BPOs worried as on-demand workforce start-ups boom

Traditional BPOs with hundreds of executives may soon face a challenge from a new breed of start-ups offering on-demand workforce. Players like Squadrun, GigWalk and Task Rabbit are challenging the traditional BPO model by making outsourcing as simple as shopping online.

There’s no training that needs to be provided by clients and a workforce of over 100 people can be hired within minutes.

This is proving to be a boon for e-commerce companies that see huge spike in consumer interactions during flash sales. Millions of new product listings are added during a sale period, which makes it impossible for online retailers to hire enough people to manage those listings. This is where players like Myntra and Snapdeal are adopting on-demand distributed workforce as against opting for traditional BPO services.

Take for example, Snapdeal, which has over 35 million product listings and often sees sellers adding over a million listings in just one day, especially around special sales.

“For quality and compliance, we need to do human validation of listings to avoid pornography and other offensive material and maintain quality standards. We were running into an issue where turnaround time for sellers was more than 24 hours and that’s not something we were proud of. But with the help of the distributed workforce, we were able to reduce it to less than four hours. Now some of the listings are completely outsourced to Squadrun,” said Viraj Chatterjee, Vice-President (Engineering), Snapdeal.

“The problem with the BPO sector is that you have a set of trainers and the quality is still a suspect. Even internal agents that we have are attuned to a BPO mindset,” Chatterjee said.

He said error rate in the distributed workforce environment has come down drastically. “The error rate with Squadrun was far lower because they have a task that is broken into various missions and every mission has selective criteria such as, ‘is this happening – yes or no?’, ‘does this image have a white background – yes or no’ and so on.”

Distributed workforce providers such as Squadrun claim to reduce cost of workforce to just 30 per cent, by hiring thousands of housewives and people who have 2-3 hours spare in a day. These contractors typically earn anywhere between ₹2,000-12,000 a month.

Squadrun, backed by Google India head Rajan Anandan, SlideShare founder Amit Ranjan and Zomato founder Deepinder Goyal, already has 4,000 daily access contractors and overall 40,000 people signed up.

“As a business, you need things that are on-demand. With a few clicks, you can setup an outsourcing centre like a cloud and they can scale up and down as per their requirement,” said Apurv Agrawal, founder of SquadRun.

With almost unlimited workforce available on-demand, companies say they are now able to do things they weren’t able to do before.

“With the internal workforce, we used to add limited key attributes such as the size of the shirt, colour, etc. But once you have a large distributed workforce that is on-demand, we could go deeper such as what is the type of print, what is the cut of the shirt, etc,” said Shamik Sharma, CTO of Myntra.

On-demand workforce companies are still relatively new and may not pose an immediate threat to the BPO industry as they have so far restricted themselves to simple back-office jobs that don’t require much training.

“Distributed workforce becomes harder when you have complicated issues. We are currently using simple things such as image-tagging, wherein any errors can later be detected by our internal team and eventually eliminated,” Sharma said.

However, with voice-based offerings recently added on SquadRun, more and more outsourcing work can go the on-demand way. “We started our voice-based services in February and it is seeing good adoption. We’ve started with simple things such as calling back customers who couldn’t complete an online payment and taking them through the process, or calling people to validate a database,” Agrawal said.

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