Add a New Word to Your Vocabulary: PPO

First came BPO (business process outsourcing) for back office (billing, payroll, purchasing, records) and front office (customer service, tech support) services, and then came KPO (knowledge process outsourcing) for higher-value-added forms of BPO services: market research, legal services, patent and copyright services, software design, engineering, and R&D.

Now comes PPO (person-to-person outsourcing), which allows individuals, households and small businesses to take advantage of a globalized supply of freelancers, who are often willing to work for a fraction of U.S. wages. See my previous post yesterday on "Personal Outsourcing."

From the article "After BPO & KPO, Now Comes PPO" on Rediff (India's version of Yahoo!), here is how the PPO market works:

Freelancers around the world providing PPO services enroll in an online marketplace (like Guru.com), and pay a monthly fee plus a fixed percentage of the revenue for the projects they win. When an individual client posts requirements for a new project, the marketplace communicates these opportunities to the selected freelancers and requests proposals to be delivered to the client.

The client then awards the work to the appropriate vendor depending on price (on a per hour or a fixed cost basis), delivery time and a quality score (feedback rating, like Ebay) provided by other clients who have previously used this vendor.

The online marketplace typically earns 5-15% of the contract price in return for an assurance of a minimum service level from the vendor, thereby reducing the risk for the client.

For example, click here to see a list of freelancers available worldwide through Guru.com for architectural illustration services, with hourly fees ranging from a high of $70-75 (U.S.) to lows of $8 (Philippines and Uruguay) to $10 (India and Romania), and lots in between ($20 in the UK, $30 in Australia, and $40 in Spain). Notice also that there are many freelancers in this category IN the U.S, so there is always the option for "onshore outsourcing," as well as "offshore outsourcing," for PPO services.

For international patent and trademark legal services, hourly fees range from $20-25 in India, to $300 in the U.S.

For landscape design, hourly fees range from $8 in India to $26 in Spain and $95 in the U.S.