December 8, 2011: Outsourcing is a favorite word for most of the companies, but with a bad reputation. It is considered as a sign of corporate irresponsibility, characterized by ruthless hunger for cheap labor, resulting from corporate greed. But still many organizations are coming up with a new method of outsourcing a significant portion of their business, while trying not to cause any discomfort. Similar to outsourcing, “Crowdsourcing”, cuts cost by making use of feedbacks and ideas from the one who is best aware of the products; the customers, without making the employees useless.
The term Crowdsourcing was coined by Jeff Howe in an article that appeared in ‘Wired’ in 2006. This term is gaining wide acceptance in the current year with many of the organizations employing click workers to work on behalf of the company for less or no reward. For instance, Lego, a leading toy manufacture encourages its devoted customers to redesign its famous toys. In another example, Oxfam, an organization working to come up solutions for poverty and to fight injustice has asked its members to come up with slogans rather than employing an advertising agency for the task.
In an attempt to chart roads in India, Google is employing volunteers in India, equipping them with GPS units that it is sending to the country. Leading computer manufacturer Dell has transformed customer complaints into revenue by listening to the customers. They have successfully converted what used to be called as “Dell hell” to huge bottom line.
Recently Starbucks have turned towards its customer for valuable feedbacks and ideas to improve their quality of service and offerings, in order to delight the customers. Starbucks has developed a website in partnership with Salesforce.com, and the visitors of the site are encouraged to give suggestions that might improve their experience or to vote on suggestions that other have posted. It was found that most of the suggestions and ideas were insignificant. A valuable suggestion was a request to Starbucks to provide incentives to customers to recycle plastic.
The idea of Crowdsourcing emerged during the 19th century, in the compilation of the Oxford English Dictionary. Words and usages were written down on papers by volunteers and were posted to the editor. The idea gained prominence with the publishing of the book, Wisdom of Crowds. The wide popularity and penetration of internet has made the idea more clear.
It is evident that big companies such as Starbucks and P&G can successfully engage a crowd. But in the case of small companies, it is often difficult to attract crowd. They need to put in more effort to attract users, in most cases involves rewards.
The gaining acceptance of Crowdsourcing has transformed the way in which a business operates. Now organizations are trying to build long term relations with employees and customers who will help them in product trials and business development.
Advantages of Crowdsourcing
- Can exploit the popularity of internet
- Allows organizations to get customer suggestions and expert opinions
- Enable organizations to integrate technologies, ideas with their assets.
- Companies need to pay less or nothing at all to customers or volunteers.
- Helps organizations in building closer and stronger relationships with employees and customers