Sarah Harris, like most marketing managers at small companies, relies on freelancers to help with design projects. Frustrated by her "so-so" experience with freelancers, she turned to a site called crowdSPRING in 2008. There, she ran a logo design contest for her employer, Los Angeles-based jeweler Adiamor — and was introduced to crowdsourcing.

Crowdsourcing is a service in which companies tap into large remote labor pools to complete business tasks — often through sites like crowdSPRING. It can be an effective way to outsource work for higher quality, faster results and lower costs. For small companies, it eliminates the grunt work of finding the best-suited experts for projects.

"I was a little worried about the quality, but we got the cream of the crop," says Harris. "With crowdsourcing, there are tons of applicants vying for your business." In August 2010, she again turned to crowdSPRING to handle a Web redesign project for her father's company, Norman’s Rare Guitars, in Tarzana, California.

Harris chose crowdsourcing to avoid the costly prospect of hiring a designer that wasn't a good fit. The logo design project was awarded to a man in Spain for $500 and the Web design project went to a woman in Puerto Vallarta for $700 — veritable bargains for creative work.

Harris also enjoyed the process: "What's amazing about both contests is that the designers are so cool about feedback. I had a lot of revisions for the designers and they were all receptive and completed everything so quickly. "

The possibilities and perks of crowdsourcing
Contests for creative work are just one form of crowdsourcing. One of the earliest examples is Wikipedia, an online encyclopedia founded in 2001 that relies on volunteers to develop content. Other unconventional examples include initiatives for labeling galaxies or developing online games that further scientific research, according to Lukas Biewald, founder and CEO of CrowdFlower, a San Francisco-based crowdsourcing site that has seen business grow tenfold over the last year.

CrowdFlower specializes in small repetitive business tasks like address verification, social media moderation, and e-commerce product research. “These tasks are a good fit for crowdsourcing because they’re small with high variability, which makes it hard to predict staff needs," Biewald explains.

It's also much easier to scale a workload up or down with crowdsourcing, versus working with a freelancer or outsourcing company that may require minimum monthly fees. A crowdsourcing site may get 10 to 15 people working on a campaign, which is much more powerful than a single freelancer, remarks Niel Robertson, CEO of Boulder, Colorado-based Trada, which specializes in crowdsourcing for paid search-advertising experts.

How it works
There are a few different models for how these crowdsourcing sites make money and pay workers. At Trada, the ad experts get paid based on the difference between what they bid for an ad project and the price set by the advertiser. So if the advertiser agrees to pay $1.50 per click and an expert is able to set a price for $1, he or she keeps the difference — minus Trada’s 25 percent cut. "It's a system designed to percolate people to the top based on performance,” Robertson says.

Software testing site uTest charges its clients per test cycle, which varies depending on the project, according to Matt Johnston, vice president of marketing for the Boston-based company. Using uTest is often 30 to 40 percent less expensive than hiring testers or outsourcing to an offshore provider, says Johnston. The testers are also paid handsomely for their work: "Our top testers are earning more than $5,000 a month, part time," Johnston adds.

The benefit for small businesses is a fixed cost that won’t change dramatically over the course of a project. Here are some tips to keep in mind if you’re thinking of implementing crowdsourcing for your business:

1. Think tactical. Crowdsourcing is ideal for tasks that others can accomplish without expertise in your industry, according to Johnston. Robertson advises that it's best to offload specific tasks — such as a particular area of legal research, versus the legal department’s entire workload.

2. Provide specific project and business details. The more information you give a crowdsourcing company about your project, the better results you’ll get. For example, Harris spent hours providing feedback to the designers, guiding their revisions in the right direction.

3. Interact with workers. While some sites have anonymous contributors, others provide the ability to directly connect with the people working on your project. Trada’s experts often share valuable ideas and information with clients, according to Robertson.

4. Don't focus on cost savings alone. Crowdsourcing is an efficient way to gain the expertise of many qualified individuals at once, which should lead to high-quality outcomes for your business. But be sure to thoroughly research a potential crowdsourcing partner and its members’ level of experience.

CrowdFlower’s Biewald believes the growing popularity of crowdsourcing signals a shift in the way work gets done. For converts like Harris, there's no turning back: “There’s no other way I would go now for a project."

Polly S.Traylor is a former high-tech magazine journalist with CIO and The Industry Standard, among others. She writes about business, health care and technology from Golden, Colorado.