Five Steps in Online Data Entry Outsourcing

This updated guide provides essential criteria and valuable tips for selecting an ideal outsourcing partner for data management tasks. Acquire the insights needed to make an informed decision regarding your data entry outsourcing needs.
Outsource Online Data Entry Service - concept with quality, experience and support

Written by Allie Delos Santos


If you’re considering data entry outsourcing services but are unsure how to select a dependable BPO company, this guide is for you.

It outlines essential factors for choosing the right data entry provider and offers insights on initiating the outsourcing process. Additionally, the guide covers methods for managing your external team and monitoring their performance.

What Is Online Data Entry?

Online data entry is the process of collecting pieces of information from internet sources and collating them in a format applicable for online accessibility and storage. The best data entry services provider will find relevant online information and sort it in an organized manner through web research, data extraction, data mining, typing, and encoding.

Encoders then convert the gathered data into digital format and compile them for use on various devices. Typically, data entry specialists create a database where data can be stored and accessed from any location. In certain cases, data entry specialists use various IT technologies to encode data for machine translation, which is the process of translating a text from one source language to another automatically. 

How Do You Outsource Online Data Entry?

why outsource data entry - Image showing office worker overwhelmed with paperwork asking for help with her hand.

Data entry tasks, regardless of format, consistently need accuracy and quick turnover. Data entry gets even more complicated when it involves multiple languages and time zones.

To help your business handle all your encoding activities, you can outsource data entry services to a reliable BPO company. Doing so offers you cost-effective and customizable online data entry solutions.

Enhancing turnaround time for your data entry activities should be a top priority because accurate final data is required for time-critical applications such as legal documents, insurance claims, product catalogs, and invoices. One more area where prompt encoding performance is crucial in customer service functions, including client feedback and shipping.

To meet the challenges we have mentioned and simplify your entire encoding process, you can outsource online data entry to a reputable BPO company. 

Addressing the challenges we mentioned above means working with an outsourced online data entry provider that can simplify your encoding process. Most BPO providers work on a 24/7 schedule, allowing them to accomplish data entry tasks on time. But just like any process change, you can be successful only if you outsource online data entry the right way. 

Here are five steps in effective online data entry outsourcing: 

1. Calculate Potential Cost Benefit

Before committing to any hiring decision, you must first get the math right. You need to know the exact costs when you outsource your online data entry in comparison with the benefit and value it can provide. For that, you need to calculate how much an in-house data entry department costs.

Once you have that number, you can use it as a guide through picking an outsourcing partner. The idea is to refrain from hiring a BPO company that will charge you more than you spend for an in-house data entry team.

2. Evaluate Your Needs

Before outsourcing your online data entry, be clear about your goals and requirements. It’s not uncommon for companies to have specific requirements and unique needs that go beyond traditional data entry, such as data extraction, data capture, data mining, and data conversion.

For instance, your company might need more advanced processing and data analysis. Depending on your operations, another requirement that you might have is 24/7 customer support. With this feature, you can use your provider’s help to rectify service requests whenever an issue arises.

Once you establish your goals and requirements, it’s easy to determine which type of technology and software you need to work on your data processes. This also puts you in a better position to look for a BPO provider that’s suitable for you.

3. Look for a Good Provider

Once you have your budget and requirements figured out, it’s time to start finding a good service provider to outsource your online data entry to. You need to consider a few things when choosing a data entry outsourcing service.

Turnaround Time

When you outsource your online data entry, you must assess the turnaround time of your provider if your company deals with a lot of data entry work. This is especially important if you are working in a time-sensitive industry.

Make sure that your data entry provider has the right resources such as the newest technology and skilled professionals to manage the workload.

Another requirement that you need to check with your BPO partner is a dedicated emergency service line. This solution is for on-demand data entry with a speedy turnaround time. If your company needs it, make sure to let your outsourcing partner know.


You are giving access to a critical part of your business operations when you outsource online data entry, so you should partner only with data specialists with along history of providing this service to renowned organizations in your industry. This is incredibly important, especially for industries that deal with insurance claims because of privacy matters and because your business can’t afford to make errors. So it’s crucial to do your due diligence before outsourcing data entry.

Research the BPO provider you plan to work with. Make sure that it is financially stable; you don’t want to work with a company that can’t afford necessary resources. Finally, check its reviews to get a picture of the quality of its service and how satisfied its clients are.

Security Protocols

Security and privacy are always essential when dealing with sensitive information about your company or your clients. It becomes even more critical when you outsource your online data entry and share private information with your service provider.

When selecting an external data entry provider, you need to assess its security protocols. Generally, the BPO company’s security protocols need to meet industry standards.

For instance, if you’re working in the medical industry, you risk facing severe legal sanctions if your data pipelines are not HIPAA-compliant. Likewise, those who work in the financial sector risk running into lawsuits if they do not handle their client information securely.

To sum it up, when you outsource your online data entry, regardless of your industry, you need to make sure your BPO provider applies the latest data security protocols when managing your information.

4. Create a Transition Plan

It can be a hefty change management project when you outsource your online data entry services. Things can quickly go south if you and your BPO partner fail to manage the transition properly. You risk running into problems such as:

  • Service disruption for your customers
  • System disruption for your employees
  • Data corruption
  • Data loss
  • Security breaches

The good thing is that you can avoid these problems if you outsource to an experienced BPO company. They already know the possible pitfalls and can use their knowledge to help you pass them safely. 

But despite having a reliable service provider, you still need to perform some transition management on your side, which can include:

  • Assigning an employee to manage the turnover
  • Conducting a complete assessment of how the handover will affect your departments
  • Making sure communications are always open among all project stakeholders
  • Consulting your external data entry team about your concerns 

5. Track Performance

Tracking the performance of the external data entry team enables you to keep tabs on their progress and see if processes are aligned with the project goals. Evaluating their performance allows you to immediately address loopholes and rectify problems as they occur. Ultimately, it’s about reinforcing the value of performing well and motivating them to keep exceeding your expectations.

Here are some performance trackers you can use when you outsource your online data entry services:


A backlog is a list of pending tasks that are either in the process of being worked on or incomplete. Data entry tasks can go unresolved for various reasons. Open tickets can be attributed to slow performance or if there has been an unforeseen peak.

Using a backlog metric, you can gauge the potential revenue by mapping the accepted work that has not yet been fulfilled. You can calculate the backlog in hours that you can then convert into weeks. A healthy backlog is between four and six weeks for day-to-day and weekly work.  

Schedule Compliance

Also referred to as adherence to schedule, this KPI metric measures how many of the tasks set for a particular period are accomplished on time. Essentially, it evaluates your external data entry team’s ability to complete deliverables as promised. 

Schedule compliance uses percentages. You can calculate it by dividing the hours spent on a particular task by the total scheduled work hours.


One of the most used metrics for evaluating the quality of service is the net promoter score (NPS). You can also use other KPIs to gauge your external data entry team’s quality performance using the complexity metrics or the number of complaints per period. You can use these metrics if the data you want to measure is not numerical.


Companies can use quantifiable KPIs to evaluate projects that are in ratios and number form. The easiest way to gauge what you’re observing is by counting, such as the number of correctly filed data. Conversely, percentages make a good KPI when you want to know how many from your population fit your performance result.

Lastly, ratios are great at measuring productivity when you outsource your online data entry services. For instance, the total number of data encoded is divided by the total number of hours spent.


The focus of the process metric is on efficiency. It assesses how external employees perform by comparing the procedures and systems against the objectives. A balanced scorecard is commonly used for this metric. The scorecard is geared toward aligning the employee’s performance with the project goals.

Low-level KPIs assess the process in specific projects, while high-level KPIs evaluate the team’s overall progress. 

6. Keep in Touch with Your External Service Provider

While operations are running smoothly, you should still conduct regular meetings with your back-office outsourcing team. Schedule a regular time when you can review data quality and volume and discuss any issues that might arise. 

7. Review Your Return on Investment

You can reduce costs when you outsource your online data entry services. You can also boost your bottom line by allowing your employees to do higher-value work. So if you want to calculate your ROI with your outsourcing initiative, you need to look at the costs and the revenue generated. 

How much value are you producing with your outsourced data entry arrangement? Is the revenue higher than the outsourcing costs? If the answer is no, then you might need to review certain things.

8. Check out Other Outsourcing Opportunities

If you have generated an impressive ROI after outsourcing your online data entry, why not look for other functions you can outsource or automate? Many BPO companies manage data entry and a variety of other back-office functions. If you’ve successfully discovered a good outsourcing provider, consider discussing with them the other ways they can help. 

Benefits of Outsourced Online Data Entry

Asian office worker smiling while typing away in her laptop.

There are many reasons why companies outsource online data entry services. This section of the article talks about the advantages you can expect when you outsource your online data entry services.

Accurate Data

An excellent external service provider offers rigorous screening and training procedures before onboarding a data specialist. So you get the assurance of working only with the best data experts in the industry. Plus, a QA officer will be assigned to check the output of your external data entry team.

Quick Turnaround Time

Your selected outsourcing provider will work with your company to establish KPI metrics per agent. This is the common practice in most third-party providers to make sure they’re delivering expected results.

Cost Efficiency

Outsourcing your online data entry services means that you don’t have to pay for employee salaries, benefits, and other infrastructure and equipment expenses. Moreover, labor rates in certain countries such as the Philippines are much lower.  

High-quality Service

When you outsource, you can tap into well-trained, professional, and competitive employees who will help you grow your business faster. BPO companies in the Philippines are one of the best in terms of delivering results regardless of your company’s size. Businesses from startups to large SMEs trust BPO companies in the Philippines to oversee their data entry.


With a reliable BPO provider, you can rest assured that your data are protected and safe. A good outsourcing company always prioritizes its clients’ data confidentiality and safety.

Improved Productivity

Many companies seek the help of BPO companies for back-office support such as data entry. If you outsource data entry services to a dependable third-party vendor, you can guarantee quality services and focus on your core competencies at the same time. 

Disadvantages of Outsourced Online Data Entry

Keyboard and lock on a pink background - concept of data privacy

While there are many advantages to online data entry outsourcing, there are also potential risks. Here are some of them:

Potential Privacy Issues

You need to be cautious about giving third-party vendors access to your private business information. Security breaches and information leakage can happen and disrupt your operations. So make sure to choose a service provider that has certifications and information security standards.  

Lack of Oversight

You have less control when you outsource your online data entry. Tracking your external team’s progress means that you need to maintain open communication.

Possible Low-quality Service Outcomes

You risk getting low-quality service when you don’t pick a service provider carefully. Instead of saving on expenses, outsourcing might cost you more. To avoid this, make sure to work only with an esteemed BPO company with a reliable track record.

What Industries Outsource Online Data Entry the Most?

The outsourced data entry industry will reach over $500 million by 2025 at a compound annual growth rate (CAGR) of almost 6%. The driver behind this is the increasing need to improve efficiency in operations and decrease costs.

Many of the primary consumers of outsourced data entry come from financial services, banking, manufacturing, healthcare, insurance, telecom, and IT industries. The most prominent companies that outsource online data entry include BOSCH, Xerox, and Amazon. 

Final Thoughts 

Final Thoughts - Outsourcing Online Data Entry is a business strategy

Your full-time employees should ideally focus entirely on tasks that bring added value to your business, such as relationship-building, service delivery, and innovation. However, the reality often diverges, with staff becoming mired in essential but non-value-adding activities.

Choosing to outsource your online data entry services is both a financially and strategically sound decision. It allows you to delegate routine tasks to a specialized team, freeing up your staff to focus on core business functions, often at a reduced cost.

It’s crucial to approach outsourcing with caution to ensure success. Follow the guidelines discussed in this article to identify an external data entry provider that aligns well with your company’s needs.

Unity Communications
At Unity Communications, our mission is to consistently assist our clients in growing and achieving success while providing superior leadership and customer service. Our team of over 350 onshore, nearshore, and offshore BPO agents caters to startup clients and Fortune 500 accounts alike. More than 50 U.S.-based companies leverage our expertise to run, grow, and scale their operations
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