“Crowdsourcing” – Is it Relevant?

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What is Crowdsourcing?  For those of us who operate in the world of sourcing and supply chain, it sounds familiar but may not have anything to do with sourcing or supply chain at all.  If you’re not familiar with the term, it is, as defined in Wikipedia, “the act of outsourcing tasks, traditionally performed by an employee or contractor, to an undefined, large group of people or community (a “crowd”), through an open call.”   The crowd is usually those who are most fit to perform tasks, solve complex problems and contribute with the most relevant and fresh ideas.  The phrase was coined by Jeff Howe, a contributing editor at Wired Magazine in his 2006 article entitled “The Rise of Crowdsourcing”.

Fox News published a very interesting story on Tuesday entitled “U.S. Gamers Crack Puzzle in AIDS Research that Stumped Scientists for Years” which described how the practice of Crowdsourcing has been taken to a whole new level.  The article explains how researchers at The University of Washington turned to online gamers to decipher the structure of a retrovirus protein which opened doors for a new AIDS drug design.  The researchers used a program called Foldit, which was created by the university to transform science problems into competitive computer games.  Gamers were challenged to use their three-dimensional problem-solving skills to build accurate models of a protein that plays a critical role in how some viruses multiply.  Within days, the gamers generated models that gave researchers an accurate portrayal of the enzyme’s structure to enable the researchers to design antiretroviral drugs.  The article points out the power of the process and the potential it has in solving a wide range of scientific problems. What I found fascinating is the rather odd connection between gaming and science.  Just imagine the potential in other arenas such as business, government (maybe we can crowdsource a new national health care plan?), non-profits, etc.

As I started to do some research, I learned that crowdsourcing is hardly new.  In a nutshell, it is a form of mass collaboration.  Microsoft has been using this technique for years in helping build new applications.  They used crowdsourcing to develop Office 2010 and recently launched a crowdsource blog to help them develop the next version of Windows.   Apple has also used crowdsourcing to create the specifications for the iPad and many of its applications.  The list goes on to include family searches, idea contests, product branding, product design, the search for aviator Steve Fossett (50,000 participated).

Some Perceived benefits of crowdsourcing include the following:

  • Problems can be explored at comparatively little cost, and often very quickly.
  • Payment is by results or even omitted.
  • The organization can tap a wider range of talent than might be present in its own organization.
  • By listening to the crowd, organizations gain first-hand insight on their customers’ desires.
  • The community may feel a brand-building kinship with the crowdsourcing organization, which is the result of an earned sense of ownership through contribution and collaboration.

There may be some downside as well, particularly if the “crowd” you select is not interested in OR qualified (a good fit) to help.

Even though crowdsourcing may have nothing to do with sourcing or supply chain it can most certainly be applied there.  Most companies have two sets of external stakeholders that can be tapped as the “crowd” for a crowdsourcing exercise – suppliers and customers.  Either of these “crowds” or the two combined can be a tremendous source of ideas or R&D for any company.  Unfortunately, we seldom reach out to use them.  Imagine the value that can be created by tapping into those resources either separately or collectively.  If they are contributing to your manufacturing process (suppliers) or buying your product (customers) they should be “experts” in your industry.  Yet, unless we engage them, they are a source of untapped / lost value.  Crowdsourcing may be the perfect way to engage those resources – either by presenting a business problem or seeking out new and innovative ideas.  Since the Sourcing/ Supply Chain organization usually has some involvement with both groups, they are perfect group to introduce crowdsourcing to their company.

If crowdsourcing can be used to find a cure for AIDS, find missing family members and even help design the iPad perhaps it can have some applicability for your organization . . . . . . . .

Do you think crowdsourcing could be relevant for your organization?  Join in the conversation.  We welcome your comments and examples . . . . . . . . .

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Anne has been leading consulting and financial management organizations for over 25 years. She has extensive expertise in Strategic Sourcing, change management, contracting & contract management (both the buy side and sell side) organizational design and supply chain management. Anne has a passion for collaborating and educating her clients while helping them to uncover hidden value in their organizations. In addition, Anne has been named by Supply & Demand Chain Executive as a “Top 100 Provider Pro to Know” every year since 2007 and a 2013 Top Female Supply Chain executive.

1 Comment

  1. Dave Weidenfeld on

    In the Great Minds Think Alike category…take a look at page 56 of the July/August Harvard Business review. They obviously have way more space to play with (actually, you’ve done a better job of distilling things down) but the concept is similar. A key issue that has to be considered if you take this kind of approach is how decisions will be made where the IP from the deliverable has value to a company and/or where the confidentiality of the outcome is significant. The task will be to put a mechanism in place that allows for a quick review of what can be “Crowdsourced”. If that process takes too long you lose the advantage that you were trying to gain.

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