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The term Crowdsourcing was coined by Jeff Howe in 2006. The word debuted in his article “The Rise of Crowdsourcing” in WIRED magazine.

It is a combination of the words “Crowd” and “outsourcing”. Before touching on what Crowdsourcing is, what is outsourcing? Outsourcing is commonly practiced in business and involves hiring a third party (it might be a company or individuals) to perform the tasks at hand. Outsourcing can be done for all kinds of jobs. From cleaning to internet security, every kind of undertaking can be accomplished. The reasons for outsourcing are simple. It reduces costs as it provides an alternate, cheaper option for labor. By allowing a third party to handle particular projects, the in-house employees are made free to undertake affairs of high importance and priority, something they are more competent at. Therefore, it allows the business to accelerate, concentrating on the core capabilities of the company.

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Crowdsourcing uses a concept similar to outsourcing. It employs freelance, volunteers or human resources (basically, the crowd) to accomplish tasks. Crowdsourcing utilizes the internet to remain connected with the crowd. The technique distributes problem-solving. If the company requires a project to be funded, or content to market some of their campaigns or newer projects, the company turns to the crowd to generate capital and gain a broader spectrum of input and advice.

There are many types of Crowdsourcing. For example, Company X wants a new logo to represent it and has shortlisted some of the best entries. It releases this list to a crowd and lets them decide. This is called crowd voting. Suppose, Company X had hired a crowd to design its logo in the first place, it is known as a crowded contest, where the best one is selected. Another type of Crowdsourcing called micro-tasking is when a specific project is handed out to an individual. Company X may also hand out small parts of a larger project to several individuals, this is called microtasking. Crowdfunding, as the name suggests, requests capital from the crowd for determined projects. An example of Crowdfunding is seeking investments for entrepreneurs or start-ups.

Crowdsourcing comes with benefits. Since an organization turns to a crowd, a subset of the vast public, deeds of all kinds can be accomplished. In return for the crowds’ input, they don’t expect much. It reduces costs to the bare minimum while improving and increasing productivity and results to the maximum.

Crowdsourcing isn’t perfect and does come with its flaws as well. Due to the crowd not being employees, they cannot be contained. There is no guarantee that the work they do is authentic. Most of the time, there’s nothing in it for them and the organization’s reputation does not matter to them. They might demand recognition is some or the other way. This puts the organization in a tricky spot as it is prone to backlash and may earn itself a bad reputation in case of mediocre results.

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