What You Don’t Know Can’t Help You: Why Crowdsourcing Is Alive and Growing

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Crowdsourcing is an obscure concept for many, but one that is also widely in use. Large organizations ranging from Coca-Cola and Starbucks to AstraZeneca and NASA are increasingly experimenting with the approach, finding solutions for everything from sweetener development to answers to citizen science projects. And they’re not alone:  many midsize organizations are using and benefiting from crowdsourcing, too.

To bring contingent workforce and services category managers and sourcing practitioners up to speed on these developments, we recently published “Crowdsourcing: New Trends and Developments” (Part 1 and Part 2). In the two-part Spend Matters Plus research brief, we explained what crowdsourcing is (and what it is not), as well as provided examples of various crowdsourcing platforms and how enterprises are using such platforms. In addition to identifying key trends, we also offered some practical considerations for practitioners.

But even with all that, there’s still more for procurement to explore in the world of crowdsourcing. The purpose of this post is to touch upon some of the observations that made it into the report, along with a few that did not.

Overview

A recent article, co-authored by the CEO of the “expert crowdsourcing” platform provider Wikistrat, provided this helpful encapsulation of crowdsourcing:

“Crowdsourcing isn’t just a buzzword. It is also — and probably most importantly — an ecosystem of its own. Crowdsourcing to solve problems and generate new knowledge comes in many forms, including idea generation, innovation, microtasks, corporate research and development, unpaid competitions and paid crowds.”

From our perspective, rather than considering it as obscure concept with very limited uses, we view crowdsourcing as a robust tool kit for business problem solving. In fact, it is clear that new applications are being and will be discovered and implemented.

Crowdsourcing, as an operational model, is not about engaging an individual worker or freelancer to perform a specific job. Rather, it is about contracting with a digital platform provider for the production of expected outcomes, deliverables or solutions that are produced from various responses or activities of members of a crowd.

Crowds can range in size from a hundred to hundreds of thousands of members. Some crowds are vetted, but sometimes the general public is the crowd. Platforms can range from those that distribute and aggregate microtasks to those that can support bounty hunts (find software bugs), contests (submit the best graphic design) and sophisticated challenges (come up with a better approach to cleaning up oil spills). And what they all have in common is leveraging a crowd to produce and deliver a service for a crowd platform provider’s client.

It should be noted that there are a few pure-play technology providers that only license their software platforms to companies that want do-it-yourself crowdsourcing. But we are focusing on a larger set of crowdsourcing providers that have both built their own technology platforms and developed their own crowds; together these are bundled and managed to provide a complete service solution to their clients.

The takeaway here: A crowdsourcing provider is a true service provider, not simply an intermediary that facilitates a transaction (and contract) between two individual parties.

Trends

There are multiple trends that we observed in our overview of crowdsourcing:

  • Large enterprises are increasingly starting to use crowdsourcing or are already routinely using it
  • Over time, many new and different applications for crowdsourcing are being discovered and implemented (even, for example, applications within procurement, such as Beroe’s LiVE Poll and Coupa’s Prescriptive Community Intelligence
  • The number of different crowdsourcing platform providers is also increasing and sometimes specializing in a particular discipline (effectively a growing population of potential suppliers)
  • Specific solution segments are forming where more than a few specialized crowdsourcing platforms are active. Software testing is one of those areas. (We counted 12 providers.) A number of other specialized areas of focus are also emerging
  • Most recently, crowdsourcing providers that specialize in “human-in-the-loop” data normalization and training of AI. For example, earlier in April, Crowdflower announced its rebranding as Figure Eight, part of the clarification of its more focused AI strategy
  • While most organizations’ use of crowdsourcing is fragmented and standardized methods are generally lacking, there are signs that organizations are beginning to unify management methods and practices. GE’s GeniusLink and governmental agencies like the Department of Defense are two notable examples
  • Finally, new technology may also be changing how crowdsourcing is accomplished and what it can do. AI and machine learning (ML) are beginning to play a role in the crowdsourcing process — not only humans training AI but combining AI and human activities to produce various kinds of services (e.g., Directly). Also, 2017 saw the emergence of the first blockchain-based platform providers (despite the skepticism about blockchain, there are a number of inherent properties that may make blockchain a suitable technology for crowdsourcing platforms)

Clearly, a lot is happening in the world of crowdsourcing. For most practitioners, perhaps more than meets the eye.

More Than a Fad

Crowdsourcing is not a passing fad nor an approach so specialized that the uses for it are severely limited. Rather than an obscure, baffling idea, it really is a robust tool kit for business problem solving.

While crowdsourcing may not quite be a mainstream sourcing approach, it appears to be heading in that direction. That is the case not only because we see increasing enterprise adoption and a proliferation of practical applications. It may also be that an evolving economy, based on technology, information and knowledge, leads to more applications within use cases that don’t exist today.

The bottom line is that crowdsourcing must be well understood and not dismissed by CW/S professionals. It is already being used in valuable ways across many organizations and represents an important source of services. Internal cost savings and risk abatement are probably also outcomes from using crowdsourcing — particularly if crowdsourcing suppliers (providers) are well organized and supplier relationships are well managed. But as we said earlier, what you don’t know can’t help you.

To get a jump on crowdsourcing, we recommend our research brief, “Crowdsourcing: New Trends and Developments” (Part 1 and Part 2).

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First Voice

  1. Terri Gallagher:

    Great Overview and guidance on practical application of Crowdsourcing within enterprise organizations. With talent at a premium, applying creative ways to expand your talent supply chain to get work done is smart.

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