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Developing an enterprise crowdsourcing strategy
- 1. INSIGHTS. RESEARCH. ADVISORY.
DEVELOPING AN ENTERPRISE
CROWDSOURCING STRATEGY
Conferencia Crowdsourcing Brazil
3 July 2012
Includes Extracts from massolution’s
Crowdsourcing Industry Report
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 1
- 2. CROWDSOURCING DEFINITION (OLD) INSIGHTS. RESEARCH. ADVISORY.
CROWDSOURCING DEFINITION
Crowdsourcing is the act of taking a job traditionally performed by a
designated agent (usually an employee) and outsourcing it to an undefined,
generally large group of people in the form of an open call, generally using
the internet.
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 2
- 3. CROWDSOURCING DEFINITION (OLD) INSIGHTS. RESEARCH. ADVISORY.
CROWDSOURCING DEFINITION
Crowdsourcing is the act of taking a job traditionally performed by a
designated agent (usually an employee) and outsourcing it to an undefined,
generally large group of people in the form of an open call, generally using
the internet.
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 3
- 4. CROWDSOURCING DEFINITION (OLD) INSIGHTS. RESEARCH. ADVISORY.
CROWDSOURCING DEFINITION
Crowdsourcing is the act of taking a job traditionally performed by a
designated agent (usually an employee) and outsourcing it to an undefined,
generally large group of people in the form of an open call, generally using
the internet.
Crowdsourcing requires online participants to create something new and of value – not every instance of
an online community is crowdsourcing.
It requires the internet so that you can connect with lots of people very quickly and you can direct and
organize their work.
Crowdsourcing is enabling new work to be performed that previously wasn’t practical, viable or affordable
New forms of crowdsourcing are emerging: Curated, Intermediated and Private Crowds
Online communities are tapped for specific purposes requiring their knowledge, their expertise, their time
or their resources.
Crowdsourcing is different from outsourcing - they differ in philosophy and models of worker participation:
With outsourcing there is restricted participation and a philosophy of end-to-end responsibility
With crowdsourcing there is open participation and a philosophy of disaggregation
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 4
- 5. CROWDSOURCING DEFINITION (NEW) INSIGHTS. RESEARCH. ADVISORY.
CROWDSOURCING DEFINITION
CROWDSOURCING IS AN ONLINE MODEL FOR
DISTRIBUTED PROBLEM SOLVING, PRODUCTION AND CAPITAL FORMATION.
Daren C Brabham, Ph.D.
Assistant Professor
University of North Carolina at Chapel Hill
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 5
- 6. CROWDSOURCING CATEGORIES INSIGHTS. RESEARCH. ADVISORY.
CROWDSOURCING WITHIN THE ENTERPRISE
CROWDSOURCING IS AN ONLINE MODEL FOR
DISTRIBUTED PROBLEM SOLVING, PRODUCTION AND CAPITAL FORMATION.
Problem Solving Production Capital Formation
Ideation Micro-tasks o Crowdfunding
Expertise-based tasks ̵ Donation, Reward,
Debt and Equity-based
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 6
- 7. ENTERPRISE CROWDSOURCING MARKET COMPOSITION INSIGHTS. RESEARCH. ADVISORY.
THE ENTERPRISE CROWDSOURCING MARKET MARKET GROWTH AND REVENUE COMPOSITION BY
WAS ESTIMATED TO BE WORTH OVER $500M in SECTOR
2011 AND GREW AT ~75% WHEN COMPARED
TO 2010. Crowdsourcing
Industry revenue
growth 2009-11
Enterprise
crowdsourcing continues While Financial Services
to demonstrate and Manufacturing are key
aggressive and industries driving the
accelerating growth. traditional outsourcing
industry, they show a
Revenues grew relatively low share of the
approximately 53% from crowdsourcing industry at
2009 to 2010 and then 8% and 13% respectively.
accelerated to
approximately 75% from
2010 to 2011. Crowdsourcing
revenue
Almost two thirds of composition by
market revenues are Industry sector,
derived from three 2011
industry sectors: Internet
Services, Media and
Entertainment, and
Technology.
Source: massolution Crowdsourcing Industry Report –
Enterprise Crowdsourcing: Market, Provider and Worker Trends.
http://crowdsourcing.org/l/8346 Source: Massolution
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 7
- 8. ENTERPRISE CROWDSOURCING MARKET COMPOSITION INSIGHTS. RESEARCH. ADVISORY.
INDUSTRY SECTORS WITH HIGH DEMANDS FOR ONLINE CONTENT AND
LEADERS IN eCOMMERCE ARE BIG ADOPTERS OF CROWDSOURCING
eCommerce and Online Publishing
Travel & Retail and Financial Manufacturing Technology Media and Internet Healthcare
Hospitality Distribution Services Entertainment Services
Destination Online Investment Product Digital products Digital media Search engine Healthcare
guides and Catalogues and Crowdsourcing revenue compositionself-help
advice articles descriptions and by industry sector, 2011
and optimized advice and
reviews eCommerce Percentage, based on a guides of 15 CSPs
and specs sample eCommerce content articles
2%
3% OTHER 1%
TRAVEL AND HOSPITALITY HEALTHCARE
6% 29%
RETAIL DISTRIBUTION INTERNET
SERVICES
8%
FINANCIAL SERVICES
13%
MANUFACTURING
20%
18% MEDIA AND
TECHNOLOGY ENTERTAINMENT
(INC. SW and HW)
Source: Crowdsourcing.org, 2011
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 8
- 9. ENTERPRISE CROWDSOURCING MARKET COMPOSITION INSIGHTS. RESEARCH. ADVISORY.
THE ADOPTION OF CROWDSOURCING VARIES MARKET GROWTH AND REVENUE COMPOSITION BY
BY SIZE OF ENTERPRISE SECTOR
Start-ups & small businesses (<$10M in Revenues)
Small enterprise ($10M - $100M in Revenues)
Detailed analysis of clients that have matured
crowdsourcing revenues to the point that they are Medium enterprise ($100M - $1B in Revenues)
by size of enterprise looking to innovate and Large enterprise (>$1B in Revenues)
reveals that the adoption engage constituents in the
pattern varies for each process of product and 2% 3%
23% 40% 10% 30%
category of service development. They 15%
crowdsourcing. are also using 40%
crowdsourcing to create 21% 81%
Expertise-based meaningful engagement 5%
crowdsourcing is the most with customers. 13%
35% Crowdsourcing Industry
diversified in terms of 31% 53%
revenue growth 2009-11
target client segments, it The utilization of 30%
exhibits almost equal crowdsourcing in the form
share of every segment. of Micro-tasks are heavily
utilized by medium size 24% 25%
Ideation is focused enterprises companies 20%
primarily on large and often experiencing high-
medium size enterprise growth.
EXPERTISE- IDEATION MICRO-
BASED TASKS
Source: massolution Crowdsourcing Industry Report –
Enterprise Crowdsourcing: Market, Provider and Worker Trends.
http://crowdsourcing.org/l/8346 Source: Massolution
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 9
- 10. ENTERPRISE PROCESSES INSIGHTS. RESEARCH. ADVISORY.
A TYPICAL ENTERPRISE CONSISTS OF OPERATING PROCESSES
SUPPORTED WITH MANAGEMENT AND SUPPORT SERVICES
ENTERPRISE OPERATING PROCESSES
DEVELOP VISION DEVELOP MARKET DELIVER MANAGE
AND STRATEGY AND MANAGE AND SELL PRODUCTS CUSTOMER
PRODUCTS AND PRODUCTS AND AND SERVICE
SERVICES SERVICES SERVICES
MANAGEMENT AND SUPPORT SERVICES
DEVELOP AND MANAGE HUMAN CAPITAL
MANAGE INFORMATION TECHNOLOGY
MANAGE FINANCIAL RESOURCES
ACQUIRE, CONSTRUCT, AND MANAGE PROPERTY
MANAGE ENVIRONMENTAL HEALTH AND SAFETY
MANAGE EXTERNAL RELATIONSHIPS
MANAGE KNOWLEDGE, IMPROVEMENT, AND CHANGE
Source: American Productivity and Quality Center (APQC)
Source: APQC
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 10
- 11. ENTERPRISE PROCESSES INSIGHTS. RESEARCH. ADVISORY.
PRIORITIZATION IS THE KEY CHALLENGE IN FINDING CROWDSOURCING
OPPORTUNITIES IN THE ENTERPRISE
[RETAIL BANKING EXAMPLE]
ENTERPRISE OPERATING PROCESSES
DEVELOP DEVELOP MARKET DELIVER MANAGE Process categories 5
VISION AND AND MANAGE AND SELL PRODUCTS CUSTOMER Process groups 21
STRATEGY PRODUCTS AND PRODUCTS AND AND SERVICE Processes 102
SERVICES SERVICES SERVICES
MANAGEMENT AND SUPPORT SERVICES
DEVELOP AND MANAGE HUMAN CAPITAL
MANAGE INFORMATION TECHNOLOGY
Process categories 7
MANAGE FINANCIAL RESOURCES Process groups 42
F&A Process Category:
Processes 180
Process groups: 9 ACQUIRE, CONSTRUCT, AND MANAGE PROPERTY
Processes: 26
MANAGE ENVIRONMENTAL HEALTH AND SAFETY
MANAGE EXTERNAL RELATIONSHIPS
MANAGE KNOWLEDGE, IMPROVEMENT, AND CHANGE
Source: American Productivity and Quality Center (APQC)
Source: APQC
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 11
- 12. CsFACTOR ANALYSIS INSIGHTS. RESEARCH. ADVISORY.
PROCESS MAPS ARE REVIEWED FOR EACH PRIORITIZED PROCESS TO
IDENTIFY HIGH POTENTIAL ACTIVITIES
SIMPLIFIED CHECK PROCESSING PROCESS MAP
[CHECK PROCESSING EXAMPLE]
Regular checks
Non-machinable checks Research, Reviews,
Requires extensive manual effort Fraud Analysis
Yes EXCEPTION Exception
PAY
Pre-Encoded PROCESSING Checks
Checks
No
Paper Checks
PROOF AND FINANCIAL INDEX-
SORT
ENCODE CAPTURE ARCHIVE
Repair
CHECK REPAIR MAIL
Reject
Outbound Return
Inbound Return
CHARGEBACK RETURN CAPTURE
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 12
- 13. CsFACTOR ANALYSIS INSIGHTS. RESEARCH. ADVISORY.
TEN PROCESS DIMENSIONS ARE CONSIDERED IN EVALUATING A
PROCESS’ POTENTIAL FOR CONTAINING CROWDSOURCING TASKS
Scoring approach
Dimension Rationale
Low High
Creative work is difficult to convert to Micro-tasks, but works well
Process nature Creative Rule-based
for Expertise-based and Ideation-based CSP s
Process Disaggregated process is easier to integrate into, which applies for
End-to-end Disaggregated
composition both types of tasks
Micro-tasks must have prescriptive workflows, hence can be only
Process goal Progress-oriented Results-oriented
results oriented; this applies less to Expertise-based tasks
Automated tasks with low labor use will result in lower ROI from
Level of automation Automated Manual
crowdsourcing
Security and Expertise-based tasks require broader data access, hence they are
High concern Moderate concern
Privacy more sensitive to privacy
Primarily applies to micro-tasks, which inherently must be
Value drivers Effectiveness Efficiency
efficiency driven
Large processes deliver quicker ROI due to easier transition and
Size and maturity Small/growing Large/mature
lower overall transition costs
Custom systems; Platform-based, few Custom technology and multiple systems/screen presents more
Role of technology
many interfaces interfaces significant integration challenges
Skills that are widely available are easier to crowdsource than those
Skill availability Widely available Low availability
that are hard to find.
Level of Processes that are following the industry standards are better
Industry-standard Client-specific
standardization candidates than client-driven ones
Reliant on external Self-sustained process requires less technology overhead (less
Data Requirements Self-sustained
data interface building) when crowdsourced
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 13
- 14. CsFACTOR ANALYSIS INSIGHTS. RESEARCH. ADVISORY.
A STRUCTURED APPROACH IS ADOPTED TO PRIORITIZE PROCESSES
AND ANALYZE TASKS [F&A EXAMPLE]
Step
1.
Ini+al
focus
Step
2.
Process
priori+za+on
Step
3.
Ac+vity
analysis
F&A Category
Accounts Payable
Accounts Receivable
Payroll
Final
list
of
Vendor Management F&A
ac+vi+es
Capital Accounting
with
crowd-‐
sourcing
Taxation opportunity
Process
prioriBzaBon
resulted
in
Three
Process
Weighted
scorecards
were
over
50
acBviBes
highlighted
as
Categories
within
F&A:
developed
that
included
11
potenBal
targets
for
AP,
AR
and
Payroll
dimensions
against
which
27
crowdsourcing;
further
Processes
were
reviewed
and
prioriBzaBon
idenBfied
eight
rated
to
idenBfy
Processes
that
phase
1
Use
Cases
showed
a
high
potenBal
for
crowdsourcing
acBviBes
and
tasks
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 14
- 15. MARKET SIZE AND POTENTAIL INSIGHTS. RESEARCH. ADVISORY.
CROWDSOURCING PROVIDES MASSIVE OPPORTUNITY FOR
UNDERPENETRATED OUTSOURCING SEGMENTS
intensive
Transaction-
Estimated Market Size (cumulative ACV):
< $1 Billion
F&A IT >$10 Billion
$1-5 Billion
HR
Process Nature
$5-10 Billion
Vertical
Sectors
P
RP 245
KP CRM
Judgment-
intensive
LP
Nascent Market Maturity Mature 15
IT Information Technology RP Recruitment Process Current FS BPO Potential FS BPO
F&A Finance and Accounting KP Knowledge Process
HR Human Resources LP Legal Process
P Procurement CRM Customer Relationship Management
Source: Everest Group, massolution
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 15
- 16. RESEARCH REPORTS INSIGHTS. RESEARCH. ADVISORY.
RESEARCH REPORT DISCOUNT CODES
http://crowdsourcing.org/research
Discount Code (75%) for Crowdfunding Industry Research Report: 04F5WHI8
Direct Link: http://crowdsourcing.org/l/10675
Discount Code (75%) for Crowdsourcing Industry Research Report: Please email research@crowdsourcing.org
Direct Link: http://crowdsourcing.org/l/8346
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 16
- 17. INSIGHTS. RESEARCH. ADVISORY.
ABOUT MASSOLUTION
Crowdsourcing.org is an initiative by massolution. This research has been produced
by massolution, a unique research, advisory, and implementation firm that
specializes in crowdsourcing solutions for private, public, and social enterprises.
We work with leading organizations to deliver crowdsourcing business models that access an on-
demand, scalable workforce to deliver improved business performance and to drive product and
service innovation and enhanced levels of customer engagement.
Our team has experience working in large enterprise environments designing, implementing, and
managing crowdsourcing initiatives.
CROWDSOURCING, LLC
Email: research@crowdsourcing.org www.massolution.com
Twitter: @Crowdsourcing_ www.crowdsourcing.org
m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 17