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Developing an enterprise crowdsourcing strategy
1.
INSIGHTS. RESEARCH. ADVISORY.
DEVELOPING AN ENTERPRISE CROWDSOURCING STRATEGY Conferencia Crowdsourcing Brazil 3 July 2012 Includes Extracts from massolution’s Crowdsourcing Industry Report m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 1
2.
CROWDSOURCING DEFINITION (OLD)
INSIGHTS. RESEARCH. ADVISORY. CROWDSOURCING DEFINITION 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. m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 2
3.
CROWDSOURCING DEFINITION (OLD)
INSIGHTS. RESEARCH. ADVISORY. CROWDSOURCING DEFINITION 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. m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 3
4.
CROWDSOURCING DEFINITION (OLD)
INSIGHTS. RESEARCH. ADVISORY. CROWDSOURCING DEFINITION 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 m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 4
5.
CROWDSOURCING DEFINITION (NEW)
INSIGHTS. RESEARCH. ADVISORY. CROWDSOURCING DEFINITION 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 m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 5
6.
CROWDSOURCING CATEGORIES
INSIGHTS. RESEARCH. ADVISORY. CROWDSOURCING WITHIN THE ENTERPRISE CROWDSOURCING IS AN ONLINE MODEL FOR DISTRIBUTED PROBLEM SOLVING, PRODUCTION AND CAPITAL FORMATION. Problem Solving Production Capital Formation Ideation Micro-tasks o Crowdfunding Expertise-based tasks ̵ Donation, Reward, Debt and Equity-based m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 6
7.
ENTERPRISE CROWDSOURCING MARKET
COMPOSITION INSIGHTS. RESEARCH. ADVISORY. THE ENTERPRISE CROWDSOURCING MARKET MARKET GROWTH AND REVENUE COMPOSITION BY WAS ESTIMATED TO BE WORTH OVER $500M in SECTOR 2011 AND GREW AT ~75% WHEN COMPARED TO 2010. Crowdsourcing Industry revenue growth 2009-11 Enterprise crowdsourcing continues While Financial Services to demonstrate and Manufacturing are key aggressive and industries driving the accelerating growth. traditional outsourcing industry, they show a Revenues grew relatively low share of the approximately 53% from crowdsourcing industry at 2009 to 2010 and then 8% and 13% respectively. accelerated to approximately 75% from 2010 to 2011. Crowdsourcing revenue Almost two thirds of composition by market revenues are Industry sector, derived from three 2011 industry sectors: Internet Services, Media and Entertainment, and Technology. Source: massolution Crowdsourcing Industry Report – Enterprise Crowdsourcing: Market, Provider and Worker Trends. http://crowdsourcing.org/l/8346 Source: Massolution m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 7
8.
ENTERPRISE CROWDSOURCING MARKET
COMPOSITION INSIGHTS. RESEARCH. ADVISORY. INDUSTRY SECTORS WITH HIGH DEMANDS FOR ONLINE CONTENT AND LEADERS IN eCOMMERCE ARE BIG ADOPTERS OF CROWDSOURCING eCommerce and Online Publishing Travel & Retail and Financial Manufacturing Technology Media and Internet Healthcare Hospitality Distribution Services Entertainment Services Destination Online Investment Product Digital products Digital media Search engine Healthcare guides and Catalogues and Crowdsourcing revenue compositionself-help advice articles descriptions and by industry sector, 2011 and optimized advice and reviews eCommerce Percentage, based on a guides of 15 CSPs and specs sample eCommerce content articles 2% 3% OTHER 1% TRAVEL AND HOSPITALITY HEALTHCARE 6% 29% RETAIL DISTRIBUTION INTERNET SERVICES 8% FINANCIAL SERVICES 13% MANUFACTURING 20% 18% MEDIA AND TECHNOLOGY ENTERTAINMENT (INC. SW and HW) Source: Crowdsourcing.org, 2011 m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 8
9.
ENTERPRISE CROWDSOURCING MARKET
COMPOSITION INSIGHTS. RESEARCH. ADVISORY. THE ADOPTION OF CROWDSOURCING VARIES MARKET GROWTH AND REVENUE COMPOSITION BY BY SIZE OF ENTERPRISE SECTOR Start-ups & small businesses (<$10M in Revenues) Small enterprise ($10M - $100M in Revenues) Detailed analysis of clients that have matured crowdsourcing revenues to the point that they are Medium enterprise ($100M - $1B in Revenues) by size of enterprise looking to innovate and Large enterprise (>$1B in Revenues) reveals that the adoption engage constituents in the pattern varies for each process of product and 2% 3% 23% 40% 10% 30% category of service development. They 15% crowdsourcing. are also using 40% crowdsourcing to create 21% 81% Expertise-based meaningful engagement 5% crowdsourcing is the most with customers. 13% 35% Crowdsourcing Industry diversified in terms of 31% 53% revenue growth 2009-11 target client segments, it The utilization of 30% exhibits almost equal crowdsourcing in the form share of every segment. of Micro-tasks are heavily utilized by medium size 24% 25% Ideation is focused enterprises companies 20% primarily on large and often experiencing high- medium size enterprise growth. EXPERTISE- IDEATION MICRO- BASED TASKS Source: massolution Crowdsourcing Industry Report – Enterprise Crowdsourcing: Market, Provider and Worker Trends. http://crowdsourcing.org/l/8346 Source: Massolution m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 9
10.
ENTERPRISE PROCESSES
INSIGHTS. RESEARCH. ADVISORY. A TYPICAL ENTERPRISE CONSISTS OF OPERATING PROCESSES SUPPORTED WITH MANAGEMENT AND SUPPORT SERVICES ENTERPRISE OPERATING PROCESSES DEVELOP VISION DEVELOP MARKET DELIVER MANAGE AND STRATEGY AND MANAGE AND SELL PRODUCTS CUSTOMER PRODUCTS AND PRODUCTS AND AND SERVICE SERVICES SERVICES SERVICES 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 Source: American Productivity and Quality Center (APQC) Source: APQC m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 10
11.
ENTERPRISE PROCESSES
INSIGHTS. RESEARCH. ADVISORY. PRIORITIZATION IS THE KEY CHALLENGE IN FINDING CROWDSOURCING OPPORTUNITIES IN THE ENTERPRISE [RETAIL BANKING EXAMPLE] ENTERPRISE OPERATING PROCESSES DEVELOP DEVELOP MARKET DELIVER MANAGE Process categories 5 VISION AND AND MANAGE AND SELL PRODUCTS CUSTOMER Process groups 21 STRATEGY PRODUCTS AND PRODUCTS AND AND SERVICE Processes 102 SERVICES SERVICES SERVICES MANAGEMENT AND SUPPORT SERVICES DEVELOP AND MANAGE HUMAN CAPITAL MANAGE INFORMATION TECHNOLOGY Process categories 7 MANAGE FINANCIAL RESOURCES Process groups 42 F&A Process Category: Processes 180 Process groups: 9 ACQUIRE, CONSTRUCT, AND MANAGE PROPERTY Processes: 26 MANAGE ENVIRONMENTAL HEALTH AND SAFETY MANAGE EXTERNAL RELATIONSHIPS MANAGE KNOWLEDGE, IMPROVEMENT, AND CHANGE Source: American Productivity and Quality Center (APQC) Source: APQC m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 11
12.
CsFACTOR ANALYSIS
INSIGHTS. RESEARCH. ADVISORY. PROCESS MAPS ARE REVIEWED FOR EACH PRIORITIZED PROCESS TO IDENTIFY HIGH POTENTIAL ACTIVITIES SIMPLIFIED CHECK PROCESSING PROCESS MAP [CHECK PROCESSING EXAMPLE] Regular checks Non-machinable checks Research, Reviews, Requires extensive manual effort Fraud Analysis Yes EXCEPTION Exception PAY Pre-Encoded PROCESSING Checks Checks No Paper Checks PROOF AND FINANCIAL INDEX- SORT ENCODE CAPTURE ARCHIVE Repair CHECK REPAIR MAIL Reject Outbound Return Inbound Return CHARGEBACK RETURN CAPTURE m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 12
13.
CsFACTOR ANALYSIS
INSIGHTS. RESEARCH. ADVISORY. TEN PROCESS DIMENSIONS ARE CONSIDERED IN EVALUATING A PROCESS’ POTENTIAL FOR CONTAINING CROWDSOURCING TASKS Scoring approach Dimension Rationale Low High Creative work is difficult to convert to Micro-tasks, but works well Process nature Creative Rule-based for Expertise-based and Ideation-based CSP s Process Disaggregated process is easier to integrate into, which applies for End-to-end Disaggregated composition both types of tasks Micro-tasks must have prescriptive workflows, hence can be only Process goal Progress-oriented Results-oriented results oriented; this applies less to Expertise-based tasks Automated tasks with low labor use will result in lower ROI from Level of automation Automated Manual crowdsourcing Security and Expertise-based tasks require broader data access, hence they are High concern Moderate concern Privacy more sensitive to privacy Primarily applies to micro-tasks, which inherently must be Value drivers Effectiveness Efficiency efficiency driven Large processes deliver quicker ROI due to easier transition and Size and maturity Small/growing Large/mature lower overall transition costs Custom systems; Platform-based, few Custom technology and multiple systems/screen presents more Role of technology many interfaces interfaces significant integration challenges Skills that are widely available are easier to crowdsource than those Skill availability Widely available Low availability that are hard to find. Level of Processes that are following the industry standards are better Industry-standard Client-specific standardization candidates than client-driven ones Reliant on external Self-sustained process requires less technology overhead (less Data Requirements Self-sustained data interface building) when crowdsourced m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 13
14.
CsFACTOR ANALYSIS
INSIGHTS. RESEARCH. ADVISORY. A STRUCTURED APPROACH IS ADOPTED TO PRIORITIZE PROCESSES AND ANALYZE TASKS [F&A EXAMPLE] Step 1. Ini+al focus Step 2. Process priori+za+on Step 3. Ac+vity analysis F&A Category Accounts Payable Accounts Receivable Payroll Final list of Vendor Management F&A ac+vi+es Capital Accounting with crowd-‐ sourcing Taxation opportunity Process prioriBzaBon resulted in Three Process Weighted scorecards were over 50 acBviBes highlighted as Categories within F&A: developed that included 11 potenBal targets for AP, AR and Payroll dimensions against which 27 crowdsourcing; further Processes were reviewed and prioriBzaBon idenBfied eight rated to idenBfy Processes that phase 1 Use Cases showed a high potenBal for crowdsourcing acBviBes and tasks m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 14
15.
MARKET SIZE AND
POTENTAIL INSIGHTS. RESEARCH. ADVISORY. CROWDSOURCING PROVIDES MASSIVE OPPORTUNITY FOR UNDERPENETRATED OUTSOURCING SEGMENTS intensive Transaction- Estimated Market Size (cumulative ACV): < $1 Billion F&A IT >$10 Billion $1-5 Billion HR Process Nature $5-10 Billion Vertical Sectors P RP 245 KP CRM Judgment- intensive LP Nascent Market Maturity Mature 15 IT Information Technology RP Recruitment Process Current FS BPO Potential FS BPO F&A Finance and Accounting KP Knowledge Process HR Human Resources LP Legal Process P Procurement CRM Customer Relationship Management Source: Everest Group, massolution m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 15
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RESEARCH REPORTS
INSIGHTS. RESEARCH. ADVISORY. RESEARCH REPORT DISCOUNT CODES 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 research@crowdsourcing.org Direct Link: http://crowdsourcing.org/l/8346 m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 16
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INSIGHTS. RESEARCH. ADVISORY.
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: research@crowdsourcing.org www.massolution.com Twitter: @Crowdsourcing_ www.crowdsourcing.org m.2.2.012 © 2012 Crowdsourcing, LLC | research@crowdsourcing.org PAGE 17
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