Next Big Thing: Social Media Outsourcing (SMO) (Part 1 of 2)

Quick Summary: Read why Social Media Outsourcing (SMO) will be the next big business opportunity for India after Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO).

- X – X – X –

Social media practitioners often talk about it in cryptic “conversation is an art form” terms, but you can break down the social media delivery process in six discrete steps that correspond to the oft-quoted Listen -> Understand -> Engage model:-

1. Data collection
2. Data mining
3. Data analysis
4. Insight delivery
5. Consulting
6. Solution delivery

Six Step Social Media Delivery Process

If you look hard at these six steps, you’ll find that many of them are driven by dynamics that make them very susceptible to outsourcing –

The Case for Social Media Outsourcing

While the details are best dealt in a white paper, or a business plan another post, here’s a summary of what steps in the social media delivery process are most susceptible to outsourcing –

- Data-collection and insight delivery will involve a one-time process set-up, after which they’ll be more or less automated via crawlers and dashboards respectively.

- Local expertise and relationships will continue to be important for consulting and parts of insight delivery (client interaction) and solution delivery (client interaction, design and B2B community management).

- Man-hour intensive parts of the social media delivery process, like data mining (basically content tagging), parts of data analysis and parts of solution delivery (coding and B2C community management) will be outsourced to countries that have a low-cost web-savvy workforce with a good understanding of the language.

I didn’t get any firm numbers for the size of the global social media business, but most analysts seem to agree that it is the next big thing for businesses.

I did get some firm numbers for the business process outsourcing industry. The global BPO industry is expected to grow to $230 bn by 2012 with $50 bn of it coming to India only (Nasscom-Everest study).

How much of that $230 bn will be social media outsourcing? How much of that $50 bn will be social media outsourcing?

Do you agree with me that social media outsourcing will be the next big business opportunity for India?

Published on March 11, 2008 in Tags: , , , , , , , , , , .. View Comments
  • rdeiss
    I'm on the same page with you, and I really like the way you broke the 6 steps up. Using this method could really produce an effective social media manager.
  • @morganpolotan: I am a big believer in automation, but you can't really automate the understanding of social context.
  • Interesting post. I agree with you that steps 1-5 of the social media delivery process can be outsourced, as it doesn't involve owner interaction. Only step 6, "engage" necessitates the owner or person from said business to interact with the social media community.

    What I wonder is how much will be automated by software, and how much will be outsourced. I work for Hubspot, and our software does steps 1 - 5 automatically with no need for outsourcing. Granted, our product is tailored towards small to medium sized businesses, so large corporations may be the main drivers of social media outsourcing in the near future. Labor in India is cheaper than labor in America, but computers are cheaper than both.
  • metatarcus
    this is a great breakdown of the SMO process, i am with you on the promise that this might be huge on the condition that corporates will turn to social media as a more cost-effective solution during the downturn.

    u shld have seen this already but just in case u dun, this link might validate your stand: http://www.webguild.org/2008/10/india-making-mi...
  • @Santosh: We are at the beginning of the social media gold rush.

    No one has all the answers posed by social media and all of us will try to get our hands on whatever (answers/ authority/ accounts/ money etc.) we can.

    As you said, over time, standards and business models will evolve, people who know what they are talking about will stand out, and sanity will prevail.

    Till then, we'll collectively and individually search for the answers.
  • Hi Gaurav,
    Agree with you it's a special job and it would be much beneficial for businesses to outsource it. But I am really worried about agencies or professional who project themselves as new media or social media experts in India.

    I have come across people in their 20's, just playing up with wordpress and fishing out in the market to offer their advices on new media, viral, social, web 2.0 strategies.

    The outsourcing model when really comes into effect - we will see much more sanity in this market.

    Also liked your post on problem with social networking.

    Have a great day
    Santosh
  • @Sudhanshu: You have raised some valid concerns. Let me respond to them one by one.

    - How robust is the social media phenomenon?

    The basic principle here is that people will continue to talk about brands in one form or another. Conversations may take place on the PC web or the mobile web. Conversations may take place on blogs, micro-blogs, social networks, forums, videos, podcasts or another totally different platform. But conversations about brands will only increase and, along with it, the need to make sense out of it.

    - Why don't we automate monitoring?

    While natural language processing, machine learning and Bayesian filtering algorithms are becoming increasingly more sophisticated, computers are not great at sensing context and sentiment. Most experts agree that a layer of human intervention will continue to be important in the foreseeable future.

    In any case, I'm not only talking about outsourcing monitoring. I'm also talking about outsourcing business-to-consumer or B2C community management.

    Like Keith Pardy, Senior VP Nokia Strategic Marketing said at the WFA/ IFA Effective Consumer Engagement conference at Mumbai recently:-

    Social marketing intelligence will be the black hole of the twenty first century. There will be too much data and the key will be to make sense of it.


    Social media outsourcing will play a significant role in making sense of conversations related to brands at a competitive cost.
  • Gaurav,

    I quite like you posts. It really calls for a lot more debate.

    I was just considering the pitfalls and was thinking that since it is analysis you're mostly talking about, have you considered that people can automate the whole process.

    Anyways, the bigger question is that how long would the social media phase survive before the world moves on to something new.

    Would love to hear your comments on that.

    Cheers
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