Keeping a close eye on the books and looking to the future are key in business. As technology advances, the way businesses draw up budgets and forecasts is evolving. One of the most recent developments is the use of crowdsourcing, a technique, which involves gathering information from a large group of people, usually online. The infographic below showcases the potential benefits of crowdsourcing for companies and accountancy firms, providing an overview of a research study conducted by the University of Alabama at Birmingham.
Crowdsourcing is a relatively new form of forecasting, which utilizes a pool of people, rather than traditional methods. Popular examples include Wikipedia and Waze. For the study described in this infographic, researchers analyzed the performance of Estimize, an open platform that was launched in 2011 by Leigh Drogen, a former hedge fund analyst.
The primary aims of crowdsourcing are to provide businesses with accurate forecasts, to open up the floor for ideas and opinions and to offer an insight into predicted returns on investments. The data obtained by crowdsourcing platforms can influence stock prices, investment strategies and the way data is analyzed, providing an alternative to Wall Street ecosystems.
Analysis and evaluation of Estimize found that there are benefits of using crowdsourcing for generating forecasts and estimating the returns expected within the market. The most accurate results were obtained by the largest groups of participants and by using a combination of techniques, including Estimize and IBES forecasts.
For businesses and accounting firms, using crowdsourcing can provide accurate forecasts and unveil new ideas.
Infographic Designed By UAB’s online bachelors in accounting program