OII Research Offers Insights for Fostering Enterprise Adoption of Online Labor Platforms

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This is the third of a series of posts reporting on recent findings of the Oxford Internet Institute’s (OII) iLabour Project. We first reported on the project back in September 2016.

The first two posts of this Spend Matters series covered the Online Labour Index and related data (here an here). In this post, we cover other OII research focused on enterprise adoption of online labor platforms.

This research was conducted and summarized in two OII blog posts by Gretta Corporaal, postdoctoral researcher in organizational studies at OII. Notably, Corporaal’s research includes “the stories of two Fortune 500 firms [which] successfully adopted and integrated online freelancing in their business models.” 

Online Labor Platforms = Innovation

In “Preparing for successful platform adoption: Part One” the focus is largely on understanding how the research findings on the adoption of innovation could apply to the adoption of online freelancer platforms in organizations. Some of the general conclusions drawn were that the actual adoption of these platforms — which are innovations — requires changes in how an organization views its workforce, as well as its approach to introducing and spreading the use of these platforms throughout the organization.

Corporaal reports that “implementation may require a change in organizational members’ roles as well as their work practices and routines. Implementing an innovation requires people who previously worked independently, to share information and coordinate their activities. Platform adoption may thus require establishing new work relations, roles, and routines that are likely to differ depending on which area of the organization is guiding the adoption and implementation process, and whereas firms aim for local or company-wide adoption.”

“While recognizing the benefits of online freelancing platforms,” Corporaal continues, “firms also experience their disruptive effect on existing organizational arrangements. Especially large corporations, such as the Fortune 500, have extensive processes and practices in place for hiring and managing their employees, contractors, and various outsourcing relations.”

Even though such change may represent a significant challenge, organizations can nevertheless succeed at adoption of innovations (including freelancer platforms) provided there is the right kind of preparation and adoption model.

“To ensure that people become increasingly skilled in using online freelancing platforms, firms are advised to intentionally organize for platform adoption, by fostering a supportive attitude and climate for implementation as well as creating a safe space for their members to experiment with platform-use,” Corporaal said.

For more details on the innovation adoption principles, refer to Part 1.

Successful Enterprise Adoption

In “Preparing for successful platform adoption: Part Two,” Corporaal shifts the focus from theory to practice by relating “the stories of two Fortune 500 firms, named “Hotel” and “India” (pseudonyms), that were successful in the adoption of online freelancing platforms beyond a pilot stage.

Hotel

Facing the challenge of engaging highly specialized skills and expertise, Hotel “recognized [it] had to rethink [its] strategy for sourcing talent due to a shift in worker demographics” and it realized that “digital technologies are changing the way work gets done.” Using online freelancers was seen as a way to address these challenges.

According to one of the participants in Corporaal’s research at Hotel, “. . . work is going to be done very differently in the next 10 years. It doesn’t necessarily mean that the 10,000+ Hotel employees today aren’t going to be 10,000+ Hotel employees in 10 years. It could mean that they’re leveraging an additional 10% of folks [online] to do work differently. The point is we’re going to have the ability to tap into this pool of very skilled talent in a way we never could before.”

India

Also facing the challenge of engaging the right talent as well as the need to rapidly conduct ad hoc projects, India, like Hotel, decided to turn to online freelancers as a way to address these issues.

For India, there were other issues regarding traditional staffing supplier sources that were unable to meet the time-to-fill requirements associated with many of Hotel’s projects. According to one of the research study participants at India, “The six-week sourcing process of agencies has fundamentally become a broken model because organizations don’t operate like that anymore.” A new sourcing channel was needed. By turning to online freelancers, India was able to engage the online talent and complete projects, in some cases, in as little as two business days.

Adoption Process/Timeline

Both Hotel and India started, logically, with a stage of learning about online freelancer platforms, but their processes unfolded somewhat differently:

Source: “Preparing for successful platform adoption: Part Two,” Gretta Corporaal, Oxford Internet Institute, iLabour Project

It can be seen that Hotel’s learning phase (months 1–3) included entering into an agreement with an online freelancer platform it selected. Hotel did not immediately allow the general organization to begin using the freelancer platforms in some kind of pilot. Hotel proceeded in a limited, incremental way, with select users in a controlled environment. In months 7–9, Hotel designed an internal program for online freelance adoption and designed an “experiment.” In months 10–12, the company conducted the experiment to “organize work with on-demand talent.”

By contrast, India spent months 1–3 learning the landscape and engaging different freelancer platforms in discussions to learn more about them. In months 4–6, a pilot program was started, after which a formal agreement with the platform was negotiated and entered into during month 7–9. In months 10-12, India worked with the platform to “customize workflows and develop scalable work processes.” By month 12, India was ready to organize a “kickoff event to launch the new sourcing solution” to a broader part of the organization.

In months 13–15, both Hotel and India were beginning to introduce the online freelancer program/solution to a broader part of their organizations. Hotel still needed to prove the benefits to the rest of the organization. India —which had not conducted a designed, limited experiment phase — had to do testing of the solution as a prerequisite to scaling up.

Despite the somewhat different paths they followed, Hotel and India ended up in the same place: moving up the program expansion/adoption curve.

Enterprise Adoption Takeaways

Corporaal’s research identified several things that both Hotel and India — sometimes differently — did to be successful in fostering adoption, as briefly summarized here:

  • Understanding the online labor platform landscape
  • Creating protected space for experimentation or pilot activities
  • Having executive level support to provide a no-fly zone and help to cross silos
  • Carefully designing experimentation and pilot activities:
    • Hotel conducted a 100-day experiment with 15 project managers in their innovation department. These project managers were handpicked based on specific criteria; each completed 10 projects on the platform to determine the best ways to maximize the value of using online freelancers.
    • India’s three-month pilot program began with two research teams using the platform, by the conclusion 13 teams — which included including software development, finance, accounting and human resource functions — were using it. The online freelancer projects were relatively well-defined and short projects (inside two days to two weeks).
  • Planning and securing sufficient internal resources to the initiative, including funding of the costs of experimenting/running freelancer projects
  • Leveraging the experimentation and pilot programs to create project managers to promote and support expansion across the organization
  • Involving stakeholders to support successful adoption — especially governance functions like legal, finance, human resource and procurement

Perhaps most important, both Hotel and India did not approach the initiative in an ad hoc manner. Rather, they approached it as a longer-term process that required learning, preparation/design, suitably paced and limited process phases, resources and executive-level support.

Conclusion

The OII research into enterprise use of online labor platforms at two Fortune 500 companies provides some valuable insights into how such adoption can be successfully fostered. Key success factors include learning, preparation, design of limited starting activities, adequate resourcing and organizational support. These findings are similar to — and seem to confirm — those we have produced through our own research activities (see Must-Know Practices: How Enterprises are Adopting the Latest Contingent Workforce & Services Technology Solutions and The Future of Digital Sourcing Channels for Labor and Services: Supply Side or Demand Side Driven?).

The enterprise adoption cases also implicitly raise a question we have asked explicitly: What will be the role of contingent workforce and services procurement in the enterprise adoption of online labor and platforms?

The OII research cases suggest that procurement is an important stakeholder to be involved and provide support, but much less a driver of adoption by developing a new online labor sourcing. In the cases, the adoption programs are not driven by procurement but rather from other areas in the organization (something we have consistently observed). At the same time, we know of a number of enterprises where procurement can be an early experimenter, often in partnership with HR or some business function (such as IT or marketing).

Whether taking such a leading role will turn out to be possible for some innovative procurement organizations remains to be seen. But at the very least, procurement must be prepared to join in as a crucial stakeholder that can provide support in various ways, such as fully implementing and bringing management discipline to the creation of new supply channels.

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First Voice

  1. Rich Gardner:

    Great piece, Andrew, and quite consistent with our own experience.

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