Explanation and Definition of Crowdsourcing
The term crowdsourcing is composed of outsourcing and crowd, which means that certain tasks and processes are outsourced to the crowd. The crowd is the mass of internet users or a community on the web. Crowdsourcing is applied in various fields and is frequently used in the business context.
What is Crowdsourcing?
The term crowdsourcing was first used by the US author Jeff Howe. To derive the term, Howe gave several examples from practice. For instance, he explained how a project manager at the National Health Museum in Washington was able to quickly and cost-effectively implement various projects through a photo platform. The platform’s images were taken by amateur photographers and offered online for download for a small fee.
As further examples of crowdsourcing, Howe mentioned an online video platform the content of which could be used for their own purposes and a portal where specific human tasks were offered that computers could not yet perform.
In the meantime, there are countless examples, and crowdsourcing has established itself in many companies. Outsourcing partial tasks and collaborating with so-called crowd workers is essential in many areas to save costs.
The goal of the process is to involve the online community in business tasks. If a company cannot perform all of their activities internally, it must be outsourced. By using the labour of many people on the Internet, as well as the intelligence of the crowd, a company can manage comprehensive projects and develop new ideas and solutions for specific problems.
The principle of crowdsourcing, therefore, describes a process in which tasks and workflows are forwarded to an external online community. This saves costs and time. In comparison to traditional outsourcing, crowdsourcing relies not on a single service provider, but on the community of thousands of internet users (crowd). This is also called leveraging the so-called swarm intelligence.
Crowdsourcing Examples
Crowdsourcing usually does not require a large budget and is therefore easy to apply. Projects like this are implemented not only by large corporations but also by smaller companies and start-ups. The most well-known example is the crowdsourcing platform Wikipedia. Anyone can participate in the popular online encyclopaedia, write articles, and remove them.
Wikipedia relies on the intelligence of the crowd, as well as mutual checks and corrections of the contributions. This way, the articles always reach a high quality, so Wikipedia has developed into one of the most visited websites in the world.
An example of successful crowdsourcing in product development is the Danish company LEGO. Users can submit their own proposals for new products via the company’s website. Customers can then vote on the ideas. Thus, LEGO’s target group actively decides which products will be launched next. If an idea is implemented, the user who submitted it receives a share of the corresponding sales revenue.
Frequently asked questions and answers
Crowdsourcing offers companies few disadvantages and countless advantages. The most attractive reason for outsourcing work processes is cost reduction. Crowd workers on the internet cost only a fraction of an employee or external service provider.
Reduce Costs
Costs are often saved in product development. Before crowdsourcing became known, companies had to invest a lot of money in market research to find out which products work well with which target group. Crowdsourcing enables direct questioning of customers and developing equally reliable forecasts. The costs remain minimal.
Increase Speed
Another reason for crowdsourcing in the company is the speed of work processes. Some challenges take a lot of time: project teams must be formed, and new processes created. Crowdsourcing can find solutions to any problem.
Improve Quality
Well-known companies are turning to crowdsourcing to gather ideas for new products as well as feedback on existing ones. This way, companies can always ensure high product quality. After all, the target audience knows best what needs to be improved.
In addition to the numerous advantages, crowdsourcing can also have disadvantages. The most relevant reason against crowdsourcing is negative PR as a result of cost-effective outsourcing. Especially in the areas of design and photography, companies are repeatedly accused of undercutting market prices through crowdsourcing, leading to fewer and fewer experts being commissioned.
Crowd working refers to outsourcing work to a community on the internet (crowd). This provides companies with a large selection of different workers with diverse skillsets. This ensures high quality on the one hand and fast task processing on the other.
The actors in crowd working are called crowd workers: people from all over the world who can participate in crowdsourcing projects. There are also explicit platforms on the internet where crowd workers can find suitable projects.
Sources
- Gabler Wirtschaftslexikon. Crowdsourcing. Ausführliche Definition im Online-Lexikon. Springer Gabler | Springer Fachmedien Wiesbaden GmbH.
https://wirtschaftslexikon.gabler.de/definition/crowdsourcing-51787
- IT-BUSINESS. Definition – Was ist Crowdworking? Vogel IT-Medien GmbH. Augsburg.
https://www.it-business.de/was-ist-crowdworking-a-895700
