Freelancing on the Internet

The advent of the Internet has created new opportunities for freelancing, particularly for software developers from countries with low average salaries. A number of websites have become bustling marketplaces for farming out software development projects to freelancers at rates GeneRally considered rock-bottom by Western standards. Such websites typically provide a convenient central forum for posting job requests, rating and documenting history to judge potential buyers and sellers, an escrow system to protect participants from fraud, and arbitration in the event of disagreements between the coder and the buyer. The system for setting prices is usually organized as a reverse auction.

Compared to offshore outsourcing

This kind of Internet-based outsourcing can be thought of as a small business variant of the wider business practice of offshoring. Larger corporations may set up their own subsidiaries in other countries. Small businesses, as well as individuals requiring software, find it convenient to get projects done through Internet freelancing sites.

Inherent problems and implications for businesses

Internet freelancing raises many issues for businesses involved in outsourcing some of their work. Protection of intellectual property is one major issue. There is little realistic recourse for a company in the event that a coder from another country should publish or resell the code developed for them. The practice of Open Outsourcing completely side steps this sticky issue by explicitly stating that the code is available to all. Other problems may include difficulty in fully communicating the necessary specifications of the project at hand, as well as The Risk of the coder failing to complete the project on time, potentially jeopardizing the buyer's business plans.

Therefore, the projects typically posted on freelancer websites would optimally not represent the core competency of the buyer company. Rather, they would constitute the more mundane and labor-intensive tasks that are much easier to describe accurately in writing than to implement in a complete and polished manner. Outsourcing specialized tasks for which no in-house expertise is available is another good reason to seek a freelancer. Some programmer out there has solved a similar problem in the past, and that hard fought knowledge can save the customer a lot of money in internal training and discovery processes.

See also

• Telecommuting
• Consultant
• Freelancer
• Offshoring
• Outsourcing