobs may soon be found overseas."

But if it wasn't for access to offshore IT help, Aaron Smith wouldn't be in the position he is in today. Along with his wife, Smith operates a small company called Chiron Data Systems Inc., a developer of diabetes management software in Corinth, Texas. He has been using oDesk's online service to find development help and said he works most closely with a programmer in Russia who is paid $15 per hour.