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Outsourcing: Overview to Crowdsourcing

Throughout the years, outsourcing has become a common business strategy used by big and small companies in order to save overhead expenses through contracting outside firms to do the tasks that the in-house staff cannot perform. People during the Ancient Period like the Egyptians, also outsourced their manpower to the neighboring civilizations in constructing their canals and pyramids. And at the start of Industrial Revolution Period, financiers and capitalists hired the services of third-party suppliers with specific field of specialization for their legal, accounting and machinery needs.

With the rise of Information Technology, outsourcing had branched out into different types. Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO) and Information Technology Outsourcing (ITO) are the most common types of outsourcing. And in conjunction with the development of our technology, the process of outsourcing became more complex.

Today, outsourcing is not only practiced by contracting a single third-party vendor for special services that you needed, but it can be also done by handing the tasks to a large group of participants. Hence, the term ‘crowdsourcing’ was coined.

What is Crowdsourcing?

Crowdsourcing is literally a combination of the words ‘crowd’ and ‘outsourcing.’ Thus, it can be defined as the outsourcing of jobs to a crowd of workers. The practice of crowdsourcing consists of getting the services, ideas or content by soliciting contributions from the community. Through crowdsourcing, it is expected to produce superior results as it follows the principle “more heads are better than one.”

Outsourcing vs. Crowdsourcing

Crowdsourcing is also a type of outsourcing, but unlike the typical outsourcing, the task is given to unknown public workers not associated with a company, whereas in a typical outsourcing process (BPO, ITO and KPO), the project is given to a specific outsourcing company. On the other hand, both outsourcing and crowdsourcing involve online and offline activities.

Types of Crowdsourcing

Crowdsourcing may vary depending on the needs of the client. Below are the common types of crowdsourcing.

  1. Crowd Creation- this type of crowdsourcing involves the process of asking a group of creative people to create something for you. A typical example of this is crowdsourced design projects; you can ask a crowd of creative participants to design a website, a logo, business paraphernalia or anything for you. Just state your budget and your deadline, and you’ll receive a hundred plus different mock-up designs to choose from.
  2. Crowd Funding- as defined in Wikipedia, it is the process of funding your projects by a multitude of people contributing a small amount in order to attain a certain monetary goal. Through crowd funding, you can ask a crowd of donors to support your project by donating money at a period of time.
  3. Crowd Wisdom- it follows the idea of collecting information from the crowd’s knowledge or “wisdom of the crowd.” This platform can be used in problem solving or anything that needs an answer, just ask a pool of willing participants and you can get positive response to your question. Examples of crowd wisdom are Yahoo Answers, Wiki Answers and
  4. Crowd Voting- this type of crowdsourcing is very useful in decision-making situations. For example, your web designer has presented you two design proposals for your website, but you can’t decide which one to choose since both web designs are beautiful. Through crowd voting, ask the help from your target market by voting which design they would prefer for your website. Through this, you will not only come up with a decision, but you will also know the market opinion about your website.
  5. Mircowork/ Microtask- through this platform, you can send little tasks to a group of people to do the work for you and pay them for a little amount of money. In microwork, the task can be finished in no time and without spending too much.


  1. It’s cheaper than outsourcing.
  2. Many people are willing to participate.
  3. You can get superior results from the pool of expert participants.
  4. You can pick the ‘best result’ from the ‘best entries.’
  5. Crowdsourcing produces results faster than the normal outsourcing process.


  1. Cheap labor sometimes produces less credible results compared to the work of professional outsourcing companies.
  2. Managing large scale of workers is also a disadvantage.
  3. The project is outsourced to an undefined public rather than a specific outsourcing company.
  4. Contract does not exist in most crowdsourcing cases, thus there is a tendency that your workers may run any time.
  5. Instructions must be clearly stated to be understood by the crowd workers.

Samples of Crowdsourcing

Wikipedia is a common example of crowdsourcing. Unlike any other online encyclopedias (aside from being free of course), Wikipedia has opened its door to the Internet users by collaborating with them instead of hiring writers and editors to produce its content. Volunteers around the world can write the information on their own and contribute it to create a comprehensive “free online encyclopedia.” Although there are some issues concerning the accuracy of Wikipedia’s articles, we cannot deny the fact that it has become the most popular reference site on the Internet.

Another good example of crowdsourcing is the “It’s More Fun in the Philippines” tourism campaign of the Philippine Government. Instead of outsourcing the project by contracting with a PR company in the promotion of the local tourism, the government is crowdsourcing it to the Filipino public. Social Media users are asked to use the tagline “It’s More Fun in the Philippines” to promote and support the tourism industry in the country.


Crowdsourcing is also a good business strategy for companies who want to lessen their overheads. But just like any other business strategies, crowdsourcing has its own set of pros and cons, thus a proper project evaluation is really needed to determine if crowdsourcing is really necessary or not.

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