Benefits of Crowdsourcing for Company Development

A good business model includes innovations about technology. Decisions should have the consequences of enabling the company to achieve its goals. This may seem obvious, but practice has proved that this is not a matter of course. For example, the Xerox PARC Research Center has developed technological innovations such as laser printing, Ethernet and graphical user interfaces. However, due to the lack of attention to parent company goals, Xerox PARC was unable to translate these innovations into Xerox's new business model. Therefore, the use of crowd creative to break the limitations of thinking due to the number of people, to find a more innovative way to develop the company. It is a good decision for company to find creative ideas and help company development.

Crowdsourcing is an emerging service platform and business model on the Internet. The founder and president Alph Bingham said that: Companies can attract hundreds or even thousands of ideas through the Internet platform to solve problems in organic synthesis and explore solutions more effectively. A broad area of the solution space can be used by people outside the team or organization to obtain a variety of key new ideas that are effective in solving problems, and presenting the right questions in the right way is critical to getting the answers you need. These continue to be the core pillars of InnoCentive.

Due to the limitations of the company's internal staff, the ideas which come up by internal staff are not necessarily suitable for company development, which highlights the importance of crowd creation to the company. It can take advantage of outsiders, come up with ideas that are more suitable for company development. Selected case PharmaFX is a European pharmaceutical company that has been in business for more than a century. PharmaFX focuses on open innovation as a means of “exploring new opportunities and ways of working with external research partners”. These include setting up and executing on an open innovation platform, as well as managing crowdsourcing projects with the goal of promoting organizational innovation. 

After company has developed innovative ideas using the method of crowd creation, they need to find a good platform to cooperate to help them find partners. The collaboration platform of PharmaFX is Innocentive. For PharmaFX, the challenge can be to generate ideas, get new ideas, or solve complex technical or scientific problems. InnoCentive will help PharmaFX provide experts tailored to specific challenges and help PharmaFX develop and clarify challenges and specific criteria for solution suitability. InnoCentive experts will provide services to “solvers” during online launches throughout the challenge period, and these external crowd members have questions or requests for challenges. When the challenge is reached, the experts rank the submissions they receive to help the company determine the solution that best meets the specific criteria and requirements. After finding the winner, InnoCentive will verify the identity of the solver, obtain the solver agreement contract and transfer the decision to the solver, and finally deal with the intellectual property transfer. 

However, while using the business model of crowd creation, it also generates a lot of costs. There are two types of costs when PharmaFX faces the challenge of creativity. One is the cost associated with the middleman. PharmaFX works with InnoCentive as a middleman in its crowdsourcing challenge. InnoCentive has two types of costs as intermediaries: the cost of services offered by InnoCentive and the online platform to access them and the bonuses for submitting rewards. Another type of cost is the cost of evaluating the submitted proposal and selecting the winner.

Before the company decided to apply the crowdsourcing model of crowd creation, the company had to overcome a variety of challenges, such as excessive costs. However, Bauer and Gegenhuber describe how crowdsourcing affects consumers and producers. They claim that crowdsourcing shortens the distance between consumers and producers by allowing consumers to leverage their time, energy and knowledge. Engage consumers in the company's production creation process, while providing ideas for the company to help the company development, it can also help companies advertise to make consumers more aware of the company's structure and products and attract consumers’ attention. This can be a motivation for companies to use crowd creation as their new business model. Once the company has a motive, it is time to start looking for a platform to collaborate and help the company find a solution that can present ideas. The data in Appendix 1 demonstrates the benefits of working with the platform, which uses the Qualitative Data Analysis Software (QDAS) to enforce data encoding strategies to eliminate effectiveness threats and to effectively classify the collected data to help the company screen out reasonable and effective recommendations. At the same time, grade the collected data, while also helping companies reduce the costs associated with data screening. However, when evaluating the ideas collected, there will also be a corresponding fee. The company's open innovation team needs a certain amount of time to evaluate all submitted solutions and present them to senior management. Several rounds of evaluations were conducted as project members needed further investigation to discover the value of some of the ideas that were considered suspicious at an early stage. So it takes a long time. Another reason is that the evaluation of submitted ideas is based on a collection of different criteria. This leads to some ideas being rewarded, even though this idea may not be implemented in PharmaFX. 

In conclusion, some people think that the high cost due to rewards and evaluation costs is not conducive to the company's use of crowd creation methods to collect innovative ideas. Some people consider that using crowd creation cannot only change the company's business model, break the limitations of thinking, but also use the network platform to find good ideas that are more suitable for the company's development. Rewards and assessments will affect the company's profits and cash flow to a certain extent, but working with the InnoCentive platform can reduce the funding for assessments. At the same time, finding good platform cooperation is beneficial to the company to make a decision to collect ideas by crowd creation and can help company save product costs. Therefore, this essay confirms the aim of this essay through the three themes of cost, motivation and platform cooperation that crowd creation have beneficial to the development of company.