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Crowd Sourcing Innovation – The New Approach to Problem Solving

What Is Crowd-Sourcing? The rapid integration of internet in businesses and in our daily lives has led to a plethora of innovations and adoption of new value creating techniques. One of these is crowd-sourcing which may either be performed under monetary or non-monetary incentives. Crowd-sourcing in essence is the activity which allows businesses to outsource the tasks that were originally performed by businesses or organizations themselves to a heterogeneous mass of potential individuals. Normally, this occurs via the internet in order to connect to the customers and to create value for innovative and creative suggestions.

Why Crowd-Source? A number of businesses benefit from the potential value created through outsourcing as it allows them to gain valuable insight from the knowledge base of internet users. Firms are increasingly adopting the outsourcing process by publishing their research and development problems and issues on different online crowd-sourcing platforms. This way a large community of individuals, working independently or in similar situations is able to solve the issues that are posted. Crowd-sourcing therefore makes room for open innovation and integration of an outside-in learning process. This implies that external knowledge is being integrated into the organization's operations and processes. Similarly, an inside-out learning process also occurs simultaneously, where internally developed innovations are being commercialized on a global platform. The growth of crowd-sourcing systems on the internet has been phenomenal in the past decade. What's more is that this effort has been dubbed many new names such as community systems, user generated or user powered content, collaborative systems and peer production systems. Defining a crowd-sourcing system is therefore tricky as it aims to enlist masses that explicitly pool resources and collaborate in order to create an artifact that is beneficial and advantageous to a particular entity or to the community. While many may view this definition to be a tad restrictive, it is worth mentioning here that no particular definition of collaboration applies here and that a crowd-sourcing system may generally be viewed as a problem solving methodology.

What Are The Risks? While crowd-sourcing is emerging as a favourable trend, there are a number of challenges that organizations have to face in order to develop an efficient crowd-sourcing platform. The primary challenge faced by organizations these days is to recruit and to retain the users or participants for crowd-sourcing. Also, the type, nature and overall value of contributions and how they may aid in problem solving are a challenge. Lastly, the evaluation of the overall contributions in relation to a target problem is a challenge as well. Other than this, there are also a host of risks associated with crowd-sourcing. These include the risks of lost control, deterioration in the internal knowledge base and (in) consideration of legal conditions.

What Are The Benefits? Despite these risks the benefits of outsourcing are abundant and plenty. Through efficient management, an organization can easily exploit the cost cutting potential of this activity. In addition, it allows businesses to connect with their customers and increase brand loyalty. It would be safe to conclude that the added flexibility to processes and the lesser time-to-market have encouraged businesses to further explore crowd-sourcing despite the associated risks.

Crowd Sourcing