Tag: crowdsourcing

The Tantalizing Crowdsourcing Model | Sherpas in Blue Shirts

Crowdsourcing is a tantalizing business model. It leverages access to free or very cheap labor through technology platforms or through social media. We see examples of it, and we sense intuitively that they have broader application. So why does it seem to be just out of reach for most services firms? Why do service providers struggle when trying to apply this model to their business?

There are several highly successful, intriguing examples of crowdsourcing.

  • Uber’s technology platform allows individuals to collaborate and coordinate to provide a transportation service that is different from traditional taxi and limo services.
  • Trip Advisor’s platform relies on individuals reporting and rating their travel experiences. The result is a superb way to better understand the kind of service you’re likely to get at a bed and breakfast, hotel or restaurant.
  • IT Central Station puts crowdsourcing to work providing user reviews of software.
  • Urban Spoon provides crowdsourced restaurant reviews from diners and critics.

Wikipedia is also a great example of the power of crowdsourcing. The success of these and other businesses tantalizes us with the model. But it’s a radically different model and it’s frustrating to try to apply a crowdsourcing capability to most businesses. Here are some of the issues that make it difficult to develop this kind of business:

  • It requires different philosophies about sourcing information such as reliability of the information and using information from multiple sources rather than a high-quality, expert single source. Crowdsourcing businesses rely on people who are motivated to share information that helps others or makes them appear to be an expert.
  • It requires scale advantages before it’s useful.
  • It often necessitates change in security as well as intellectual property rights.

Resolving these issues is really hard to do under the constraints of an existing organization.

Most, if not all, crowdsourcing businesses evolved without being inside an existing organization and thus having to navigate the concerns and insecurities of the existing organization. They were built from the ground up, which allowed them to resolve or iterate through these issues and come up with a complete working model that was then usable.

To avoid the tantalizing call of revenue from crowdsourced platforms, we need to study crowdsourcing‘s successes and learn how to duplicate them in our normal services businesses.

Photo credit: Flickr

Every Crowd has a Silver Lining | Sherpas in Blue Shirts

We all hate crowds. We leave places early to beat the traffic, avoid flea markets on Sundays, and wrap up Christmas shopping before the last minute rush. But on the Internet, it’s far different. We follow high-volume Twitter posters, aggregate on pages with maximum “fans” and “likes,” are quick to view viral videos, and trust the content that’s vetted by most. On the web, crowd is a value proposition.

In business, crowd was initially used by Internet start-ups looking to tap a large pool of low-cost labor to contribute, create, and market online products. However, in the wake of the ongoing recession, corporations are increasingly experimenting with crowdsourcing in three ways:

  • as a model to support new areas such as content localization, translation, and advertising, in addition to low-end tasks
  • as an alternative to traditional BPO models
  • as an option to more quickly, and less expensively, access talent around the world

Besides the unparalleled access to rich skills and experience, crowd sourcing offers a compelling economic proposition. Crowd resources can cost 60 to 70 percent less per FTE than traditional models. And the on-demand nature of the crowd provides additional 10-15 percent savings due to full resource utilization.

Yet, as with any service delivery model, crowdsourcing also has its challenges. Given the amorphous nature of the crowd, organizations using crowd labor may well face accountability, quality, and timeliness issues. They also run the risk of initiative and/or intellectual property plagiarism.

Also, crowd workers, especially those with higher-end skills and work experience, are wary of crowd tasks and larger projects. With tasks, workers only receive minimal information until after signing up; if they then quit, their “completion rate” and follow-through employability is negatively impacted. With projects, employers can reject unsatisfactory work, refuse to pay, and yet still retain the right to use the work. These aspects coupled with low pay and benefits make this model yet unacceptable by workers.

The onus to drive crowd adoption rests with the crowd vendors. They will need to take greater ownership of understanding the client’s scope, staffing the crowd accordingly, creating wage levels that are win-win for clients and workers, and developing tools and platforms to ensure ease of delivery and service level compliance. They will also need to bring structure to the inherently unstructured crowd in order to accelerate the penetration and utilization of crowdsourcing. All these responsibilities are hard to undertake unless you already have the expertise.

For more information on crowdsourcing, its upsides and its downsides, please read Everest Group’s viewpoint entitled, Every Crowd has a Silver Lining.

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