When Jeff Howe coined the term ‘crowdsourcing’ in a June 2006 Wired article, it was quite clear that the term had evolved from the word ‘outsourcing,’ which by then was an established and relatively common business practice.

Needless to say, crowdsourcing and outsourcing share some characteristics. But what exactly are the similarities between the two? And what have crowdsourcing service providers learned (and can still learn) from their more mature cousins? These are the issues that Crowdsourcing.org CEO Carl Esposti explored in the research report Learning from the Pioneers of Offshore Outsourcing, which we put out earlier this year.

As the title implies, Esposti examines the success behind offshore outsourcing companies, specifically those in India. He explains how India’s outsourcing service providers were able to overcome a number of challenges – including privacy guidelines as well as poor telecommunications infrastructure – to become a multi-billion dollar industry.

Their success in three key innovations has paved the route for crowdsourcing, Esposti argues. First, these outsourcing service providers proved “the concept of a globalized workforce,” thereby proving that security as well as geopolitical concerns involved with outsourcing labor can be mitigated.

Second, the companies prompted “enterprises in multiple industries to disaggregate their business processes.” Today, breaking up end-to-end processes into multiple parts is a key component of crowdsourcing.

The third innovation led by offshore outsourcing companies, Esposti writes, was figuring out the need to sell services on an output-based model. “They figured that they sold more when they sold capability instead of capacity and aligned it with ongoing enterprise needs,” he claims. Esposti writes that many crowdsourcing service providers already price their services per transaction or task, though he believes they can improve by changing the “nature of the value proposition and the sale away from people that can perform tasks and towards capabilities and solutions that can be deployed.”

To read more about what crowdsourcing service providers can learn from their offshore predecessors, make sure to read the full report here. And check out our other research reports on crowdfunding, enterprise crowdsourcing, and more, which can be found here.