Archive | Crowdsourcing

Crowdsourcing saves money

Study Finds Enterprise Crowdsourcing Delivers up to 70% Cost Advantage Compared to Traditional BPO Outsourcing

Everest Group Study Reveals That ‘Private Crowd’ Models are Gaining Traction with Large Organizations with Lower Risk and Higher Quality

Everest Group and Lionbridge Technologies, Inc. today announced the results of a study, “Every Crowd Has a Silver Lining.” The study, which was conducted by Everest Group in collaboration with Lionbridge, revealed that enterprise crowdsourcing is moving up the value chain for an increasing number of organizations due to significant cost advantages, greater flexibility and faster access to a larger pool of globally distributed qualified resources compared to traditional business process outsourcing (BPO) and contingent labor models.

Specific findings of the study can be found here and include:

  • Large corporations are adopting crowdsourcing as a model to support new areas such as content localization, translation to replace traditional BPO and contingent labor staffing models
  • Crowdsourcing offers significant economic advantages – up to 70 percent
    savings – compared to a similar outsourced model in both onshore and offshore service geographies
  • Given the “on-demand” nature of crowdsourcing and the ability to access qualified, globally distributed talent more quickly, employers enjoy compelling wage cost advantages, higher utilization and lower total costs of recruitment, training, supervision and turnover.
  • Mature enterprise crowdsourcing benefits from a third-party intermediary that provides governance, quality assurance and contractor management infrastructure

The study also cited companies that are leveraging crowdsourcing for as much as 50 percent of their product-related projects, such as packaging, design, marketing, research, testing, engineering and technology.

“We are witnessing a second fundamental inflection point for crowdsourcing where large corporations in a post-recession era are increasingly using global professional crowdsourcing services in new application areas, often as a cost-effective alternative to traditional BPO,” said Sarthak Brahma, Practice Director, Pricing Assurance, Everest Group. “Our study finds that crowdsourcing utilization has evolved from small- to medium-sized businesses to an increasingly accepted business practice for large corporations. As cost advantages are progressively augmented by greater accountability, quality assurance and timeliness assurances, the ‘on-demand’ talent model will continue to gain a greater foothold.”

Enterprise crowdsourcing is designed for any company with large-scale contingent staffing needs. It allows corporations to leverage a broad range of creative and technical skills from a pre-qualified global talent pool or “private crowd” to manage and complete business projects. Increasingly, managed service providers are delivering the necessary project management, risk mitigation, contracting and payment mechanisms to allow enterprises to effectively leverage crowdsourcing.

“One effect of the recent global recession is that companies are shifting from ‘job-based’ hiring to ‘task-based’ resource management. This Everest Group study is a valuable resource for organizations that are looking for new ways to reduce costs and increase flexibility through a qualified, managed community of global resources,” said Paul McBride, General Manager Global Crowdsourcing and Search, Lionbridge. “As a pioneer in global crowdsourcing, Lionbridge is helping a growing number of large organizations enjoy the benefits of this new model which include lower overhead and recruiting costs, output-based payments and access to a greater pool of qualified, globally-distributed experts to address new offerings.”

The Everest Group study anticipates an increased demand for professional services providers that are capable of managing the resources of a private crowd to better enable crowdsourcing engagements. In order for buyers to feel secure in crowdsourcing relationships, Everest Group noted that vendors will need to engage with clients as enterprise crowdsourcing service providers, capable of managing private crowds.

Additional Findings

The study also notes that the main business case for enterprise crowdsourcing utilization is relatively low-cost compared to both contingent labor staffing and traditional outsourced labor models. Whether deployed as a spot solution for low end tasks or more broadly viewed as an emerging alternative to traditional sourcing, the advantages are delivered through dramatically lower labor costs and the absence of employee benefits, training or supervision costs, as well as investments in infrastructure, facilities or support. Crowdsourced engagements also offer 100 percent utilization due to the on-demand nature of work being undertaken.

The study also concluded that if crowdsourcing models are to be adopted more broadly by larger enterprises, solutions providers must create a compelling proposition beyond pure cost advantages. The areas most cited include: service level management, oversight and protection of intellectual property, closely mapped recruiting skills, proven ability to perform due-diligence checks on works, arbitrage wage structures and payment and overall project management and accountability.

For more information about the report, please visit research.everestgrp.com, email info@everestgrp.com

Posted in CrowdsourcingComments (0)

The future of work

By Martin Conboy, President – Australian BPO Association (ABPOA)

Last week I attended a symposium, which was hosted by Fuji Xerox called ‘Nextwork’. It was all about exploring the workplace of tomorrow. At the outset, I must say that it was one of the most stimulating and thought-provoking events that I have ever been to. Fuji Xerox had done their homework as they brought together some of the finest minds to share their views about tomorrow. I was amazed by the technology and trends that were presented. Suffice it to say it’s all about the Cloud, Mobility and Location, and there is some exciting new language evolving like, ‘Business colonies’, ‘Anticipatory Analytics’, ‘Cohort Theory’, ‘Disruptive Innovation’ and ‘Continuous Partial Attention’.

At the end of this report I have included some material from the Institute of the Future, which is essential for those interested in further reading.

Breakfast Panel

The Fuji Xerox NextWork symposium started with a scene-setting breakfast panel that included Peter Ulm, Desktop & Productivity Lead – (Microsoft), Steve Godbee, A/NZ Integration Leader & CIO- (IBM), Scott Mason, Director of Products – (Optus), Kevin Bloch CTO – (Cisco) and Beth Winchester Exec. GM HR – (Fuji Xerox), during the breakfast we were treated to a glimpse of the future of work.

There was a lot of discussion around the physical work space and what would that look like in the future and how we would not necessarily ‘own’ the space that we occupied in a concrete sense as there would be a lot more ‘Hot Desking’ that would cater for disparate work groups that would only come together for special events and projects. There was talk about using new technologies like Skype to video conference and people bringing their own internet connecting device to work, (smart phone/tablet/ laptop etc.) as companies of the future would not impose restrictions on the tools one needs to do one’s job – think converging technologies, cloud and thin clients, yet using your own internet access device.

Looking forward, the panel agreed that a lot more people would work remotely away from their employer’s physical location and that has implications for how real estate features into the mix: this will give metropolitan building owners and managers heart palpitations as in the future people will not go to where the work is, as we do now, in the future the work will go to where the people are. In Australia with the roll out of the National Broadband network (NBN) we will see the resurgence of rural and regional Australia as people opt for a work life balance and do away with the long commute and congested living.

Of course, if mobility is going to be one of the underlying trends then loss of the gateway devices (who has not accidently left a smart phone or laptop in a taxi?) will have to be a consideration and it was suggested by the panel that these devices would not actually hold data on them per se as all data would be housed in the cloud so that it can be accessed anywhere, anyhow, anytime by anything so long as one has the relevant access codes. In other words, data will be the most important asset in the future and being able to access it, not the devices that the data is on.

In order to make sure that we are offering services that our customers want and need, we will use tools like ‘crowd sourcing’ to engage with customers to solve business and marketing problems. We will have to get used to collaborating outside of the standard business framework and work with our own communities of interest, workgroups, and social networks to test our ideas.

If data is the key, the future will allow us to extract unprecedented analytical information. Therefore, there is the potential to get bogged down with data overload. The business issues will be around making sense of it all: how do we manage data; what business intelligence tools will we need; how will we extract data and use it in a meaningful way.

Presentation one

The first bespoke presentation was given by Mike Walsh, CEO of the innovation research agency, “Tomorrow”. Walsh determined that with new and different ways to interact with customers and more flexible ways for employees to work, there would need to be a rethink about how we create frameworks that bring out the best in people. “Unless you understand the underlying culture of what drives your employees, you cannot build the office of the future”, he said. He went on to say, “even though employees will work from remote locations like their home, they still crave social contact”. Walsh gave an example of a hotel in New York that offered Wi-Fi and an environment where freelancers would come together with others to have a sense of community and a collegiate atmosphere that would not be possible if they were working in isolation from home.

Walsh gave some other great examples that are already being used today in Japan, where people use their mobile phones to scan bar codes on posters in railway stations to buy their groceries. Perhaps his most important point was that the companies of the future would be built around a core of data. He also brought into the discussion some concepts around social anthropology as a prism to make sense of the future. He said that 56% of students nearing graduation would not work for a company that blocked FaceBook and Twitter.
Walsh also pushed ‘Cohort Theory’. Generational cohort theory argues that events, social change and even pop culture affects the values, beliefs, attitudes and ultimately behaviour of individuals. According to this perspective, a generation is less about the age of a group but more about their shared experience in their youth.

Another subject that he touched on was ‘Disruptive Innovation’. The term disruptive innovation as we know it today first appeared in the 1997 bestseller, ‘The Innovator’s Dilemma’. In the book, Harvard Business School Professor Clayton Christensen investigated why some innovations that were radical in nature reinforced the incumbent’s position in a certain industry. Christensen analysed extensively the disk drive industry because it represented the most dynamic, technologically discontinuous and complex industry one could find in our economy. Just consider that the memory capacity packed into a square inch of disk increased by 35% per year, from 50 kilobytes in 1967 to 1.7 megabytes in 1973, 12 megabytes in 1981 and 1100 megabytes in 1995.

Disruptive innovation will often have characteristics that traditional customer segments may not want, at least initially. Such innovations will appear as cheaper, simpler and even with inferior quality if compared to existing products, but some marginal or new segment will value it.

Operating under such a value network might lead a company to “listen too much” to its main customers. As a result, it will not recognise potentially disruptive innovations that serve only marginal customers. Secondly, large companies will not be interested in small markets; they hardly offer significant growth opportunities. Again this will lead companies to completely ignore the disruptive innovation or to wait until the market is “large enough to be attractive”. That is exactly when new entrants attack incumbent’s turf, and by that time it is usually too late.

The physical and digital worlds are converging at a speed predicted by very few. According to IDC, the world’s information is doubling every two years.

Walsh spoke about Continuous Partial Attention (CPA), which is the process of paying simultaneous attention to a number of sources of incoming information, i.e. customer feedback, warehouse withdrawals, and website hits, but at a superficial level.

The term was coined by Linda Stone in 1998. Author, Steven Berlin Johnson, describes this as a kind of multitasking: “It usually involves skimming the surface of the incoming data; picking out the relevant details and moving on to the next stream. You’re paying attention, but only partially. CPA lets you cast a wider net but it also runs the risk of keeping you from really studying the fish”.

Presentation two

Dr. Thomas Frey, a futurist and Executive Director at the DaVinci Institute and Google’s top rated futurist speaker, a man with a seriously bright mind gave a brilliant presentation around the secret language of the future. He presented his theory about how the future gets created. He explained how we could influence the future by using social media and other unusual techniques for both understanding and gaining control of our own futures.

Frey put forward a proposition that in the future, workgroups would come together in much the same way that Hollywood comes together to make a movie and then break up after the project is over. “The future gets created in the minds of everyone around us. Virtually everyone has a hand in it, but not all contributions are equal. As you might imagine, a small group of people armed with powerful ideas can make a disproportionately large impact.”

“But creating the future needs to involve much more than just ideas. The ideas create a starting point but need to be put into a visual context, massaged, enhanced, and somehow made to spring to life.”
Frey spoke about ‘Business Colonies’. Business colonies are an evolving, new kind of organisational structure designed around matching talent with pending work projects. The operation will revolve around some combination of resident people based in a physical facility and a non-resident virtual workforce. Some will forego the cost of the physical facility completely, opting instead to form around an entirely virtual communications structure.

Most will be organised around a topical area best suited for the talent base of the core team. As an example, a team of photonics engineers will attract projects best suited for that kind of talent. Likewise, a working group of programmers specialising in computer gaming applications will serve as a magnet for new gaming projects.

In some instances, large corporations will launch their own business colonies as a way to expand capability without adding to their headcount. Staffed with a few project managers, the company will use the colony as a proving ground for experimental assignments best performed outside of the cultural bounds of existing workflow.

Xerox Presentations

The next two presentations were given by ‘holograms’ (very cool) of the presenters, the first ‘hologram’ was Francois Ragnet from Xerox’s Technology Innovation, French-based Think Tank, and he spoke about a ‘less paper’ office. As Xerox is a ‘green’ company, he chose not to enlarge his carbon footprint by not actually coming to Australia in person, so he came as a ‘hologram’. Ragnet presented some scary statistics such as 20% of all documents that printed are not actually picked up and 40% are discarded the next day – imagine the impact on our forests if we eliminated such waste from our business processes!

Dr. Larry Rowe of Xerox’s Palo Alto, California Research Labs also beamed in as a hologram. Rowe laid out a presentation around the importance of fostering teamwork in a disparate mobile workforce and that collaboration was the key. He argued that combining low cost computing, storage, and communication with powerful mobile devices is changing the nature of work and everyday life today. Rowe also spoke about how organisations need to think about how to use the physical place itself as a part of the information toolkit along with laptops, mobile phones, and printers. The need to manage large volumes of complex visual information will lead to workplace design needs that expand the size and scope of digital displays.

In summary, the future is looming up very quickly, and the old command and control way of running our businesses is passing. For most of us, it’s a work in progress; some will still want to hang on to the old ways and resist change.

There is only one constant in business and that is change, as my first boss told me, “if you are not going forward, then you are gong backwards.”

To support your thinking, I found this – Institute of the Future – www.iftf.org

For every forecast there exists a litany of potential implications. By drawing out the most crucial implications from each of our six main themes, we attempt to address the complexity of the future with a set of pointers that will help organisations better prepare for what’s to come.

The following implications are a result of that work, and we thank the participants for their insight. Even though they are embedded within the narratives of The Future of Work Perspectives (SR-1092A) and are part of each story we tell in this set of forecasts, we’ve included the implications here as well, because recognising them is instrumental to getting there early. These are by no means the only implications. So take some time to reflect on them, and add to them as you plan your action steps to prepare for the future of work.

1. ORGANISATIONAL CULTURE AND DESIGN: PLAN FOR TRANSPARENCY

The evolution of technologies for ubiquitous, detailed, real-time reporting on everything means that almost every aspect of organisational life can be exquisitely documented and tracked. Organisations should plan for transparency from the outset in order to stay ahead; concealing anything will become increasingly difficult. Avoiding accountability will also get harder, and moving operations somewhere else in order to avoid accountability will not be a viable long-term solution. Companies that have tried to hide pollution by “outsourcing” polluting activities to subcontractors are likely to have to account for them. Organisations should err on the side of transparency, resorting to secrecy only when absolutely necessary and as a last resort. Now is the time to examine all aspects of your operations—from human resources to manufacturing and distribution—through the transparency lens.

2. TOOLS: PHYSICAL PLACE IS A PART OF THE TOOLKIT

An important outcome of the visible world will be the convergence of computational tools and the physical workplace. Organisations need to think about how to use the physical place itself as a part of the information toolkit along with laptops, mobile phones, and printers. The need to manage large volumes of complex visual information will lead to workplace design needs that expand the size and scope of digital displays, while also spreading access to “windows” on data into non-traditional spaces for computing hallways, social spaces like water coolers, and outdoors. Plan for workplaces that enable “progressive disclosure,” i.e., the ability to reveal higher-level functionality, as users are ready for them.

3. PHYSICAL SPACE: DESIGNING FOR HEALTH

Healthy workplaces are no longer just about a lack of harmful toxins, fluorescent lights and cubicles are giving way to green spaces and sunlight. Bio-Citizens will expect workplaces that reflect their understanding of health as a value. Successful future workplace design will bring together large-scale architectural understanding of the workplace community, healthy spaces, anthropological understanding of small group dynamics, and information science. Ergonomic consultations will go from optional to mandatory as employers strive to ensure that their employees are healthy and, as a result, productive. Sensors and other advanced technologies will help to make the “healthiness” of the work environment visible. Offering incentives for healthy behaviour could prove a good way to attract Bio-Citizens, but watch out for making such incentives coercive and, thus, perceived as paternalistic and intrusive.

4. RECRUITMENT: ATTRACTING – BUT NOT NECESSARILY HIRING – THE BEST

Achieving the diversity required to amplify organisations means tapping into multiple intelligences, work styles, skills, media choices, and geographies. The products of collective intelligence are successful because each person makes contributions in the area she chooses and in the manner that suits her best. For an organisation to amplify itself, it must tap the external network of non-employees and entice them to contribute in the areas of their expertise. Beyond hiring, the goal must be to attract, engage, and connect amplified individuals to the organisation so that they view it as the most important and powerful node in their highly networked and distributed career paths. Organisations need to think in ways that suit these individuals rather than traditional promotions and compensation packages—increased freedom, ability to choose particular projects, ability to publish outside, etc.

5. SKILLS: TRAINING IN VISUAL LITERACY

Organisations and individuals will have to use new types of highly sensory- rich interfaces—artistic visualisations, simulations, and ambient and other interfaces utilising sound, movement, colours, etc.—to take advantage of massive amounts of data flooding the workplace. The next generations of workers will need to possess visual literacy and have the ability to present, analyse, and interact with visual information. Visual acumen is a survival skill in the future workplace. Younger workers who have grown up in the world of video games and virtual reality will naturally be more adept at this, but just because someone is younger doesn’t mean they will automatically possess such skills. Think about how to promote visual literacy standards for your organisation, how to identify those with the best visual skills, and how to train employees to become proficient in dynamic, image-moderated collaborative explorations of data.

6. HUMAN RESOURCES: MATHEMATICIANS AND NEUROSCIENTISTS?

Hiring practices, training, and management will draw from a deeper understanding of neuroscience and complex behavioural algorithms. Already, start-ups have emerged that promise to train individuals to increase their mental acuity, focus, and efficiency based on brain science. Company- specific algorithms will be developed for software that vets new applicants based on detailed questionnaires. As science comes to work, human resource managers will need to become versed in these new sciences. While most HR personnel will likely not be scientists, they will need to be able to understand the language of these disciplines and collaborate with scientists in order to assess and implement some of the new tools. A manager may not know how to design Monte Carlo simulations to optimise workflow, but he must be able to speak the language of mathematicians to understand the theory behind suggested methods.

7. LEADERSHIP: GIVING VOICE TO THE COMMONS

The world of amplified individuals calls for a different type of leader—not ones who dictate and make pronouncements, and not necessarily those with the most charisma and unitary vision. Rather than assuming absolute authority, effective leaders in amplified organisations must work to understand the values and opinions of their employees to enable a productive dialogue about what the group embodies, what it stands for, and, thus, how it should act.

Good leaders will increasingly need to see themselves as “speakers for the commons”—those who are able to give voice to what the commons members, including non-employees, want, and to provide the infrastructure and resources for accomplishing this. It doesn’t mean the end of vision; the vision of amplified organisations is not enforced from the top but emerges in dialogue and conversations from the bottom up, dependent upon cooperation and support of constituents.

Institute for the Future www.iftf.org

Posted in ABPOA, Business, Cloud Computing, Conferences, Crowdsourcing, Environment, Events, News Archive, Working from HomeComments (3)

Crowdsourcing: Everyone is doing it

By Mark Atterby – Senior Staff Writer

In a small room somewhere in Asia, a person sits hunched over a computer. Her design concept for a new logo for an Australian wholesale and distribution business was selected out of the 100s that were submitted from around the world. Not only was her design concept the freshest and most relevant from those submitted, it was the cheapest. She saw the request on the Internet and responded.

Crowdsourcing is tapping, directly into a universe of ideas, and giving previously hidden and hard to get too talent the chance to shine.

The voice of the crowd has never been louder. Anyone can turn themselves into a citizen journalist with a bull horn. We tweet, we blog, we broadcast, we offer ideas and opinions from our personal computers and smart phones. Now businesses of all sizes are harnessing that collective creativity through Crowdsourcing – a trend that is taking problem solving to the world.

Crowdsourcing is a call to the masses using the internet; an invitation to anyone to come up with creative ideas about anything from a new design concept to how to make the world a better place.

It is a form of outsourcing, where tasks, traditionally performed by employees or contractors are given to an undefined, large group of people or community through an open call for submissions. Businesses such as Vegemite and Telstra have used crowd sourcing to tap into the ideas of a mass audience and customer base to come up with product, service and branding ideas.

Alec Lynch, managing director of DesignBay defines crowd sourcing as “outsourcing on steroids.” He believes: “the chief benefit of crowdsourcing is the ability to harness multiple suppliers to work on one project. It’s also lower risk because there’s no need to tie yourself to a single supplier. It also drives better responses and quality of work compared to the traditional outsourcing model because suppliers don’t become complacent.”

The term, combining crowd and outsourcing, was first coined by Jeff Howe in his article “The Rise of Crowdsourcing,” that appeared the June 2006 edition of Wired magazine. The article explored how, due to the technological advances in developing cheap consumer electronics, the gap between professionals and amateurs has greatly narrowed.

How it works is, an organisation submits an open call for submissions to an undefined group of people to perform a task or contribute ideas or concepts to a project. The organisation then takes those people on board who are most able to perform the task, solve the problem or contribute the most innovative and fresh ideas.

Leveraging the collaboration technology of Web 2.0, the concept has become popular with numerous businesses and organisations of all shapes and sizes, including government and non-for-profit organisations as well as small business through to major corporations. The benefits associated with crowdsourcing can include:

  • Problems can be explored at comparatively little cost and potentially very quickly
  • Payment is by results or none is required
  • The organisation can tap a much wider pool of talent
  • Organisations can gain greater insight on their customers and what’s happening in their market places.

A special type of Crowdsourcing is Buddy sourcing. Buddy sourcing is combination of Crowdsourcing and the word-of-mouth principles. It is defined by Magagna as “the outsourcing of task, traditionally performed by an employee or a company, to the social networks (friends/buddies) of the individuals in a community through online task forwarding.”

Futurist Ross Dawson commented recently: “Online services exchanges are places where anyone anywhere can get people to perform services; it’s about the development of a global talent economy. Some services are commoditised – you might want someone to count the number of tennis balls in a photo for the lowest price possible. But they also allow you to find the best person for the job and price isn’t always the primary factor why you hire someone, sometimes it’s more about finding talented people. I use Odesk and the last person I hired wasn’t in Egypt or Latvia – he was in New York.”

“Collaboratition” describes a type of crowd sourcing used for problems that require a collaborative or cooperative effort to be successful, but use competition as a motivator for participation or performance. A good example of collaboratition is the 2009 DARPA experiment in crowd sourcing. DARPA placed 10 balloon markers across the United States and challenged teams to compete to be the first to report the location of all the balloons. Collaboration of efforts was required to complete the challenge quickly and in addition to the competitive motivation of the contest as a whole, the winning team (MIT, in less than seven hours) established its own “collaborapetitive” environment to generate participation in their team.

Another form of collaboration can be found in the term of Crowd Funding inspired from crowdsourcing. Crowd Funding collaboration takes on a different role, describes the collective cooperation, attention and trust by people who network pooling their money together, usually via the Internet, in order to support efforts initiated by other people or organizations. Crowd Funding occurs for any variety of purposes, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns. “The Age of Stupid” is perhaps the most publicized and successful case to-date; this film raised $1.2 million via crowd funding, and also used crowd sourcing to distribute and exhibit it around the world.

However, the term crowd sourcing and the various practices associated with it have attracted controversy and criticisms. Crowdsourcing doesn’t always produce quality results. Also the management of so many different suppliers can create administrative burdens and prevent consistency in performance. As a result professional agency brokers, have emerged where the crowd is vetted in advance and the exchange between the crowd and the organisation is facilitated.

Posted in Crowdsourcing, featured, News Archive, OutsourcingComments (0)