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Person to person outsourcing

Manisha g (Ca final) (153 Points)

23 March 2009

Hi,

Does anyone have idea about PPO i.e. Person to person outsourcing ?

Waht are its benefits & disadvantages :

Its Urgent

Thanks

Manisha

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2 Replies

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 24 March 2009

Person To Person Outsourcing, better known as PPO has been in existence forever and if you think long back since the time of the simple barter trade system, where two Individuals usually exchanged services or products, for which there was a mutual demand and supply with the individuals.

In modern world, one side of the balance has been replaced eventually by money and the term PPO, "Person To Person Outsourcing" now refers primarily to services which an Individual Entrepreneur or a Small Medium business, is willing to outsource to achieve their own business efficiency. In the overall multi-billion$ outsourcing industry PPO currently still accounts for $250 Million dollars* and with the rapid strides in Globalization because of growth of internet penetration (Technology advancement, Rise of Consumer Internet & Web 2.0); PPO is touted to become a $2 billion industry by 2015*, if not earlier. (*Data on current & projections taken from Evalueserve, a global research and analysis firm)

Moving onto some more figures (courtesy Evalueserve research), at the moment, there are around 5,00,000 vendors and freelancers from various low-cost countries in the PPO space such as India, Philippines, Russia, Ukraine, Romania, China, Vietnam, even Thailand & Sri Lanka. Interestingly, out of these approximately 30% are from India and PPO generates revenue worth $65 million annually. It is expected to touch $500 million by 2015 for India, which quantifies into an eight-fold increase in nine years at a cumulative growth rate of 26%. Although still in its infancy in India, PPO will take another 2-3 years to completely establish here.

PPO till date follows 2 business models.

Direct interaction model: An individual client/buyer signs a contract directly with the vendor who in turn either hires people on a full-or part-time basis or sub-contracts the job.
Online Services Marketplace: An individual client/buyer posts his requirements for a new project in the online marketplace, which is actively participated upon by enrolled subject matter experts, freelancers to showcase their skills & experience and vie for these projects for a self quoted cost. The buyer uses the information available to make a judgement on quality and quantity against the requirements and selects an eventual vendor/freelancer to provide the service.

According to research estimates conducted by Evalueserve, there are over 90 online market places currently existing and more being launched everyday as a clear testament and sign of growing people power.

TYPES OF PERSON-TO-PERSON SERVICES BEING OFFSHORED

Online tutoring
Website development
Graphic design
Database and other software development
Writing and translation services
Accounting and tax preparation services
Architectural, home and landscape design services
Marketing and sales support services
Creating drafts of legal documents
Administrative services

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Manisha g (Ca final) (153 Points)
Replied 24 March 2009

Thanks Prakash,

But u had given information which i already know.Can u add detail on persons (if u know) who are involved in PPO?I require real experience from someone so that before entering into PPO i will get prepared .

Manisha