Since the rise of outsourcing in the early 90’s, businesses have been utilizing outside talent in new and meaningful ways. With a plethora of pure play service providers offering every imaginable kind of business service on an outsourced basis, we have seen companies engage these companies for performing accounting, payroll, collection, software development, lead generation, help desk services, R&D, HR management, legal research… you name it, it is being done.
As a result of the popularity of outsourcing, businesses have become highly globalized, and we have seen the rise of India and China in the world market on account of their IT and manufacturing expertise respectively.
The latest evolution of this trend threatens to open up outsourcing to a new dimension where the traditional powerhouses will not be the only players – you and I and every living breathing human being with an Internet connection will be able to jump in and collaborate with companies everywhere.
Welcome to the world of Crowdsourcing.
Crowdsourcing is a method that involves and uses “crowds” (i.e., large, undefined, randomly distributed, undirected, unsupervised groups of people) to performs tasks and accomplish goals.
Here are some live examples of successful crowdsourcing.
INTERNET GOLD RUSH
In March 2000, Goldcorp, the Canadian gold mining group, made available to the public via the Internet, around 400 MB of its geological survey data from its Red Lake, Ontario, property. They called it the “Goldcorp Challenge” and offered a prize of $575,000 prize to anyone who could analyze the data and suggest places where gold could be found. The mining community was flabbergasted. Goldcorp's geologists were appalled at the idea of exposing their super-secret data to the world. But Rob McEwen, Goldcorp’s Chairman and CEO, pressed on. The prize was won by an Australian firm called Fractal Graphics. Goldcorp claims that the contest produced 110 targets, over 80% of which proved productive; yielding 8 million ounces of gold, worth more than $3 billion. [Read more about it here: http://www.fastcompany.com/magazine/59/mcewen.html]
LAW ENFORCEMENT
In 2007, the Texas Border Sheriff’s Coalition (TBSC) partnered with a private organization called BlueServo to utilize and expose on the Internet a network of cameras and sensors on the Texas-Mexico border. Called the Virtual Community Watch, it was an innovative real-time surveillance program designed to empower the public to proactively participate in fighting border crime and illegal immigration. Citizens can sign up as Virtual Texas Deputies to participate in border surveillance through this public network on the Internet. These Virtual Texas Deputies from around the country monitor the streaming video from these cameras 24/7 and report any suspicious activities directly to the Border Sheriffs via email. With the success of this initiative, in January 2008 the State of Texas announced it would install 200 mobile cameras along the Texas-Mexico border to enable anyone with an Internet connection to watch the border and report sightings of alleged illegal immigrants to border patrol agents.
Check out some of these Live Border Cameras here:
MOBILE PHONE DESIGN
As recently as April-June 2009, LG crowdsourced the design of their next mobile phone. In a job posted to crowdSPRING in April 2009, LG has issued a challenge to people everywhere: Design the future of mobile communication device. Here is what the listing actually said:
“Predict what's next. What do you think mobile phones should look like in 2, 5, or 10 years? We are asking for your help. We're NOT looking for a long list of specs or phone ideas that already exist. We're looking for a cool new concept or "big idea" supported by usage scenario illustrations. Understand how your idea will be judged, and increase your chances of winning. Keep in mind, the LG logo must be included somewhere. Use the logo files provided (one is for light background and one is for dark). And the prize for the winner or winners? $20,000 first award, $10,000 second award, $5,000 third award or one of the 40 (40!) $1000 awards that also come with a free LG cell phone.”
The competition closed on June 8th and the winner is scheduled to be announced on July 7th.
AUDITING EXPENSES FILED BY YOUR MEMBER OF PARLIAMENT
The U.K. newspaper – Guardian – recently launched a crowdsourcing application called “Investigate your MP's expenses”.
The landing page says it all: “Join us in digging through the 700,000 documents of MPs' expenses to identify individual claims, or documents that you think merit further investigation. You can work through your own MP's expenses, or just hit the button below to start reviewing. (Update, Thurs evening: More added now and more coming all the time. Check back if you haven't found your MP yet).”
Each MP's expenses and claims are presented as a set of images, and users can determine what entries there are on a page, and decide whether the page is unimportant, interesting, "interesting but known" or worthy of investigation.
As of June 18th, the site had 77252 pages of documents, of which 23891 are unreviewed.
The newspaper smugly claims, with a jab at its closest rival, The Daily Telegraph:
“The Daily Telegraph may have had a team of 25 journalists working on the MPs' expenses, but within 10 minutes of the launch on Thursday afternoon of the Guardian's crowdsourcing application to examine them, there were 323 people, almost all outside the Guardian, doing the same task. Within half an hour of the launch, more than 2,000 pages had been reviewed. Future additions to the application may include a ‘top analysis’ ranking for those who have contributed most to sifting the pages - a task which the Telegraph's team, despite having a three-month lead, is not believed to have been able to achieve.”
Click here to launch it: http://mps-expenses.guardian.co.uk/
VIDEO GAME DESIGN
A game publisher by the name of Roundhouse Interactive is putting the task of designing their next Video Game into the hands of a large community of gamers. The publisher says it will rely mainly on the whims of a potentially six-figure-large community for the major decisions in the game's creation. The game, which is currently going by the code name The Game Cartel, is expected to be a console game available in December 2010.
You may read more about this here: http://m.news.com/2166-12_3-10267336-52.html.
DEFINING CROWDSOURCING
Having reviewed the above examples, we can now define that Crowdsourcing is the act of taking a task that is traditionally performed by an employee or contractor of a company, and outsourcing it to a large, undefined, geographically disparate and largely undirected community of people in the form of an open call. It is a distributed problem-solving and production model.
Some claim that the word was coined by Jeff Howe in a June 2006 Wired magazine article. (Click here for the original article: http://www.wired.com/wired/archive/14.06/crowds.html)
DIFFERENCE BETWEEN CROWDSOURCING AND OUTSOURCING
The difference between crowdsourcing and traditional outsourcing is that crowdsourcing outsources a task or problem to an undefined public rather than to a specific organization.
BENEFITS OF CROWDSOURCING
There could be many benefits to crowdsourcing, such as:
LOW COST: Tasks can be performed at much lower cost than traditional outsourcing.
SPEED OF EXECUTION: Problems can be acted upon very quickly by a large body of people.
HARNESSING A LARGER POOL OF TALENT: Through crowdsourcing, a company would probably tap into a much larger pool of talent than it would via traditional outsourcing.
PAYMENT ONLY UPON SUCCESS: Payment is contingent only upon good and acceptable result.
GREATER MARKET INTELLIGENCE: By listening to the crowd, organizations can gain first-hand insight on customer desires.
EASIER BRAND BUILDING: By involving the user (consumer) community in a product design initiative, the company stands to build a brand name more easily than through traditional advertising.
WHAT DOES THE FUTURE FORETELL?
Only the future will answer that question. But meanwhile we can observe that crowdsourcing is a phenomenon that is gaining fast acceptance in the business community and beyond. It has the potential to affect business quite fundamentally and can usher in radical changes to business models and business processes everywhere.
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