The rise of the internet has made it possible for certain group like problem solvers to form an online community to share ideas and solutions, a great example of such community is Yahoo! Answers. With this kind of idea, where a group can collaborate on certain projects, crowdsourcing comes in.

Crowdsourcing is defined by Wikipedia as the act of outsourcing tasks, traditionally performed by an employee or contractor, to an undefined, large group of people or community (a “crowd”), through an open call. It is a kind of system wherein you have a crowd that would independently work on an assignment that you requested and then they would submit their best effort. From there, you may then pick your favorite submission and pay only that person for their work. I would think of it as a form of work-contest.

Crowdsourcing is not totally different from outsourcing

Outsourcing marketplaces such as oDesk and Elance sometimes falls under crowdsourcing as buyers or those looking to have a project done would post what they need and you have service providers who would bid on a project. However, this is not really crowdsourcing per se.

A good idea on how online crowdsourcing works is that you want a logo and you’re willing to reward someone $300 to provide you with the best design. So post your “project” on website such as Crowdspring.com and wait for the “crowd” to send in their work and you reward the person whose logo you selected. On the other hand, you can go to other community and directly “hire” or outsource the task to a specific person and pay that person directly once the project is done.

With the first situation, if might take forever to wait for a least 3 responses to your project. So if you’re in a rush to get this done, this may not be alternative. An option would be awarding a higher “prize” in order to attract the said crowd.

Crowdsourcing is not for everyone

There are some business models wherein the power of the crowd works. However, it is NOT an alternative to outsourcing. Take for example outsourcing your call center operation; can you use the power of the crowd? Obviously you need an outsource vendor who has the infrastructure, business knowledge, etc. to handle the calls and work with you for a long-term basis.

There is a big debate when it comes to crowdsourcing, to the point that it is being called evil. Crowdsourcing might sometimes be costly like when you want to polish a project to an acceptable level so outsourcing is a better alternative. If you’re dealing with private data, you don’t have any contract so you are risking being attacked. Both crowdsourcing and outsourcing plays a vital role as they are very useful today’s generation of savvy online businesses, depending on how one would capitalize on it and depending on the types of work.

Jessica Byw is a freelancer from the Philippines and is currently working on some projects for an outsourcing marketplace. She has also written some helpful articles on outsourcing as well as her experiences on being a freelancer on TaskArmy’s blog.