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Bringing Crowdsourcing To The “Sourcing” Agenda
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editorial

Bringing Crowdsourcing To The “Sourcing” Agenda

Editor's Note: We continue our look at the leading industry research and advisory work that our sister organization massolution is engaged in. The piece below came out of a collaboration between massolution and PASS Technologies to look at bringing crowdsourcing into the world of "sourcing." Some of the fruits of this partnership will be presented at the 2013 Sourcing Interests Group (SIG) Global Sourcing Summit, May 14-16, 2013. More details about the summit can be found at: http://www.sig.org/summits.php. But first, watch a special webinar: "Leveraging On-Demand Software Testing Capabilities through Managed Crowdtesting," presented by Pass Technologies on April 2, 2013.

For more information on massolution and its industry research, go to crowdsourcing.org/research; for services, visit massolution.com

So what has Crowdsourcing got to do with “sourcing”?

In its earliest manifestation crowdsourcing was a cuckoo in the nest. You might remember crowdsourcing as the ideas platform your company championed to generate a new innovation pipeline, or a design contest like Peugeot’s Concept Car challenge or big events like the X-Prize competitions.

To begin with, crowdsourcing was a cheap way to get plentiful ideas. But it has now moved well beyond that. Under the radar, in fact, it has moved right into the middle of mainstream sourcing.

How come? Crowdsourcing is now a fully-fledged “platform” business. Just like Facebook aggregates millions of people to interact socially, platforms such as Passbrains aggregates tens of thousands, and even hundreds of thousands, of workers for specific enterprise tasks. And crowdsourcing as a platform is being implemented by large, small and medium-sized enterprises.

Massolution, a specialist crowdsourcing research and advisory firm, reports that the enterprise crowdsourcing market is growing in excess of 75% year-on-year and the work-force is currently doubling each year with over 6 million crowdsourcing workers available for work in 2012.

In the large enterprise space, crowdsourcing is used by giants such as Microsoft, to market test products before launch. There is also public-sector applications – increasingly state tax returns in the USA are being checked by members of large private crowds, as an alternative to mass temp hiring.

The advantage of the crowd in both these cases is obvious, when you think about it. They represent tasks for which a large number of people are needed in a very short time. They allow clients to scale up quickly and then to scale down. That makes them true on-demand platforms where clients only pay for the work they need and are not billed on an hourly or per diem contract.

The previous solution to “scaling-up” in these situations was to hire in temporary staff and reallocate permanent staff. But that carries a number of burdens, like shifting resources from other tasks that need completing, hiring costs, training costs, etc..

In a crowd solution, in place of the hire and training, expert task designers, redesign the tasks at hand so they can more easily be done with a very light training load. That redesign also makes the tasks highly scalable. Thousands of people on a crowd platform can simply self-select their participation and see how they perform. Of course, it also introduces privacy and confidentiality issues. Task designers, however, are also expert at breaking tasks down in such a way that a client’s confidentiality and non-disclosure concerns are fully addressed. Take an instance of high confidentiality in the financial services sector or indeed taxation. No worker will ever receive the full social security details or bank account of any one end-customer, nor personal details that link to financial information.

We introduced earlier the idea of the “private crowd”. It’s an important concept. Clients can always opt to use a wide open public crowd. But people who work in crowdsourcing tend to work hard to optimize and continually develop their own skill sets. They become adept at changing course and taking on new skills, however small that skill set. That flexibility becomes an asset. Workers are further motivated by their typical commitments to Non-Disclosure Agreements and that their income may be conditional on their respect for privacy.

Private crowds are like any work force in that respect. The platforms that hire them take on the responsibility of relationship building, like an employer does. And the worker tends to perform well because that ensures continuity.

We also said that the crowd can be applied to small and medium sized enterprises. An area that the crowd platform Passbrains is highly active in is market and product testing and these are perfect applications for all sizes of enterprise from small to large.

Traditionally smaller companies have not been resourced to do extensive market testing. But we are living in the age of lean entrepreneurship. Customers have very limited attention and it is imperative for any company to test its products, to iron out any interface or usability issues, and see what levels of passion it can generate before they launch. Large, Fortune 100 enterprises, such as eBay, have become heavy users of exactly this type of service.

The crowd, then, is not just about scalable “muscle”. It can also be used for very high value tasks.

Smaller companies can bring customers, vendors and employees together on the same platform to create a more collaborative atmosphere that will help them recognize and exploit new opportunities. Passbrains’ Enterprise Testforce Management solution is used by multiple SMBs in software testing area, exactly for this purpose. The Enterprise platform allows a Testing organization to develop its private crowd comprising employees, vendors and other groups. One of its key features, called “Knowledge Centre”, targets problem solving and micro consulting through the crowd. It goes one step further and facilitates knowledge networking, with an inbuilt intelligence to identify and connect with top experts in the crowd, associated to a given topic or problem.

The evidence shows that this kind of collective can accelerate complex problem solving by around 30% and a recent study conducted by McKinsey that such real-time knowledge-networking, possible on platforms can increase organizational productivity by 20-25%.

So what kind of tasks are now crowdsourced? We already mentioned testing, and that can also involve product development and interface feedback or expert networking and micro consulting.

But the roster of crowdsourced tasks is much bigger. Document processing on a mass scale, such as tax returns is one such task. Others include data management. In the area of data management data quality is often a huge issue because the cost of keeping data up to date and accurate often exceeds the value. That’s becoming a much bigger issue with the advent of Big Data. Crowd workforces are being used to clean data so that it is more usable and to free analyst time for high value data interpretation tasks.

In social media there is a problem with sentiment analysis – that is the analysis of what the public is saying about a brand or company on blogs, Twitter and Facebook. The accuracy of sentiment analysis is 80% at best but in reality it falls far short of this. Crowds are being used to check automated sentiment analysis and to course-correct for the client.

The crowd is even being used to further medical research, not just in clinical trials but by using the crowd to identify particular types of experts and to build expertise directories.

Crowds are being used for translation especially for online content where high cost professional translation would not be justifiable on cost grounds. And they are being used to content creation.

The reality is that crowd labor is allowing tasks to be fulfilled that previously were unaffordable. In that respect, it does not replace outsourcing and is often not a competitor to it. What it does is introduce new opportunities for labor to find paid work and new opportunities for companies to improve their products, their customer engagement and their viability. That’s what we used to call a win-win. Perhaps we still do?

You can find out more about large enterprise applications by downloading Testing Applications for the Real World. Click here to download the paper.

About massolution:

Massolution is a unique research and advisory firm specializing in the crowdsourcing and crowdfunding industries. Massolution works with governments, institutions and enterprises in the design and implementation of crowdsourcing and crowdfunding business models that drive improved business performance, product and service innovation, enhanced levels of customer engagement and in the formation of new sources of capital.

Massolution also operates the industry website Crowdsourcing.org.

You can reach a representative at massolution by emailing contact-at-crowdsourcing.org.

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