Crowdsourcing for MHRIL

8/7/2019 Crowdsourcing for MHRIL

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Mahindra Holidays and Resorts India LimitedCrowdsourcing For MHRIL

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Crowdsourcing for MHRIL

Mentored by:

Shri Aniruddha Haldar

Marketing head, MHRIL

Guided by:

Shri Harinath M

Head – New product development, MHRIL

Project by:

Arjit Jain

GMC – 2011






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Introduction Many of you might have heard about crowdsourcing and for many thismight be the first time. It is not a rocket science to understand it but if successfully implemented in business it definitely holds Rocket profits.

The term " crowdsourcing " is a portmanteau of " crowd " and"outsourcing ", first coined by Jeff Howe in a June2006 Wired magazine article "The Rise of Crowdsourcing". The basicpremise is that a task normally performed by a regular paid employee

would get “outsourced” to a large group of peopl e by harnessing theinternet to bring them together. But this definition and tasks changebased on the criterion for selection of the crowd. Off late, in someprojects it has been generalized and can also mean that the burden of alarge endeavor doesn't fall to just one person, but is distributed among

many people.

What is Crowdsourcing?

Crowdsourcing is a distributed problem-solving and production model . Inthe classic use of the term, problems are broadcast to an unknowngroup of solvers in the form of an open call for solutions. The crowd alsosorts through the solutions, finding the best ones. These best solutionsare then owned by the entity that broadcast the problem in the firstplace—the crowdsourcer —and the winning individuals in the crowd are

sometimes rewarded. In some cases, this labor is well compensated,either monetarily, with prizes, or with recognition. In other cases, theonly rewards may be kudos or intellectual satisfaction. Crowdsourcingmay produce solutions from amateurs or volunteers working in theirspare time, or from experts or small businesses which were unknown tothe initiating organization.

There are multiple approaches to crowdsourcing. Some depend uponactive collaboration within virtual community of individuals, whileothers benefit from the opposite. For example, prediction marketsmaximize value not through collaboration, but from minimalinteraction between participants.

Jeff Howe describes the four primary types of crowdsourcing –

1. Crowd CreationCrowd creation implies that the creativity and labour of the crowd isemployed to solve the problems of the crowdsourcer. Perhaps, the best

Crowdsourcing =CROWD +

OUTSOURCING

Crowdsourcing is a way to tap the power

of masses. Ratherthan getting a task

done by youremployees or getting

it outsourced

Using labour of thecrowd to complete

the task




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known forms of crowdsourcing are “creation” activities such askingindividuals to film TV commercials, perform language translation orsolve challenging scientific problems.

For examples;

MTV Roadies and Bid Boss – Cast of the show is crowdsourced Android – Google backed operating system for smart phones iStockPhoto – Amateur photographers contribute high quality stock

photography images Innocentive – Connects research organizations with a global community

of scientists. Linux – Open source operating system developed by community of avid

programmers

It changes the perception of the industry in many ways and changes theindustry economics. For example; iStockPhoto helped in reducing thecost of portfolio of photographs in a significant way.

2. Crowd VotingCrowd Voting leverages the community’s judgment to organize, filterand stack-rank content such as newspaper articles, music and movies. Itis the most popular form of crowdsourcing, which generates the highestlevels of participation. Howe cites the 1:10:89 Rule, which states thatout of 100 people

1% will create something valuable 10% will vote and rate submissions (crowd creation) 89% will consume creation

For example ; Google’s search engine is built upon the principle of Crowd Voting. Reality TV shows offer another example of Crowd Voting.

3. Crowd WisdomThe “Wisdom of Crowds” principle attempts to harness many people’s

knowledge in order to solve problems or predict future outcomes orhelp direct corporate strategy.

For example ; P&G crowdsources 60% of its annual R&D fromlaboratories in universities and research centres throughout the world.

Letting crowd selectthe best option

based on the

Ideating throughcrowd




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4. Crowd FundingCrowd-Funding circumvents the traditional corporate establishment tooffer financing to individuals or groups that might otherwise be deniedcredit or opportunity. The crowd funding approach has long precedents

in the sphere of charity. But, various applications developed by entrepreneurs today use Crowdfunding to create capital for business. Applications of this kind evolve everyday depending upon the Area of implementation.

For example ; French entrepreneurs and producers GuillaumeColboc and Benjamin Pommeraud from company Guyom Corp. whenthey launched a public internet donation campaign in August 2004 tofund their film, Demain la Veille (Waiting for Yesterday).

Advantages of Crowdsourcing1.Cost effective way to complete the task –

iStockPhoto.com sold a photograph for 1$ . At that time, professionalphotographers charged close to 100$ per photograph (depending on thekind of snap required).

2. Provides more value for your money –

With large number of choices to choose from, even though the cost ishigh, we get lot many options. Example, LG crowdsurcing competitionhad users designing the future phone. Even if the winning design is notused to develop a model, the entries can be used for idea generation of hundreds of phones to come.

3. Hassle free –

No need to envisage tasks to be done. Get the finished forms and thenpay for the best option. No need to maintain those employees and noneed to track the whole process in development.

4. Great Marketing Tool –

As of now more than the benefits out of the design that LGcrowdsourced, LG drew more attention through the news that went viralabout LG crowd sourcing. I don’t see great phone models coming but Ido see good links going back to the news on Google.

5. Talent comes searching for you –

Raising capital fromthe crowd for a

purpose




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Case study competitions organized by companies in association with various B-schools is a classic example. The top prize usually is a pre-placement offer along with cash incentives.

6. Stop that futile R&D –

This is an application which has multiple benefits. The success rateincreases immensely, new product development programme is focusedon customer requirements and it saves a lot of shareholders money.Example; Procter and Gamble crowdsources 60% of its annual R&Dcatalogue from various universities and research centres across theglobe.

7. Good tool for head hunting or outsourcing –

That’s where I see a long term benefit of crowdsourcing. Incase yours isa web design company and you frequently crowdsource your job tocouple of people who are the same all times, you know this relationshipcan be converted into a contractual outsourcing. Furthermore, this canbe even utilized in case if you are looking for polished professionals torecruit.

Disadvantages of Crowdsourcing1.Crowdsourcing the wrong thing –

Seeking solution from the crowd requires the idea to be made public.This may result in competitors using the same idea to their advantage.

2. Authenticity and source of content –

A major issue that of copy rights.

For example; If Nokia claims that the artwork that LG has used by crowsourcing is a Nokia copyright, then what? It’s true that LG need notpay the royalties but would have to at least withdraw that phone off themarket. What if while the crowdsourcee participates in the contest he

also provides the same design to Nokia and before LG comes up, Nokiathrows a similar piece in the market.

3. Wrong Marketing –

At times Crowdsourcing can result in wrong marketing by passing thebad word of mouth publicity.




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Example; an automobile company tries to crowdsource its next modeldesign. In case if the end product is proved not good from the comfortaspect and not good in aesthetics, who is to be blamed? People willsimply say that the company does not take quality seriously and rathertries to crowdsource to get the work done in pennies.

4. Can become costlier –

Example, launching competition to write an article for college magazinesees 50 entries on 5 different topics. The purpose of the competition wasto get quality entries and save time of the editing team. But the teamends up spending more time on reviewing 50 entries and the quality may not be good (opportunity cost).

Where to use crowdsourcing? Crowdsourcing is the new kid on the block. It has vast applications fromMarketing, Research and Development to Finance. The applications vary to suit the requirement of the crowdsourcer. Crowdsourcing is analternative technology acquisition model whose costs can be closely managed.

In Marketing, Crowdsourcing can be applied to all the 5Ps of Marketing.“People ”, the latest P is the driving force behind crowdsourcing.

In Finance, Crowdsourcing can be used to raise capital, find the best fit

capital structure and design innovative products for ever changing world.

In R&D, the challenges for application of Crowdsourcing to productdevelopment are unique. But the results far outweigh the limitations.FMCG major P&G is the biggest example.

In Operations, crowdsourcing facilitates the sharing of best practices. Italso assist in identifying the future partners in development andproduction.

Some of the biggest companies of the world have successfully employedcrowdsourcing to their advantage and reaped in the desired results.

Facebook used crowdsourcing to develop interface andapplications for different countries.

L'Oreal used viewercreated advertising messages of Current TV to pool new and fresh advertising ideas

Can be usedanywhere and

everywhere

1. Marketing

2. Finance

3. R&D

4. Operations




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RequirementsFor any crowdsourcing project to be successful, it requires thecrowdsourcer to prevent the occurrence of a phenomenon called Madness of the Crowd. This refers to the difficulties that the

crowdsourcer faces in employing the strengths of the crowd to theadvantage.

One of the main reasons for the occurrence of this madness is that theproblem statement is not clearly defined, in other words, the needs arenot clearly defined. The only option to define a need for crowdsourcingis to first identify the problem statement which has resulted in thecreation of that need.

I would request all of you to identify some of the problem statements in your respective departments and assist me in designing a campaign forMHRIL to effectively tap in the vast pool of customers and crowd totackle those problems.

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Crowdsourcing for MHRIL