Crowdsourcing can be a valuable tool for an enterprise, but comes with its share of disadvantages. Crowdsourcing is when a company outsources some aspect of production, that may be traditionally done internally, to non-employees and consumers, usually via an open call on the internet. Crowdsourcing emerged with the invention of the Web 2.0 and in the context of expanding self-service capabilities in all branches of commerce and industry. Companies who utilize this strategy seek to inexpensively harness the knowledge and creativity of a wide base of participants for value creation. A prevalent example of crowdsourcing can be seen in any case where customers can submit new ideas, designs, or suggestions for improvement. Crowdsourcing businesses may collect user reports on new trends, new products, or any news outsiders might be willing to pay for.
There are drawbacks however. Crowdsourcing is possible only when its costs are low and the interaction brings benefits to all participants. Customers who submit their ideas rarely receive adequate financial compensation for the work involved and cheap labor may result in loss of quality compared to hired professionals. For this reason, any task with a degree of difficulty greater than simple, is risky for crowdsourcing. A successful use of crowdsourcing can be seen in CNN who rely on amateur reporters to submit short articles, photos, or videos for publication or broadcast. CNN allows its amateur reporters to make submissions, even via cell phone, but offers no compensation for voluntarily submitted material.
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