
Intro
In the final section of this blog for 157.240 we discuss the topic of crowdsourcing – a portmanteau of crowd & sourcing. It’s a highly relevant topic because it combines a number of key aspects of social media covered in earlier blogs. At the heart of crowdsourcing is the construction of a community bound together by a passion for innovation and developing new ideas. It relies heavily on trust and cuts across many traditional business hierarchical structures combining both a bottom up and top down approach. An important early distinction to be made is that crowdsourcing is NOT crowdfunding, although they share similar characteristics they are different concepts. For those with a passion for the outdoors the recent acquisition of a beach in Awaroa inlet (part of the Abel Tasman National Park) is an example of crowdfunding
Crowdsourcing

Let’s start with a brief description – crowdsourcing involves engaging communities either directly or indirectly (through brokers) where, in a commercial sense, a business seeks a solution from a community in return for a reward. The community bears some risk in trying to solve the business problem (the idea/concept may not work or be selected) and the business (the seeker) defines the problem, reward and many of the conditions and most importantly ownership of the product (Marjanovic, et al., 2012, p. 320). An example of use can be found in my earlier blog on Communities of Practices – refer to the Schneider Electric case study.
The Impact of Social Media on Global Economies
Social technologies have been adopted in record speed – it took radio 38 years to break through 50 million user. Through the advent of the Internet Facebook, on the other hand has passed this milestone in just 1 year, and Twitter within 9 months. A report by the McKinsey Global Institute (MGI) noted that 72% of companies use social technologies but very few use it to its full potential noting that in some sectors of the economy productivity of knowledge workers could be raised by as much as 25% through better utilisation with much of the value lying in enhanced communication, collaboration, and knowledge sharing through top down and bottom up enterprise adoption. Embracing these values is fundamental to a modern business approach to value creation and enterprise management.

The Role of Social Technologies in Enabling Value Creation
It’s generally good form to include a quote from Gartner – here’s what Anthony Bradley (Group Vice President) had to say – “social media technologies are tools and, like any technology, it’s how people use those tools that delivers enterprise results”
The Gartner report recommended using the collective behaviours (listed below) as a link between social media technologies and enterprise value
- Enable collective intelligence for operational effectiveness – such as wiki’s, blogs, YouTube clips etc. is one of the most successful social media adoption trends
- Employ enterprise location for sales effectiveness – defining and developing for example customer focus groups linked through social media applications will improve sales effectiveness
- Unearth emergent structures for operational effectiveness – using social media as a tool to assist organisation, management and communicate across a community to help understand “the nature of things” will help attribute business success
- Increase sales through interest cultivation – a good example of this can be found in one of my recent blogs – a case study on Coca Cola’s social media strategy – Expedition 206
- Engage in mass co-ordination for rapid response – also in my recent Coca Cola blog I outlined the advantages of using competitions, games, and friend get friend viral marketing concept that engage mass co-ordination and response
- Build relationship leverage for brand awareness – a cost effective and low risk approach of using social media
A final poignant quote from Anthony Bradley – “enterprises that understand the importance of harnessing the power of collective behaviour to drive positive business change will be the ultimate winners with social media”
Social Media for Business – Benefits & Drawbacks
Key business benefits through (Cook’s 4 C’s)
- Connection – essential in network building and constructing a base of followers – examples, politicians (not a good one!), Coca Cola,
- Collaboration – harnessing the power of the network, such as communities of practice
- Communication – informal and engaging
- Co-operation – using social media as a means of reach out across the enterprise to breakdown hierarchical barriers and share knowledge for the common goal
The drawbacks
- Change – one of the biggest challenges to an enterprise is moving from a current state to a future state and requires all the elements of Cook’s 4 C’s to drive change
- Culture – best articulated by Cisco with their S.O.C.I.A.L that embeds social media with its culture
- Knowledge – an essential ingredient to success – Scientia potential est! (Francis Bacon)

References
http://www.computerworld.co.nz/tag/crowdsourcing/
Marjanovic, S., Fry, C. & Chataway, J. (2012). Crowdsourcing based business models: In search of evidence for innovation 2.0.Science and Public Policy 39, 318-332.
































