An old concept, given new life by instant communication via the internet, crowdsourcing is being used in business in more and more diverse ways.
The term itself was coined in a 2006 article by Jeff Howe for Wired magazine, and refers to the process of obtaining services, content or ideas from a large group of people – usually online.
Crowdsourcing has proved to be a successful way for small and medium sized businesses to access services and skills online, which are otherwise out of their reach.
It can hugely benefit small firms - but there are also downsides.
1. There's no quality control
Crowdsourcing is all about generating a high quantity of work - but that's often at the cost of quality. There is no guarantee the ideas, work or service generated will be of any use as the suppliers are unknown, unsupervised and typically low cost. Finding that golden idea can be a needle in a haystack.
2. It drains project management resource
Although crowdsourcing is a way of outsourcing work or a skill, it creates a loop where to be successful at it, you need to dedicate internal project management resource. Out of thousands of entries you will need to qualify each one. The earliest form of crowdsoucing was the English Dictionary. Over six million entries were voluntarily submitted - which took 70 years to process.
3. There's no security
Crowdsourcing doesn't for written contracts, NDAs or any privacy. You are offering potentially sensitive information into the public domain.
4. It's unregulated
There are no regulations in crowdsourcing. Just ask NASA: it wanted to crowdsource the name of its new station by popular votes and suggestions. It provided a good set of suggested names to help set the tone of the project - but the project was hijacked by comedian Stephen Colbert, who told his legions of fans to vote for his name. He ended up with six times more votes then any NASA suggestion. Naturally, the project was pulled. Colbert, meanwhile, is still searching for someone to name a station after him.
5. There's no brand strategy
Without using a pre-qualified and trained set of staff, long-term brand strategy can be lost from a project.
6. You may expose yourself to your competition
With everything being in a public forum, you are allowing your competitors to have access to your project, concept and content. This will not only give them time to react to your strategy, but also to potentially try to hijack it.