Preparing IT for the ‘gig economy’

In the next 10 years, companies will regularly tap into a vast pool of independent contractors to get work done on a crowdsourced, pay-as-you-go basis, according to research supported by the Society for Information Management’s Advanced Practices Council.

With crowdsourced labor, the enterprise buyer makes detailed work requests at a crowdsourcing platform – such as TopCoder, Upwork, Taskrabbit, uTest, Crowdsource.com, Freelancer.com or Amazon Mechanical Turk – which connects the enterprise to independent contractors working from their homes and offices all over the world. “The size of this labor pool is staggering,” says the report, “Governance of Enterprise Crowdsourcing,” by academics Erran Carmel and Evgeny Kaganer.

Like cloud computing, labor crowdsourcing “offers enterprises the benefit of elasticity, thereby facilitating ramping up and down,” the report says. But the CIO will need to become much more involved in developing the IT infrastructure and APIs for this new labor scenario, the report’s authors say.

“Because the enterprise buyer must create proprietary middleware to provide access and ensure security, the CIO should play a central role. Unfortunately, CIOs have not taken on that role at many of the firms studied,” the report says.

The crowdsourced labor model is already being used by large U.S. companies such as Walmart and eBay, the report says, and will be “a key factor in changing or even transforming labor markets in the next 10 years.”

But as the crowdsourcing operation grows, the process needs to be governed much like an IT outsourcing relationship. “Managing the crowd presents significant challenges related to assembling appropriate crowd participants, managing them, and addressing labor compliance issues,” the report says. In addition, the work must be broken down into small tasks that are carefully explained with “bullet-proof instructions.”

The Advanced Practices Council, a program for senior IT professionals, fosters independent research on member-chosen topics. Carmel is the dean of American University’s Kogod School of Business in Washington, D.C. Kaganer is an associate professor at IESE Business School at the University of Navarra in Spain, where he teaches MBA and executive courses on digital transformation and IT strategy.