VentureBeat

Elance, an online outsourcing marketplace, has unveiled a new  “remote work system” to help businesses track and pay their outsourced staffers. The Elance site is already a popular destination for companies offering outsourced jobs and people seeking such jobs, but its offerings to help employers manage those workers they’re hiring them were a bit more limited. There are already a few management and payment features, but the remote work system is Elance’s attempt to provide a full set of tools.

Mountain View, Calif.-based Elance is also releasing some numbers to back its claims of being a leader in the field, which also includes sites like oDesk and Rentacoder — since launching in 2006, the company has facilitated more than $100 million worth of outsourced work, and there are now more than 100,000 service providers offering their talents on Elance. In comparison, oDesk (which was founded in 2004) has a network of around almost 89,000 providers who have completed $38 million worth of jobs, according to oDesk’s oConomy statistics page.

Elance already has a robust system in place for finding jobs or workers, depending on what you’re looking for. Employers, for example, can conduct video interviews before hiring someone, and there’s also a way for job seekers to become certified for different skills — so if someone on Elance claims to be a great PHP programmer, businesses can see if they took Elance’s test to prove their skill.

The idea behind the remote work system is to provide the similar services for businesses once they’ve actually found someone to do the outsourced work. These projects an can now be managed from a new page called the “workroom,” a centralized location for all of a company’s interviewing, hiring a collaboration. Also, each provider is now required to turn in a weekly status report on their work. Businesses can convert those reports into invoices with just one click, and then issue payments based on those invoices. Not only do the reports keep employers up-to-date, they also let Elance know how different jobs are progressing, and whether there are particular problems with an employer or service provider.

None of these features may sound all that impressive when compared to the detailed monitoring (screenshots, keystroke tracking, etc.) provided by companies like oDesk. But they do add a new dimension to Elance’s apparently successful offering, and for many companies they may be good enough, or even a preferable alternative to micromanagement. Chief executive Fabio Rosati argues that the more high-level tracking provided by Elance’s status reports better reflects how people work. After all, if you’re a programmer or a designer, for example, you may spend a lot of work time thinking or jotting down notes.

“Sometimes [people] do work without staring at a computer and tapping on a keyboard,” Rosati says.

oDesk is a start-up that provides a marketplace for companies to hire developers online and then keep near unprecedented control over them remotely.

The Palo Alto company has just raised $8 million more in venture capital.

Benchmark Capital, a Silicon Valley firm known for its backing of auction site eBay, led the round. Bechmark has now invested in numerous marketplaces, including LogoWorks, eBags and Ingenio.

oDesk has some momentum, with revenues growing at 10 to 15 percent a month, says chief executive Gary Swart.

What surprised us, when Swart demonstrated the product for us, is the sheer amount of surveillance and communication tools that oDesk provides to employers. When an employer selects a developer for a project, oDesk gives the employer screen shots of the developer’s computer six times an hour, at random times. It takes camera shots of the developer at work, to verify he is at his desk. It tracks their key strokes, and provides you access to the code they’ve produced — all in an effort to make it even easier to manage workers “than if they are in the same office,” as the company puts it. Before you select a worker, the marketplace dashboard gives you all sorts of metrics about how a developer has performed in the past, tests passed, how much they cost relative to others, and so on.

Check out the tour here.

The software is significant because one of the complaints so far about outsourced work is that it can be unreliable. Companies are comfortable only negotiating small projects with workers in Asia, Eastern Europe or Africa. They set a price for the project, and hope that it works out. But for bigger projects, setting a price is difficult, because project can take innumerable turns, and both sides get unhappy. Companies don’t want to pay by the hour, because they don’t know how productive the workers are. oDesk solves that problem. If a developer doesn’t sign on to oDesk’s system and work, they don’t get paid.

This is the second round of funding for oDesk. Benchmark made an aggressive offer of funding, even before oDesk had started looking for funding, Swart said. Benchmark did quick diligence, offered a nice bump in valuation, and did not disrupt oDesk’s team in the process, which Swart said made it easy take the cash. Benchmark’s Kevin Harvey has experience in the marketplace area, having invested in Ingenio, a company which provides software customer support via a marketplace.

The market for outsourcing is growing because online tools such as oDesk give employers easy access to the cost differences of developers between nations and regions. Technology allows more people to stay at home to offer their labor through these sorts of marketplaces, and has bolstered “pay-for-performance” models.

Harvey said the product impressed him after some companies Benchmark has invested in tried out the product and liked it.

There is heavy competition out there. Big players like Infosys and Wipro dominate the market, but oDesk is trying to undercut them — targeting smaller and medium sized companies who haven’t dared to outsource yet. There are players going after smaller companies, such as Elance and Rentacoder.com, too, but they don’t provide the same level of surveillance. (We first mentioned oDesk here, when they raised $6 million last year.)

Sigma Partners and Globespan are also investors, and participated in this round. Until now, Google ads have been the main way the company has acquired users.

The workers in oDesk’s marketplace includes programmers, system administrators, web designers, technical writers and QA engineers — and they reside in more than 50 countries, the company said.