Using Crowdsourcing to develop new products and services

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Table of Contents

Introduction
Applications and types of crowdsourcing
Previous studies
Advantages and disadvantages of crowdsourcing
Conclusion
References

Introduction

Crowdsourcing refers to the process of giving some individuals some work or activities to accomplish (Howe 2006; Goodchild & Glennon 2010). Crowding activities can either take place online or offline. Activities that require crowdsourcing are usually complex and tedious (Okolloh, 2009).

However, the involvement of many individuals, who take several portions of the whole project, makes the activities simpler and reduces the period of time required to complete various projects. The term was started by the advent of computing sciences and its applications have extended to many other fields in the recent past.

Proponents of crowdsourcing believe that combined efforts from many people are more economical and rewarding than efforts from an individual. Business brands are integral components for all business organisations. Businesses perform well in the business world because their brands are unique and their products satisfy the needs of customers.

One of the best examples of organizations that have used crowdsourcing in soliciting for ideas is Wikipedia. The online organisation has been using efforts from several people across the world to develop the famous comprehensive encyclopaedia. By doing so, individuals are given the freedom to write information about areas of their interests.

Wikipedia has saved a lot of costs that could have been used to pay individual writers and editors. This topic is important to business organisations because findings on crowdsourcing would give crucial information about the merits and demerits of the business strategy to develop new products and services.

This paper outlines the various types of crowdsourcing used in business and other areas, but focusing on the economic benefits achieved when creating new services and products. It also gives evidence-based applications of crowdsourcing while linking the conclusions of the study findings to the research topic.

This paper also summarises the main ideas of the essay and gives the limitations of the study findings. It also offers future directions for research on crowdsourcing.

Applications and types of crowdsourcing

Crowdsourcing has been shown to help organisations do the following activities: knowledge discovery and management, human intelligence tasking, broadcast searching and peer-vetted creative production (Huberman, Romero, & Wu 2009; Schenk & Guittard 201). An organisation could use crowdsourcing to achieve one or many of the applications.

Various types of crowdsourcing have been proposed for applications in the business field (Leimeister, Huber, Bretschneider & Krcmar 2009). The choice of the type of crowdsourcing depends on the choices made by the management of an organisation and the type of application and desired outcomes.

An organisation could use crowdvoting to gather opinions on a new product and/or service that it would wish to introduce to the market. The opinions received from the large group of people would go a long way in helping the firm to take final products and services that would meet the needs of customers.

This is an economical way of conducting product research because it does not involve taking goods to customers for testing and approval (Poetz & Schreier 2012).

The goal of crowdfunding is to achieve financial targets by requesting the online community to participate in contributions that would culminate in completion of the proposed project. Business organisations could use crowdfunding to get funds to develop unique products and services for customers.

In fact, the funding approach is a sure way of determining the level of customer numbers that would purchase the finished product. If only few people participate in contributing for completion of a product, then it could be an indication that the proposed product would have few customers once it is taken to the market.

On the other hand, massive contributions by the online community would imply that the proposed product would attract many customers once taken to the market.

A business organisation could use creative crowdsourcing to solicit for creative ideas on complex projects, for example, apparel and graphic designs (Brabham 2008). The intention of this type of crowdsourcing would be to find out the designs that would attract customers once a product is completed.

It does not involve paying professionals for their work on projects, but interested individuals are invited to submit their design ideas and interpretations. An organisation could adopt a final project based on the complication of the projects that are reviewed.

Previous studies

Goodchild and Glennon (2010) conducted a study to investigate the usefulness of crowdsourcing on disaster response based on geographical data. The study used geographical data collected from many parts of the world. Quality of the data collected was assessed to determine their relevance and interpretation to the emergency response teams.

It was established that crowdsourcing would be an effective way of handling disasters across the world. Therefore, organisations specialising in disaster response and management would develop approaches based on crowdsourcing information collected from many individuals. This is a cheap way of gathering crucial information.

Through the social media, millions of potential customers meet and discuss their opinions on an organisation’s proposed products. Therefore, organisations would develop their products and/or services cheaply without conducting expensive product research (Alonso, Rose & Stewart 2008; Gao, Barbier & Goolsby 2011).

Competitive advantage of a business organisation helps it to have excellent performance among other businesses. Various businesses have relied on crowdsourcing to develop new products and services, and gain competitive advantage.

Bowonder et al 2010 show that Toyota has used a unique strategy to develop cars. The development of the unique cars has been based on information obtained from large groups of people. The decision by the Toyota management to use crowdsourcing is based on the fact that the automobile markets are ever dynamic, and different customers have different automobile tastes.

The organisation develops cars based on the compilation of data collected from potential customers of its products. Therefore, it does not incur costs that would involve physical product research. The Mayo Clinic has relied on crowdsourcing information to design and develop unique products that are aimed to satisfy patient needs (Füller 2010; Bowonder, Dambal, Kumar & Shirodkar 2010).

Advantages and disadvantages of crowdsourcing

Crowdsourcing is an innovative idea that has many applications, including development of unique products and services. Its main advantage is that it helps to achieve the designed results within a relatively short period of time and with minimal financial costs (Bowonder et al 2010).

A product design from a professional could be achieved within a month, an idea within a week and tasks that are subdivided to groups of people within minutes.

However, crowdsourcing also has disadvantages. The inputs received from the large groups of people either online or offline could be misleading, i.e. not reflecting the real tastes of customers on the ground. The sampling method used to obtain ideas and opinions from people could not be scientifically validated (Greengard 2011).

Thus, the data collected could be biased in terms of accuracy and geographical representations. In addition, crowdsourcing procedures could lead to significant losses when a company relies on the data collected through crowdsourcing without conducting further product research to ascertain the findings (Chanal & Caron-Fasan 2010; Pisano, & Verganti 2008).

Conclusion

Crowdsourcing refers to the process of giving some individuals some work or activities to accomplish. Crowding activities can either take place online or offline. Activities that require crowdsourcing are usually complex and tedious. The use of crowdsourcing in the business world has tremendously increased in the recent past owing to its many successes.

Various business organisations use crowdsourcing to design and develop unique products and services that help them to gain competitive advantage. For example, Toyota has used a unique strategy to develop cars. The development of the unique cars has been based on information obtained from large groups of people.

Also, the Mayo Clinic has relied on crowdsourcing information to design and develop unique products that are aimed to satisfy patient needs. In addition, Wikipedia has been using efforts from several people across the world to develop the famous a comprehensive encyclopaedia.

By so doing, individuals are given the freedom to write information about areas of their interests. Wikipedia has saved a lot costs that could have been used to pay individual writers and editors. The main advantages of crowdsourcing are cheap costs and short duration of completing projects. The disadvantages of crowdsourcing are wrong sampling of respondents and misleading information.

The main limitation of this paper is that it was cross-sectional, and it did not evaluate the usefulness of crowdsourcing in many business organisations. Thus, its scope was limited. In addition, the study did not use primary research methods to collect data from various organisations.

The authenticity of secondary data sources is limited. Crowdsourcing research in the future should increase the scope by analysing more business organisations. In addition, research in the future should aim to use primary sources of data so that authenticity would be increased.

References

Alonso, O, Rose, DE, & Stewart, B, 2008, “Crowdsourcing for relevance evaluation”, ACM SigIR Forum, Vol. 42, No. 2, pp. 9-15

Bowonder, B, Dambal, A, Kumar, S, & Shirodkar, A, 2010, “Innovation strategies for creating competitive advantage”, Research-technology management, Vol. 53, No. 3, pp. 19-32.

Brabham, DC, 2008, “Crowdsourcing as a model for problem solving an introduction and cases”, Convergence: the international journal of research into new media technologies, Vol.14, No. 1, pp. 75-90.

Chanal, V, & Caron-Fasan, ML, 2010, “The difficulties involved in developing business models open to innovation communities: the case of a crowdsourcing platform”, M@ n@ gement, Vol. 13, No. 4, pp. 318-340.

Füller, J, 2010, “Refining virtual co-creation from a consumer perspective”, California Management Review, Vol. 52, No. 2, pp. 98-122.

Gao, H, Barbier, G, & Goolsby, R, 2011, “Harnessing the crowdsourcing power of social media for disaster relief”, Intelligent Systems, IEEE, Vol. 26, No. 3, pp. 10-14.

Goodchild, MF, & Glennon, JA, 2010, “Crowdsourcing geographic information for disaster response: a research frontier”, International Journal of Digital Earth, Vol. 3, No. 3, pp. 231-241.

Greengard, S, 2011, “Following the crowd”, Communications of the ACM, Vol. 54, No. 2, pp. 20-22.

Howe, J, 2006, “The rise of crowdsourcing”, Wired magazine, Vol. 14, No. 6, pp. 1-4.

Huberman, BA, Romero, DM, & Wu, F, 2009, “Crowdsourcing, attention and productivity”, Journal of Information Science, Vol. 35, No. 6, pp. 758-765.

Leimeister, JM, Huber, M, Bretschneider, U, & Krcmar, H, 2009, “Leveraging crowdsourcing: activation-supporting components for IT-based ideas competition”, Journal of management information systems, Vol. 26, No. 1, pp. 197-224.

Okolloh, O, 2009, “Ushahidi, or’testimony’: Web 2.0 tools for crowdsourcing crisis information”, Participatory learning and action, Vol. 59, No. 1, pp. 65-70.

Pisano, GP, & Verganti, R, 2008, “Which kind of collaboration is right for you”, Harvard Business Review, Vol. 86, No. 12, pp. 78-86.

Poetz, MK, & Schreier, M, 2012, “The value of crowdsourcing: can users really compete with professionals in generating new product ideas?”, Journal of Product Innovation Management, Vol. 29, No. 2, pp. 245-256.

Schenk, E, & Guittard, C, 2011, “Towards a characterization of crowdsourcing practices”, Journal of innovation economics, Vol. 1, No. 1, pp. 93-107.

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