What is Social Forecasting?
Social Forecasting is a new Crowdsourcing approach with employees. Some of the companies who use Social Forecasting include Google, Microsoft, General Electric, Thomson Financial and Best Buy. For a longer list of examples read our white paper The Rise of Social Forecasting .
| Crowdsourcing | Social Forecasting | |
|---|---|---|
| Areas of Application | Ideation, Crowdfunding, Designs and other creative tasks as well as simple micro tasks | Forecasts, e.g. sales forecasts, strategic outlook, economic indicators, as well as quantitative assessment of new product ideas (sales potential) coming from ideation process |
| Participants | Public | Employees from various departments |
| Information used by participants | Non-confidential information | Internal confidential information |
| Motivation of participants | Prizes, recognition | Prizes, recognition |
| Cost | Low | Low |
| Examples | 99designs, Amazon Mechanical Turk, Clickworker | CrowdWorx, Inklingmarkets, Lumenologic |
How does Social Forecasting work?
Social Forecasting relies on the collective wisdom of the participants. Aggregating this distributed knowledge allows you to forecast a possible outcome – and the earlier, the easier it is to take certain actions to manage the oncoming situation.
A participant makes a prediction and assigns a certain amount of virtual money to his prediction – this means, that the more self-confident one is about his prediction, the higher the stake he puts in. This causes the prediction to have a greater impact in comparison to participants, who have put less money on their predictions.
The system then aggregates the predictions, recalculates them accordingly and gives one collective crowd prediction. The results can be downloaded immediately and thoroughly analyzed.
How good is Social Forecasting?
Social Forecasting is often not only more accurate, which is the most important factor when it comes to predictions, but also needs less participants, is less time consuming, more efficient and not as costly, when compared with other prediction methods (e.g. polls, surveys, conjoint). This is well illustrated by the following graphs and tables:
Is Social Forecasting for me?
In business social forecasting can be used to predict new product potential, S & OP and demand planning – based on the knowledge and experience of employees.
- Timely insights on various business KPIs are the key factor in the S&OP process. Social Forecasting helps to achieve accurate estimates in sales and service, demand and supply chain management way in advance.
- Also, social forecasting allows you to get quantitative estimates of development costs and potential of your new products, which will also reduce the failure rate.
- Last but not least, social forecasting can help you with risk management – from calculating the probability of a competitor entering the market, through operational and financial risks management, to project success probability.
Find out if YOUR business is ready for a Social Forecasting. Take this short test
