When is Crowdsourcing Advantageous? The Case of Crowdsourced Software Testing

Crowdsourcing describes a novel mode of value creation in which organizations broadcast tasks that have been previously performed in-house to a large magnitude of Internet users that perform these tasks. Although the concept has gained maturity and has proven to be an alternative way of problemsolving, an organizational cost-benefit perspective has largely been neglected by existing research. More specifically, it remains unclear when crowdsourcing is advantageous in comparison to alternative governance structures such as in-house production. Drawing on crowdsourcing literature and transaction action cost theory, we present two case studies from the domain of crowdsourced software testing. We systematically analyze two organizations that applied crowdtesting to test a mobile application. As both organizations tested the application via crowdtesting and their traditional in-house testing, we are able to relate the effectiveness of crowdtesting and the associated costs to the effectiveness and costs of in-house testing. We find that crowdtesting is comparable in terms of testing quality and costs, but provides large advantages in terms of speed, heterogeneity of testers and user feedback as added value. We contribute to the crowdsourcing literature by providing first empirical evidence about the instances in which crowdsourcing is an advantageous way of problem solving.