Crowdsourcing, a phenomenon that is here to stay
Sourcing consultants should aspire to understand every aspect of sourcing. My question is whether that should include ‘crowdsourcing’ as well because this is an upcoming phenomenon. At first glance crowdsourcing seems to be something in the area of Social Media but I think it deserves a more thorough assessment as it can be relevant in the corporate realm as well. And if our clients are able to create business value with crowdsourcing, I think it needs to be part of the portfolio of a sourcing consultant.
Definition and examples
Starting with the definition: “Crowdsourcing is the process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an on-line community, rather than from traditional employees or suppliers” (Wikipedia, 2014). Essentially it is about involving a large group of people (‘large’ as in individuals no longer to be identified) for any given purpose. There is a broad range of examples from raising capital to open source software.
Crowdfunding is one of the most well known examples. Creative ideas on Kickstarter.com or Quirky.com are often quite successful in obtaining the funding they need. Potential customers can pre-order the product and in that way an initial clientèle is established. In the Netherlands the impact of crowdfunding is limited with market leader Geldvoorelkaar.nl raising on average about 25k€ per project. Recently we have seen examples of equity-crowdfunding as well, where participants can take part in the company-to-be, but that is still very early days.
Another example is the age of sharing some say we are living in, and that seems to be confirmed by various platforms around which people form communities to borrow items they do not own . BBQ-sets, lawnmowers and all kind of powertools are the usual objects going around on sites like Peerby.com and Spullendelen.nl. A commercially successful initiative in this scope is Airbnb.com: renting out your home to tourists visiting your city is seriously taking off on this platform. Airbnb.com is also the odd one out as it leverage the power of large groups but facilitates commercial engagements on the individual level.
In some cases participants divide (sometimes tedious) work that would otherwise remain undone or would not lead to a coordinated result. Translation services are organized via Transifex.com, Google provides a Captcha service that at the same time adds human abilities to the automated character recognition activities from the Google Books project. A fully automated version of this type of activities is the SETI project where stand-by computers can support the search for extraterrestrial life. A more close to earth example is the Amber Alert, where the police asks the general public to support the search for missing children. Wikipedia is a fine example where collaboration leads to great content used by millions every day.
All Open Source projects would probably fall into the same category. We can no longer imagine being without Open Source: Linux Operating Systems, Apache Webservers, MySQL databases and OpenSSL are just some of the Open Source systems that play a major role in modern IT. The license structure of Open Source allows anyone to use the software and make changes to it but at the same time requires developers to make their improved results available to all. This principle, combined with the obligation to publish source code has resulted into free software products of high quality. Here think free as in free speech, not free beer. These type of examples are about communities of volunteers for whom a structure is available to collaborate. In some Open Source projects the number of contributors is limited but the majority of these type of initiatives have huge numbers of participants and therefore the individual contribution of each is difficult to recognize and for that reason cannot be subject to regular commercial rules. In short: you will not get paid for supporting these type of initiatives.
Corporations entering into crowdsourcing activities
Recently we have seen various initiatives where large corporations have unlocked the intelligence of the crowd by getting their customers involved. This creates a brand loyalty second to none but can also significantly speed up the product development process in some cases. For instance in the financial market, where many banks and insurance companies involve their clients using existing Social Media platforms to create communities around new products and services. Decreasing the time to market or new products and services to less than 50% compared to the traditional approach is no exception while simultaneously the risk that clients would reject new products is greatly reduced. At the same time we have seen dedicated platforms emerge like the third party crowdsourcing platform/service provider Chaordix focused on Brand & Product innovation.
KPMG recently acquired the Innovation Factory who developed management software to share, enrich and grow ideas. This so-called PIT platform has a build-in social intelligence to support the capturing of knowledge and creativity of a community of participants.
Crowdsourcing is here to stay
All examples above seem to indicate that crowdsourcing is a relevant phenomenon that will most likely grow over the years to come. It is not about sourcing in the traditional sense where one party enters into a contract with another party to get something done. The crowd-end of the engagement is not suitable for any formal type of agreements and therefore it makes sense that the effort to structure these initiatives is focused on the platform of interactions. And although these platforms have some similarity, in most cases they are very much dedicated to the specific initiatives they support.
I expect that the impact on the sourcing consultant will be indirect and limited. Dealing with open source is already a relevant topic and being aware of vendors that can support the various crowdsourcing initiatives is probably important as well. Crowdsourcing is of a Business-to-Consumer(/Community?) nature where sourcing consultants are usually acting in Business-to-Business engagements. So apart from being aware of this interesting phenomenon, I don’t see a need to make the support of crowdsourcing a specific skill in the portfolio of the sourcing consultant.