Cloudsourcing

Crowdsourcing, outsourcing, simply sourcing… the challenge facing every organization shifted from the how to the who– today, we rarely see a case where scientists wonder off in their labs for as long as it takes to reach Eureka; innovations need to hurry up before they become last-season. Lean delegation has replaced bulky R&D budgeting, companies shrunk in height but doubled in width- is this the end of the vertically integrated enterprise?

Is crowdsourcing a generic model? To answer that question we first need to learn what crowdsourcing is. Evidently crowdsourcing involves delegating (sourcing) a certain task to the crowd (general people). Specifically, crowdsourcing is an activity most suitably organized via an online platform due to features the real world lacks compensated by the web- physical and time limits. Offline, it is impossible to gather the whole world in the same place at the same time, online the web platform provides the meeting space while interaction is timeless. Hence, by creating a space where we are available 24/7, we have also created a space where we can interact and monitor 24/7. Suddenly the fear of loss of control companies once experienced when delegating power to other parties is greatly diminished.

Suppliers that were once remote, unfamiliar or inconsistent are all of a sudden visible and manageable. But this is just the tip of the iceberg; tasks are now more manageable out of the company rather than inside. While within, the company’s vision and strategy are vulnerable to internal political conflict, without, the web’s equalized balance of power, assimilating the ‘perfect competition’ model, offers a neutral operational support for strategy execution. Furthermore the chance of receiving accurate strategy direction is higher as more people offer solutions through the web, further, providing the company with a variety of blueprints for how to reach a specific solution.

 

So far different crowdsourcing business model forms have emerged. Some are design based such as iStockphoto while others are science based such as Innocentive. Furthermore, some companies even integrated crowdsourcing into their strategy, outsourcing a vast amount of their R&D different platforms of crowds qualified to solve the problem. One such example is Procter & Gamble and its R&D strategy dubbed connect and develop, tapping in to networks exterior to the firm for generating technical solutions.

What I would like to call these crowd communities is clouds, because different linkages between them, the company and each other makes it difficult to figure out a precise picture of their work relationships; many times the problem solver delegates a part of the task to a different problem solver specialized for the task. Cloud communities are different than crowd communities in the sense that the latter compete with one another to provide a solution to a problem posted by a third party, while the former cooperate with each other because each contributor complements one another like puzzle pieces do to form the big picture of a problem.

Crowdsourcing and for that matter ‘cloudsourcing’ are unexploited business models. Couple of brave first movers are now enjoying substantial rewards from these models but at the same time setting an example for other industries and organizations to follow suit. Operations today are more in control externally than internally and thanks to the Web firms have a choice to execute strategy democratically.

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