Procurement is undergoing a significant transformation. Organizations are moving away from traditional supplier relationships and closed innovation models towards more open, competitive approaches to sourcing solutions. This shift is being driven by crowdsourcing contests and other next-generation procurement strategies that leverage competition to engage new talent and deliver better results faster.
In this post, we’ll explore why forward-thinking organizations are embracing competitive procurement platform help, examine key benefits, provide real-world examples, and offer advice for running successful contests. Let’s dive in!
An increasing number of organizations are shifting towards open innovation (OI) models. In a study by the Economist, 90% of companies surveyed are either already implementing key pillars of OI or have plans to do so within three years.
What’s driving this trend? Many leaders recognize that despite large investments, relying solely on internal R&D and a closed group of preferred suppliers has significant limitations, including:
• The smartest experts don’t work for you
• Internal innovation is costly and limited in scope
• Solving complex problems requires new perspectives
• Closed models move too slowly in a rapidly evolving world
Open innovation provides access to Outside talent and new ideas without excessive risk or upfront costs. Organizations essentially “crowdsource” solutions by sponsoring contests, challenges, or other competitive events to engage a global community of problem solvers. They get to set the rules, incentivize participation, and only pay for actual results.
Let’s explore some of the top benefits driving more organizations to embrace competitive procurement strategies:
Casting a wider net through crowdsourcing contests gives you access to new talent outside your existing networks. By incentivizing participation, you motivate experts around the world to apply out-of-the-box thinking to your most pressing problems. This influx of new perspectives increases the likelihood of landing innovative solutions.
A well-optimized competition design also provides a global platform to promote your brand’s vision and values to new audiences. Participants engage deeply with your organization to understand your needs and propose solutions accordingly. This builds meaningful connections beyond a transactional request for proposal process.
Unlike traditional procurement, competitive models allow you to define success criteria upfront and only pay for actual deliverables that meet your requirements. Rather than funding internal R&D or paying suppliers regardless of outcomes, you incentivize performance and invest purposefully in solutions that drive impact.
By crowdsourcing innovation, organizations leverage external talent and ideas to accelerate outcomes that would take longer to achieve internally. Handing competition design and execution to specialized teams like Carrot frees up internal resources. Efficient assessment protocols also streamline the evaluation process to arrive at the best solutions faster.
Well-designed programs attract more diverse applicants and higher-quality submissions, leading to better outcomes. Here are some best practices to bake into your crowdsourcing competitions strategy:
• Offer compelling incentives
• Break down problem areas into specific solution formats
• Keep the application simple and intuitive
• Share clear judging criteria upfront
• Actively recruit relevant communities
• Make the process transparent and participant-centric
Of course, running a smooth end-to-end contest at scale requires specialized expertise. The next section highlights the value of partnering with an experienced procurement provider.
While the benefits of competitive procurement are clear, executing a crowdsourcing initiative end-to-end requires significant coordination. Without proper support, the risks around engagement, operations, and legal protections can undermine results.
That’s where the Carrot procurement platform adds value. Our dedicated team helps organizations design, develop, and manage custom competitions to meet their specific goals, backed by tailored software tools and deep operational experience.
Here are some of the key advantages of running your competitive procurement initiatives through Carrot:
From planning to participant relations and legal considerations, our team handles all aspects of orchestrating a successful contest at scale. We help streamline internal coordination and decision-making.
We provide an enterprise-grade platform tailored to each client’s parameters for registration, submissions, evaluation, judging, and more. The software centralizes and organizes applicant data while protecting privacy and IP.
Through extensive marketing and existing communities, we engage the most qualified applicant pools to drive participation. Our platform is globally accessible to subject matter experts around the world.
We ensure all competitive procurement initiatives meet jurisdictional legal and regulatory policies. Robust cybersecurity protections keep applicant data safe while optimizing transparency.
Custom reporting provides real-time data to inform decision-making during each phase of the competition. We help interpret performance benchmarks to improve outcomes.
The Carrot platform has helped leading organizations like Johnson & Johnson, NASA, and National Geographic launch successful crowdsourcing competitions that tap external talent to solve real business challenges better and faster. Let’s explore two real-world prizes and challenges examples:
100&Change is a MacArthur Foundation competition that awarded a landmark $100 million grant to help solve a critical societal problem. At the time, it was the largest single philanthropic prize ever offered.
Over 7,000 teams registered from across the globe, resulting in 1,904 total submissions. In addition to the $100 million grand prize, the competition unlocked $432 million in related funding commitments.
The huge applicant pool and total funds demonstrated the power of a well-designed crowdsourcing contest to drive impact.
Hosted by National Geographic, the Marine Protection Prize offered $450,000 in prizes to develop tech solutions for detecting illegal fishing in coastal regions.
The contest attracted 156 registrants from around the world, including some of the top minds in conservation science and marine technology. From these, 34 total submissions were received within just 3 months.
The competition produced meaningful solutions quickly by incentivizing outside-the-box thinking from a targeted expert community. Also, requiring local partnerships ensured relevance and real-world viability.
Here are the big lessons on how crowdsourcing contests can transform procurement:
• Sourcing innovation externally delivers results faster and more cost-effectively than old models
• Well-designed crowdsourcing competitions activate your brand while attracting top talent
• Tailored software and services enable the execution of complex contests at scale
• Specialized partners like Carrot handle end-to-end operations, freeing up internal capacity
• Real-world examples prove the value; more enterprises are embracing open procurement
Ready to explore how crowdsourcing contests can meet your innovation goals? Reach out to the expert team at Carrot for a free consultation.
