Developing an enterprise crowdsourcing strategy

© 2012 Crowdsourcing, LLC | [email protected] m.2.2.012 PAGE 1

INSIGHTS. RESEARCH. ADVISORY.

DEVELOPING AN ENTERPRISE

CROWDSOURCING STRATEGY Conferencia Crowdsourcing Brazil

3 July 2012

Includes Extracts from massolution’s Crowdsourcing Industry Report



CROWDSOURCING DEFINITION

CROWDSOURCING DEFINITION (OLD)

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




CROWDSOURCING DEFINITION (NEW)

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


INSIGHTS. RESEARCH. ADVISORY. CROWDSOURCING CATEGORIES

CROWDSOURCING IS AN ONLINE MODEL FOR

DISTRIBUTED PROBLEM SOLVING, PRODUCTION AND CAPITAL FORMATION.

  Problem Solving   Ideation

  Production   Micro-tasks   Expertise-based tasks

  Capital Formation o Crowdfunding ̵  Donation, Reward,

Debt and Equity-based

CROWDSOURCING WITHIN THE ENTERPRISE



MARKET GROWTH AND REVENUE COMPOSITION BY

SECTOR

Source: Massolution

ENTERPRISE CROWDSOURCING MARKET COMPOSITION

Enterprise crowdsourcing continues to demonstrate aggressive and accelerating growth.

Revenues grew approximately 53% from 2009 to 2010 and then accelerated to approximately 75% from 2010 to 2011.

Almost two thirds of market revenues are derived from three industry sectors: Internet Services, Media and Entertainment, and Technology.

While Financial Services and Manufacturing are key industries driving the traditional outsourcing industry, they show a relatively low share of the crowdsourcing industry at 8% and 13% respectively.

THE ENTERPRISE CROWDSOURCING MARKET

WAS ESTIMATED TO BE WORTH OVER $500M in

2011 AND GREW AT ~75% WHEN COMPARED

TO 2010.

Source: massolution Crowdsourcing Industry Report – Enterprise Crowdsourcing: Market, Provider and Worker Trends. http://crowdsourcing.org/l/8346

Crowdsourcing revenue composition by Industry sector, 2011

Crowdsourcing Industry revenue growth 2009-11



INDUSTRY SECTORS WITH HIGH DEMANDS FOR ONLINE CONTENT AND LEADERS IN eCOMMERCE ARE BIG ADOPTERS OF CROWDSOURCING


29%

20% 18%

13%

8%

6%

3% 2%

1%

Source: Crowdsourcing.org, 2011

TECHNOLOGY (INC. SW and HW)

MEDIA AND ENTERTAINMENT

MANUFACTURING

HEALTHCARE OTHER

TRAVEL AND HOSPITALITY

RETAIL DISTRIBUTION

FINANCIAL SERVICES

INTERNET SERVICES

Crowdsourcing revenue composition by industry sector, 2011 Percentage, based on a sample of 15 CSPs

eCommerce and Online Publishing

Travel & Hospitality

Retail and Distribution

Financial Services

Manufacturing Technology Media and Entertainment

Internet Services

Healthcare

Destination guides and reviews

Online Catalogues and eCommerce

Investment advice articles

Product descriptions and specs

Digital products and self-help guides

Digital media and eCommerce

Search engine optimized content

Healthcare advice and articles



MARKET GROWTH AND REVENUE COMPOSITION BY

SECTOR

Source: Massolution


Detailed analysis of crowdsourcing revenues by size of enterprise reveals that the adoption pattern varies for each category of crowdsourcing.

Expertise-based crowdsourcing is the most diversified in terms of target client segments, it exhibits almost equal share of every segment.

Ideation is focused primarily on large and medium size enterprise

clients that have matured to the point that they are looking to innovate and engage constituents in the process of product and service development. They are also using crowdsourcing to create meaningful engagement with customers.

The utilization of crowdsourcing in the form of Micro-tasks are heavily utilized by medium size enterprises companies often experiencing high-growth.

THE ADOPTION OF CROWDSOURCING VARIES

BY SIZE OF ENTERPRISE

Source: massolution Crowdsourcing Industry Report – Enterprise Crowdsourcing: Market, Provider and Worker Trends. http://crowdsourcing.org/l/8346

EXPERTISE-BASED

IDEATION MICRO- TASKS

24% 20%

81%

53% 31%

25%

30%

15%

13% 21%

35%

40%

3%

5%

23% 40% 10% 2%

30%

Start-ups & small businesses (<$10M in Revenues)

Small enterprise ($10M - $100M in Revenues)

Medium enterprise ($100M - $1B in Revenues)

Large enterprise (>$1B in Revenues)

Crowdsourcing Industry revenue growth 2009-11


INSIGHTS. RESEARCH. ADVISORY. ENTERPRISE PROCESSES

Source: American Productivity and Quality Center (APQC)

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

ENTERPRISE OPERATING PROCESSES

DEVELOP VISION AND STRATEGY

DEVELOP AND MANAGE PRODUCTS AND SERVICES

MARKET AND SELL PRODUCTS AND SERVICES

DELIVER PRODUCTS AND SERVICES

MANAGE CUSTOMER SERVICE

A TYPICAL ENTERPRISE CONSISTS OF OPERATING PROCESSES SUPPORTED WITH MANAGEMENT AND SUPPORT SERVICES

Source: APQC


INSIGHTS. RESEARCH. ADVISORY. ENTERPRISE PROCESSES

Source: American Productivity and Quality Center (APQC)

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

ENTERPRISE OPERATING PROCESSES

DEVELOP VISION AND STRATEGY

DEVELOP AND MANAGE PRODUCTS AND SERVICES

MARKET AND SELL PRODUCTS AND SERVICES

DELIVER PRODUCTS AND SERVICES

MANAGE CUSTOMER SERVICE

Source: APQC

Process categories 5 Process groups 21 Processes 102

Process categories 7 Process groups 42 Processes 180

[RETAIL BANKING EXAMPLE]

F&A Process Category:

Process groups: 9 Processes: 26

PRIORITIZATION IS THE KEY CHALLENGE IN FINDING CROWDSOURCING OPPORTUNITIES IN THE ENTERPRISE



PROCESS MAPS ARE REVIEWED FOR EACH PRIORITIZED PROCESS TO

IDENTIFY HIGH POTENTIAL ACTIVITIES

CsFACTOR ANALYSIS

[CHECK PROCESSING EXAMPLE] SIMPLIFIED CHECK PROCESSING PROCESS MAP

Regular checks

Non-machinable checks

Pre-Encoded Checks

INDEX-ARCHIVE

PROOF AND ENCODE

FINANCIAL CAPTURE SORT

Paper Checks

EXCEPTION PROCESSING

Yes Exception Checks

Research, Reviews, Fraud Analysis

Inbound Return

Outbound Return

No

PAY

MAIL CHECK REPAIR Reject

Repair

RETURN CAPTURE CHARGEBACK

Requires extensive manual effort


INSIGHTS. RESEARCH. ADVISORY. CsFACTOR ANALYSIS

TEN PROCESS DIMENSIONS ARE CONSIDERED IN EVALUATING A

PROCESS’ POTENTIAL FOR CONTAINING CROWDSOURCING TASKS

Dimension Scoring approach

Rationale Low High

Process nature Creative Rule-based Creative work is difficult to convert to Micro-tasks, but works well for Expertise-based and Ideation-based CSP s

Process composition End-to-end Disaggregated Disaggregated process is easier to integrate into, which applies for

both types of tasks

Process goal Progress-oriented Results-oriented Micro-tasks must have prescriptive workflows, hence can be only results oriented; this applies less to Expertise-based tasks

Level of automation Automated Manual Automated tasks with low labor use will result in lower ROI from crowdsourcing

Security and Privacy High concern Moderate concern Expertise-based tasks require broader data access, hence they are

more sensitive to privacy

Value drivers Effectiveness Efficiency Primarily applies to micro-tasks, which inherently must be efficiency driven

Size and maturity Small/growing Large/mature Large processes deliver quicker ROI due to easier transition and lower overall transition costs

Role of technology Custom systems; many interfaces

Platform-based, few interfaces

Custom technology and multiple systems/screen presents more significant integration challenges

Skill availability Widely available Low availability Skills that are widely available are easier to crowdsource than those that are hard to find.

Level of standardization Industry-standard Client-specific Processes that are following the industry standards are better

candidates than client-driven ones

Data Requirements Self-sustained Reliant on external data

Self-sustained process requires less technology overhead (less interface building) when crowdsourced


INSIGHTS. RESEARCH. ADVISORY. CsFACTOR ANALYSIS

Step 1. Ini+al focus Step 2. Process priori+za+on

F&A Category

Accounts Payable

Accounts Receivable

Payroll

Vendor Management

Capital Accounting

Taxation

Three Process Categories within F&A: AP, AR and Payroll

Weighted scorecards were developed that included 11 dimensions against which 27 Processes were reviewed and rated to idenBfy Processes that showed a high potenBal for crowdsourcing acBviBes and tasks

Step 3. Ac+vity analysis

Final list of F&A ac+vi+es with crowd-‐sourcing opportunity

Process prioriBzaBon resulted in over 50 acBviBes highlighted as potenBal targets for crowdsourcing; further prioriBzaBon idenBfied eight phase 1 Use Cases

A STRUCTURED APPROACH IS ADOPTED TO PRIORITIZE PROCESSES

AND ANALYZE TASKS [F&A EXAMPLE]



Proc

ess

Nat

ure

Judg

men

t-in

tens

ive

Tran

sact

ion-

inte

nsiv

e

Market Maturity Nascent Mature

F&A

Vertical Sectors

RP

KP

LP

CRM

P

HR

IT

CROWDSOURCING PROVIDES MASSIVE OPPORTUNITY FOR

UNDERPENETRATED OUTSOURCING SEGMENTS

MARKET SIZE AND POTENTAIL

Source: Everest Group, massolution

15

245

Current FS BPO Potential FS BPO

Estimated Market Size (cumulative ACV): < $1 Billion

$1-5 Billion >$10 Billion

$5-10 Billion

IT Information Technology F&A Finance and Accounting HR Human Resources P Procurement

RP Recruitment Process KP Knowledge Process LP Legal Process CRM Customer Relationship Management



RESEARCH REPORT DISCOUNT CODES

RESEARCH REPORTS

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 [email protected] Direct Link: http://crowdsourcing.org/l/8346



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: [email protected] www.massolution.com

Twitter: @Crowdsourcing_ www.crowdsourcing.org

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Developing an enterprise crowdsourcing strategy