In this data-driven era, businesses across multiple industries increasingly grapple with large amounts of data, known as big data. Managing such data can be intricate and resource-intensive, raising the value of data management. Data management involves the storage, organization, retrieval, and preservation of data vital for efficient business operations, decision-making and strategic planning. However, with an overwhelming volume of data comes the challenge for businesses to manage it effectively, giving rise to the concept of data management outsourcing.
Data Management Outsourcing: A Game Changer
Data Management Outsourcing refers to assigning the task of storing, organizing, and maintaining a company’s data to third-party service providers. A classic example is e-commerce businesses that handle vast customer data, inventory data, or transaction data, which can be resource-heavy. Outsourcing data management to professionals ensures data is handled correctly, enabling businesses to focus on their core competencies.
With any business decision, there may be concerns and obstacles. One primary concern with outsourcing data management is security—how secure is your data when managed by a third-party service provider? Significant service providers address this concern by having strict security protocols in place and compliance with global data protection regulations.
The Power of Outsourcing: Facts and Figures
Supporting the trend towards outsourcing, Statista research reveals that the global outsourcing market amounted to 92.5 billion U.S. dollars in 2019. Moreover, a Deloitte survey points out that 59% of businesses surveyed outsourced to cut costs, while 57% did it to focus on their core business. Indeed, the numbers speak volumes about businesses’ trust in outsourcing services.
Industry expert, J. Bradford DeLong, Professor of Economics at UC Berkeley, supports this trend, stating, “The trick is to outsource that which can be done better and more cheaply by others, and to focus on those things you do best.”
Benefits of Data Management Outsourcing
Cost-effective: Outsourcing eliminates the need for businesses to invest in infrastructure, staff, software, and other resources for data management, proving more cost-effective in long term.
Improved data security: Professional data management companies are equipped with advanced data security technologies and expertise, ensuring better protection against data breaches.
Access to skilled resources: Data Management requires specialized skills. Outsourcing provides access to experts, ensuring top-notch data management.
Enables focus on core competencies: Once outsourced, businesses can devote their full attention to their core tasks, enhancing productivity.
Increased Operational Efficiency: A professional data management company enables businesses to streamline workflows and improve operational efficiency.
Enhanced decision-making: Data management companies implement suitable data analytics, which can provide insightful trends and patterns. This aids data-driven decision-making.
Conclusion: To Outsource or Not
While challenges exist, the evident advantages of data management outsourcing cannot be overlooked. It offers methods to address the escalating complexity of data management and provides practices that help businesses to manage data more efficiently without compromising security.
As Harvard Business School professor, Raffaella Sadun, concludes, “Outsourcing, coupled with an understanding of its strategic implications, can be beneficial to companies, but it requires a more rigorous definition of core capabilities and strategic strength.”
In the end, the decision to outsource is contingent upon your business’s unique needs and strategy. But given the increasingly data-intensive landscapes of all industries, outsourcing stands as a robust solution to manage, evolve and grow efficiently in this data-driven era.