Building vs Buying a Freelance Management System: What to Consider.
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31 May 2019

Building vs Buying a Freelance Management System: What to Consider.

Most organizations today either have or are working towards, a workforce that is “blended,” meaning a combination of freelancers and full-time employees. By 2020, half of the American workforce could be freelancers. As the freelance workforce grows, companies are reckoning with how to manage them. A spreadsheet may work for 10 freelancers, but what about 100? Or 1,000? This is why organizations of all sizes are facing an eternal IT question: To build or to buy a Freelance Management System (FMS)?

The general framework for determining build v. buy for any IT project is to ask whether the function or process adds competitive value to your company. Is it a core part of your technology? Does it give you an edge in the market? Do you handle it differently than other companies? If the answers to these questions are “yes,” building may be the right choice. For most businesses, however, a Freelance Management System does not meet those criteria.

This is why more and more teams today are choosing to buy a Freelance Management System, and why Gartner has highlighted FMS as a technology “on the rise.” 

 

Defining a Freelance Management System 

First of all, what is an FMS? An FMS helps businesses manage their freelance workforce by streamlining the employer-freelancer relationship from end-to-end, onboarding to payments. The platform helps teams identify the right freelancer for the job, onboard them, provide access to tools, collaborate, track progress, receive completed work, process invoices, and issue payments. It brings all this information together in one, central place, bringing greater efficiency and visibility into the freelancer workflow. 

Companies that don’t have defined processes in place for tracking all this information will end up with an administrative headache and a compliance nightmare, not to mention lost productivity. Whether building or buying, a FMS brings order to the chaos.

The Homegrown (Build) Approach 

One “build” approaches is a homegrown system, meaning one that is constructed from scratch. This may mean it’s custom-built, which takes months and requires coordination with lots of stakeholders. Another route is to create a cobbled together system using spreadsheets and email, along with combinations of tools, like Airtable, Slack, and PayPal. Third, some companies tackle freelance management through customized or “hacked” versions of other tools, such as Salesforce, Asana or Zendesk.

A business might choose to build because they think that will allow for greater customizability or to hack together a system because it seems cheaper and easier. Or maybe they don’t know that FMS’s exist. In any case, building tends to be more trouble than it’s worth. A good FMS is complicated, so building one is not a quick or easy. Costs can quickly spiral and the project sucks IT resources away from other areas. Built systems can also be rigid and not easily scalable, either in size or across teams, which hampers visibility. In addition, a built system won’t have the robust integrations or compliance capabilities of a bought system, created by a company laser-focused on those issues. A homegrown system only gets you so far.

 Kalo is a leader in the Freelance Management Category in G2 Crowd og-logo-g2crowd-927f448fdce49f503b83e2c47067d218a9d6236a86875b3842cfe596eceabb2a

 

Choosing the Right FMS

Buying a FMS, on the other hand, is a valuable way to maintain a freelance workforce that is efficient, productive, and seamlessly blended into creative workflows. When choosing a FMS, there are five core features to look for:

  • Simple, fast and flexible onboarding.
  • Profiles and scheduling and budgeting tools.
  • Platform integrations.
  • Invoicing and payments
  • Worker review and sharing.

Does it Scale?

Additionally, an outsourced FMS should be easy to get up and running and reduce the burden on IT, as well as teams like HR and legal. It should also ensure team managers and freelancers have access to the tools they need to collaborate and accomplish their tasks. And a FMS should provide visibility across teams and scale up or down as needed, maintaining security and compliance at scale.

Is it Compliant?

Minimizing compliance is another key benefit of a bought FMS. Compliance is complicated, but freelancers pose huge compliance risks to organizations because misclassification can result in massive fines. A FMS can automatically issue documents and generate the appropriate tax forms depending on factors, like where a freelancer lives. In the event that the laws or regulations change, which they often do, it’s the vendor’s job, not the buyer’s, to update the system accordingly.

Buying a FMS provides peace of mind. To learn more about the merits of build versus buy, check out this detailed guide from Kalo.

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Ron Toledo

Ron Toledo

Head of Marketing at Kalo

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