Introduction
The notion for a company considering outsourcing products
and services is straightforward, but for the user this poses problems in different
realms according to the type company they’re under. TopCoder centers on
producing software for demanding enterprises such as GEICO to others wishing to
pay a low fee for the company to develop a program solving their issue. The
business CEO, Hughes, managed a technology based company, Tallan, before
starting TopCoder and decided to assess his core past issue of hiring qualified
programmers for the company. TopCoder influences other companies to give their own
clients, from around the world, access to competitively program software resolving
a problem.
Business
Development
TopCoder began with Hughes employing 225,000 clients from
developing or 1st world countries. Hughes planned to grow his amount
of qualified programmers to obtain revenues of $200 million yearly. The
software company chose to take a competition-based development plan. Clients
would only earn income from winning competitions reviewed by TopCoder peers and
how they were ranked on a monthly basis. Hughes initially selected to make the
availability of projects open to These
clients would then be attributed to different parts of the software development
structure such as the architecture, component design, component development,
etc.
Other program models, for instance AirBnB or Lyft, struggled
primarily with incorporating the general public users to employ their service.
Logically, reaching out to the masses for their consent in satisfying a need is
complicated. The perplexing inception of success noticed by a business owner in
this industry field was troubling. While the service need was clear, customer
relations didn’t abruptly shift for a company to observe high profits immediately.
The employer’s client, however, would be more concerned with their own salary
before the company’s.
Outsourcing
The world has remarkably adapted to the rise of computers
and the internet. Due to these and other technological devices like cellular
phones, communication alters for people to speak to one another regardless of
their location. Outsourcing is a major process of concern regarding businesses
and the global population from its effects being positive or negative.
Considering TopCoder from the client’s perspective poses
several definite questions. First, how returns are generated equally for newly
admitted members against the long-established, highly-ranked competitors.
Second, can TopCoder describe in detail how competition winners are selected
and whether or not the company asking for the service reviews it?
TopCoder
Resolutions
TopCoder hasn’t treated the two previous questions
formally. With regards to the payment of programmers, 80% of the total prize
money is attributed to only 5% of the business’s employees. The business
refined this action only by preparing a ‘Digital Run’ monthly ranking profit
bonus to programmers, but this still doesn’t solve the issue. Wu Yanbo, a Chinese
programmer mentions how he is paid adequately on a monthly basis for working on
projects in his free time, but those living in other regions should choose a
different form of work for income collected.
The second is critical to clients reserving further
projects to be completed by TopCoder. The client approval percentage to resubmit
work to the business is impressive at 82%. However, for a new client unsure
about releasing their issue to a third-party, TopCoder should apply further
description as to how competitive programs are reviewed not only by their
staff, but also qualified client personnel. The urgency to conclude this inquiry
allows clients to continue challenging other problems such as the security of
releasing their problem to another party.
References:
Lakhani, K. Garvin, D. Lonstein, E. (12, May 31). TopCoder
(A): Developing Software through
Crowdsourcing. Retrieved Feruary 28, 2016, from Harvard
Business School.
Gee, J. P. (n.d.). The anti-education era: Creating
smarter students through digital learning.
Tanz, J. (14, April 23). How Airbnb and Lyft Finally Got
Americans to Trust Each Other. Retrieved February 28, 2016, from
http://www.wired.com/2014/04/trust-in-the-share-economy/
Tried adding to Jordan's post, but kept on getting an error in character count exceeding 4000.
ReplyDeleteI answered this question too and I definitely agree.
ReplyDeleteAs a client of TopCoder what would your main areas of concern be with this type of outsourcing? Has TopCoder done enough to overcome them?
As a client of TopCoder, my main areas of concern with this type of outsourcing would be the limits that are placed upon me during these contests. Even if TopCoder did all of a company’s internal development work, the company still needed to have an internal staff to integrate the deliverable into the client’s existing systems, review the code for security issues, and adjust and fix code as systems changed over time. In some contests, TopCoder clients also spent time evaluating ideas and approaches from multiple winning. Another ongoing issue for clients was finding the right types of problems and providing the appropriate amount of problem detail for the TopCoder community. As Keith Moore, a TopCoder client and former senior vice president at LendingTree.com, described it, “You want neither too much nor too little detail. You do not want to quell innovation but also want a solution that makes sense in your system.” Clients discovered that contest participation decreased if they were unclear about what problems they wanted to solve or presented problems that were too complex or vast in scope; in those cases, the TopCoder community struggled to produce an acceptable solution. Clients also found that community members worked best when contests lasted less than two weeks. If projects took too long to complete, contestants would lose interest and not make submissions. TopCoder managers inevitably made decisions that sometimes disturbed and upset the TopCoder community. For example, facing a very difficult economic environment in the summer and fall of 2008, TopCoder reduced the contest prize amounts, cut payments to peer reviewers, and reduced the number of algorithm competitions, a move which made many programmers leave the TopCoder community. With the lack of programmers, TopCoder would not be able to produce high quality solutions for its clients.
TopCoder has done well to make sure that there is integrity when producing this code and paid close attention to establishing community norms. As contest administrator, the company has had to maintain the highest standards of contest integrity, fairness, transparency, and quality. TopCoder personnel strictly monitored competitions and tolerated no form of cheating. Community members who peeked at other competitors’ solutions, shared ideas during competition, or used unauthorized code were immediately eliminated from the contest. Often they were kicked out of the community entirely. If any uncertainty or disagreement arose about which competitor won a particular contest, TopCoder would spend extra money to re-run the competition. TopCoder also guaranteed complete contest transparency by storing all contest and competitor statistics, peer reviews, and solutions in a data warehouse. The data was publicly available to registered community members, accessed via the TopCoder website. Integrity and fairness also extended to TopCoder‘s corporate motivations and community compensation philosophy. In particular, TopCoder was up-front with the community over its intention to make money. When TopCoder made a decision to change corporate direction or competition procedures, the CEO Jack Hughes posted the information in the forums and explained the business reasons behind his decisions. Hughes also believed that, since the company benefited from the community’s hard work, adequately compensating community members was essential.
In my opinion, TopCoder has a strong system which benefits both its company and its client companies. With firm budgetary goals and a plan of action, it has ventured into a unique niche which not many other companies are capable of replicating.