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What is Crowdsourcing? | A Brief Definition & Overview

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Crowdsourcing is a somewhat self-explanatory term, but knowing the meaning of the two words that makeup the term (crowd and sourcing) does not really explain what it actually means. Looking at the word, one might be able to gather that crowdsourcing means sourcing (or gathering) something from a crowd or group, or that it deals with outsourcing, which is ultimately correct. However, it is a little more specific than that. Crowdsourcing is a sort of tactic that companies can use (though it is not limited solely to company use) to supplement tasks that would normally be dealt with in-house. Among some of these tasks: idea/brainstorming, software and product solutions, to research and development strategies.

While open-source tactics have been used for years in the tech industry, the arrival of blogs, social media, and greater numbers of consumers on the Internet, crowdsourcing has become easier to carry out. It has also become easier to gather larger crowds for more input. All the feedback, ideas, and solutions that consumers have to offer can be economically smart as well as a smart tool to use to generate publicity and PR. BNet put it beautifully: "The idea of soliciting customer input is hardly new, of course, and the open-source software movement showed that it can be done with large numbers of people. The difference is that today's technology makes it possible to enlist ever-larger numbers of non-technical people to do ever-more complex and creative tasks, at significantly reduced cost."

Here's (briefly) how it works:

A company defines a problem they need a solution for. Depending on the severity of the issue and whether or not s sort of 'prize' needs to be offered, companies can opt to use a social media tool to implement the open-source call for help. For example, companies can use Facebook, MySpace, Twitter, and LinkedIn, among other tools such as a forum, email, or a wiki. They then ask for help, and hope for some responses. Consumers or people who are simply looking to release some of their creative energy can give ideas, help create programs, or offer solutions, among other things. Companies can offer a cash prize for a program or solution they implement, or can offer some sort of advertising for the solution creator. It really depends on the company and what sort of solution they are hoping for in terms of quality, timeliness, and range of submissions.

Some pros: This method of 'sourcing' can save significant amounts of money, time, and other resources. Research and design can take time; with crowdsourcing, information that would normally take much longer through surveys, focus groups, and other marketing materials can be offered, for free, from people who are passionate about your product or company. This can create a stronger sense of belonging where consumers can say they were a part of a new product release or a new venture. Having others who are not employed by the company can also save resources and increase productivity. Furthermore, when you are able to get many, many minds together, ideas and creativity can really flow. This is a great way to increase the pool companies can take talent from, without having to hire new employees.

Some cons: These people that participate are not employed by you. As such, you are not able to really control them. There is a risk of releasing some important information for a crowdsourcing project that may result in a crisis for the company. Ensure that things that can (and really should) be done internally are kept that way.

To expand on that, BNet again comes to my aid: "Indeed, while they may not ask for cash or in-kind products, participants will seek compensation in the form of satisfaction, recognition, and freedom. They will also demand time, attention, patience, good listening skills, transparency, and honesty. For traditional top-down organizations, this shift in management culture may prove difficult."

So while contributors may not require a monetary compensation, this sort of outsourcing can require a lot of time and effort. No matter how big or small, it seems crowdsourcing can help get some ideas on the table and perhaps even find a solution.




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