Advantages and Disadvantages of Outsourcing Your Data Entry

Businesses are constantly striving to outshine competitors in the race for more customers and revenues. Their efforts result in generation of data all the time. With the help of technology, businesses then make efforts to draw meaning from this data in pursuit of their business goals.

Some of the data generated is in a format or media that can be directly accessed by technologies used by the business. Visitors at an industry event might be requested to key in their contact information on a simple interface at the booth. A job applicant may be requested to apply directly on the Applicant Tracking System (ATS) of the recruiting company.  

In many cases data is not in a compatible format or not on a media that can interface with the technology. This creates the need for data entry so that the data that is generated becomes usable. If the visitor to your booth at the event drops a name card, it would need to be manually added to the database your business maintains of client leads. If the job applicant emails her Resume to you, it would need to be taken apart and keyed into the ATS or any other system used by the company to manage jobs and applications.

Data entry, thus, is a critical function that powers the digitization of information so that it becomes a part of the digital world and can be sliced and diced as per needs of the owning business.

Data entry is not for a finite list of activities. You may need to do data entry for Guest comment cards, Survey results, Ecommerce product description, Insurance claim, School admission application, Conference transcription, Invoices, Restaurant menu, Job application, Client name card…it can go on.

And for any business or industry.

The requirements and rhythm of data entry often being different from the business for which it needs to be done, outsourcing of data entry is the accepted norm, to BPO companies specializing in the task.

What are the advantages and disadvantages of outsourcing your data entry?

Advantages and Disadvantages of Outsourcing – Advantages

Permits focus on core business

An evaluation of the pros and cons of outsourcing needs to recognize that hundreds and thousands and millions of people and organizations are engaged in a wide variety of endeavours to make a difference in the world and enable them to lead a respectable and comfortable life. They could be making watches, stitching clothes, publishing books, growing food, or many other things. They build expertise in the area of work that enables them to stand out. While there are many other functions that may be required for running an organization that will contribute to the business, some of them take time and often require their own expertise, like accounting. There is an opportunity cost to every minute that an expert spends away from the core business, hence, where feasible, businesses look to outsource such activities so that they stay true to their business and expertise.

Data entry is one such task that, if outsourced, enables the business and its employees to stay focused on their core activities and ensure they are done successfully. By doing data entry, the experts would be doing a task they are not very good at, and ignoring the work that they are good at. So, it is a double whammy. By outsourcing, they create conditions for that work to be done in a more efficient manner, while ensuring their own business does not suffer.

oWorkers has been rated as one of the three top data entry providers in the world and has executed work for over a hundred clients in the short period of eight years of their existence.

Enables cost savings

Data entry often being a rules-based activity, does not require advanced educational degrees or experience to perform needs to be understood while analyzing pros and cons of outsourcing. As a direct result, operators for doing data-entry work can be hired at a reasonable cost which is often lower than the business specialists and professionals that the company employs for doing its core work. These higher paid staff are not equipped to do the work any better than the comparatively lower cost resources. In fact, they may be worse off doing data entry as they do not have any training or experience in it. And no interest too. Hence, by outsourcing, the same work can be completed at a lower cost, even if we ignore the savings in terms of time.

oWorkers operates from some of the most highly rated locations for outsourcing in the world. Our clients report savings of up to 80% when they outsource to us. Our operational efficiencies enable us to save costs which we are able to share with our clients.

Creates operational efficiency

We have seen that people who specialize in a task or activity will make efforts to develop expertise in it which leads to efficiency, and that is a factor in understanding the advantages and disadvantages of outsourcing. Though data entry, it is believed, does not have any specific requirements of knowledge or skills to execute well, aptitude and attitude perhaps being the more important requirements, operators engaged in it, as they gain experience, also develop expertise. Employment for data entry roles typically being from sections without advanced educational degrees, realizing that their employment options are limited, also make an effort to develop expertise to advance their prospects. This impacts the outsourced operation beneficially by making it more efficient; more can be done in a shorter period of time, with greater quality.

Data entry being a part of its chosen area of specialization, oWorkers delivers over 99%  accuracy in data entry on client projects across a wide cross-section of measurement systems. With our expertise, in many cases, clients have chosen to initiate and implement a new data-entry process directly with us, instead of first implementing inhouse and then transitioning out.

Releases benefits of scale

Outsourcing pros and cons recognize that doing the same, or similar, work for a number of clients provides vendors the benefits of scale that can be shared with clients. Being known as the provider of a certain type of work can act as a ‘lead magnet’ with prospective clients viewing the vendor as an expert or leader in the space and approaching it for giving more business.

Scale tends to lower the cost of processing at a unit level. This is because the Fixed Costs of the organization are now spread over a larger number of transactions, lowering the share borne by each.

The existence of scale creates opportunities for investment in technology. Ten clients each with limited quantities of data entry work may not be able to justify investment in technology that a provider doing outsourced work for all ten of them, with the aggregated volume, can. This creates further efficiencies in the process, with all stakeholders benefiting.

oWorkers, with its transparent pricing model, is able to share the benefits of scale with its clients. It also leverages developments in technology through its partnerships with a number of technology providers, with the benefit shared with clients by deploying relevant technologies for their work.

Gives access to resources globally

Evaluation of the pros and cons of outsourcing cannot be completed without a discussion on resourcing.

It is said that water flows from high ground to low ground. This is what outsourcing of data entry does in business.

The typical direction of data entry outsourcing is from a relatively more prosperous society to a relatively less prosperous one. The relatively less prosperous society is at that stage in development as it has lesser opportunities and greater unemployment. For data entry work, there is far greater availability of a willing and able workforce than would be the case at the point of origination of that work.

Not only does a larger workforce become available, it releases the business from the shackles of the local labor market forever. Once outsourcing is decided upon, any labor market anywhere in the world could be leveraged, of course while keeping many other factors in mind, for this work.

As a side benefit, which is more of political relevance than business, data entry outsourcing creates employment opportunities in many places, which is why often governments provide incentives and support for setting up centers for such work.

As a locally registered company in all its locations, oWorkers is an active, contributing member of local communities. It is a preferred employer for the workforce in its catchment areas, and regularly receives unsolicited applications that reduces its hiring costs as well as attrition numbers. It also enables oWorkers to hire short-term resources to manage peaks, to the tune of almost 100 resources in 48 hours.

Advantages and Disadvantages of Outsourcing – Disadvantages

Processor boredom and burnout could impact quality

An effort that often leads to outsourcing is the breaking down of work into small, defined processes that can be trained easily as well as measured and monitored, and this is a key element in any review of the advantages and disadvantages of outsourcing. While great for the business, it is not so great for the people doing the work. Whether academically qualified or not, all humans are intelligent, thinking creatures. They crave variety and challenge and new experiences. Doing the same limited process repetitively without any scope for thinking or creativity can lead to burnout for the operators involved. This can result in switching off from work, boredom, looking for other opportunities, all resulting in the quality of work suffering.

This is one of the reasons management of people in a BPO is seen as such a critical role. The employing organisation needs to constantly monitor the output as well as the state of mind of their staff so that the work does not suffer and they are able to support their staff with their issues before it is too late.

The performance of each individual is monitored by oWorkers. Our independent Internal Quality team monitors performance at a transaction level and supports agents through coaching and feedback sessions where required. Our location in the Eurozone makes it a requirement for us to have fair and transparent employment practices. We work with employees, not freelancers, and actively support their career progression, including job rotation.

Risk to Intellectual Property could impact business

Interpretation of rules can be different between the client location and the outsourcer location and administration, and should be accounted for in an evaluation of outsourcing pros and cons. Focus can also be different, with a lower emphasis being placed on intellectual property (IP) by locations lower on the developmental index, where some of the outsourcers are located, as a result of cost and labor pool advantages.

A threat for the intellectual property owned by the client that is shared with the vendor engaged, is a real risk under the circumstances. IP being violated or versions of processes and products being available soon after, are not unheard of.

In addition to GDPR compliance, oWorkers is also ISO (27001:2013 & 9001:2015) certified and operates with facilities & protocols that are secure. We also ask that each member of our staff sign a non-disclosure agreement (NDA) before access to client data is provided.

Labor malpractices could tarnish the brand

An assessment of outsourcing pros and cons cannot be complete without understanding that there are many contributors to outsourcers being able to provide low-cost solutions. One of them is labor practices, or rather, the lack of them. In an environment where job opportunities are fewer and monitoring lax, it is easy to get carried away and try to squeeze the maximum out of the money being spent on resources. Such malpractices, like child labor, could get associated with the client’s brand and cause much greater harm than the money being saved or efficiency created. Justifying it by saying that it is the vendor’s issue might not be of much help in such a situation.

oWorkers is committed to the career progression of its staff, having adopted the model of working with employed resources as opposed to freelancers. It offers a fair and transparent work environment drawn from best practices around the world. Our staff are also free to choose to work from home as long as the shadow of the Covid-19 pandemic looms. Our physical presence in the Eurozone ensures the highest standards of people practices.

Cultural differences could impact on accuracy

“A rose by any other name would smell as sweet” argued Juliet in William Shakespeare’s play Romeo and Juliet. Of course, she may not have needed to analyse the pros and cons of outsourcing.

In business, however, the issue could be more complex. If an operator working for a vendor in India and doing data entry for a men’s clothing e-commerce store, were to label an upper garment as ‘kurta’ as per his knowledge of a corresponding local wear, instead of the ‘shirt’ it is known as in the client’s parlance, potential customers looking for a ‘shirt’ will never be able to find it.

Culture and practice keeps changing as we move from one place to another. The greater the distance, the greater the variance. For delivery centers located far from the originating center, cultural issues could cause errors to creep into the output. Language might be different.

oWorkers, with a center in Europe, which is within three hours of flying tome away from any major city in Europe, is culturally aligned to support customer business for Western European clients. In addition, our chosen areas of specialization that focus on data related work, mostly involve interaction with client staffers and not customers.

Hidden costs might impact viability

While the business case looks promising, any analysis of the advantages and disadvantages of outsourcing needs to know that there are hidden costs that could tilt the balance. Grid-supplied power supply may be erratic requiring investment in private generating capacity. Travel costs could increase as there will be a likelihood of outsourcer staff needing to travel to the delivery destination to ensure processes are followed and issues resolved. Local events like political unrest and demonstrations could jeopardize business continuity resulting in down time.

oWorkers provides transparent pricing to clients including a choice between rate per unit of output and rate per unit of capacity. Once a price is agreed, all additional costs are borne by oWorkers. We make arrangements to augment resources like power supply in centers where grid supply could be erratic. All costs are factored in when we quote a price so that there are no surprises for clients.

Advantages and Disadvantages of Outsourcing – In Conclusion

While there are clear benefits that data entry outsourcing delivers to a business, it comes with its own set of limitations which should not be disregarded in an assessment of outsourcing pros and cons, and need to be managed. Successfully managing the downsides while taking advantage of the benefits results in creating value for the business.