How Outsourced Data Management Has Changed Over the Years

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Written by Allie Delos Santos


Outsourced data entry has seen many developments and changes throughout the years. The rapid changes in the data management sector, propelled by growing regulations and changing market preferences, are making many firms reevaluate their operating model and technology while causing others challenges in keeping with the times. 

This article discusses the developments in data entry outsourcing over the past years and how it evolved from a one-off project to a reliable solution that companies use to take their business to the next level.

Today’s Industry Trends for Outsourced Data Management

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Outsourced data management involves working with an external provider to manage the cleaning, storing, preparation, integration, and analysis of information for your company. Typically, the outsourcer resides in offshore regions.

When companies outsource data management, they receive a significant support base that helps them reach their overall objectives. Data encoders analyze and oversee several tasks, including but not limited to:

  • Data encoding and analysis
  • Data compilation and auditing
  • Using data to deliver business intelligence
  • Technical report writing
  • Data quality reporting and management
  • Account and file management
  • Programming data management tools
  • Creating protocols for storage and retrieval of data
  • Defining system architecture and data hierarchies

A report from Technavio, a global market research firm, notes that the benefits of outsourcing are pushing the industry market forward with a compound annual growth rate (CAGR) of more than 7% between 2020 and 2024. The same report further explains that the BPO market size is expected to grow by $76.90 billion by 2024.

The principle of outsourced data management has not changed much, but the technology has, along with the role that BPO centers play across the world. 

Automation and cloud-based applications have created a closer connection between processes, technology, and people. The incorporation of technology and people have changed the way we outsource data entry services and deliver solutions enabling sustainable growth and scale. 

Working in the Cloud

Cloud-based applications coupled with better internet connectivity allowed companies to outsource any task easily. If the work can be done online, then anyone can accomplish it anywhere. As a result, the work that offshore data entry services do has expanded beyond the manual encoding process. 

The Rise of Automation

Terms like machine learning, robots, and artificial intelligence became prominent fixtures in business jargon. Now, these ideas have become a reality for many companies, making way for greater automation and increased speed in many manual and recurring processes like data management.

Automation in data entry pertains to software-based solutions that optimize encoding by decreasing or removing manual processes altogether. Typically, this type of software can extract data from images, documents, PDFs, websites, and emails and format the relevant data into a structured file such as XML, JSON, CSV, etc.

Automated data entry tools take advantage of OCR and RPA, among other technologies, to manage recurring tasks and scan documents at scale. These technologies are flexible, fast, accurate, and scalable, saving companies precious resources and time. Such solutions enable employees to process data faster and eliminate errors.

Process Improvements

As more automated processes become the industry standard in several business operations, others become more redundant and inefficient. Still, outsourcing agencies are keeping up with the changes. In fact, they are a crucial part of the transformation of processes.

An outsourcing agency and the tech solutions they provide allow digital-based companies to scale and grow while staying true to their agile origins. For legacy organizations that require help in remaining current with changes in technology, outsourced data management provides an abundance of expertise in developing digital interfaces and analyzing current operations. These process improvements ensure that companies remain flexible and relevant.

Staff Upskilling

Upskilling your staff equips them with the necessary knowledge and technical know-how to take their service to the next level. With frequent developments in technology, keeping your employees’ skills up-to-date is crucial to keep up with the changes.

How BPO Changed Over Time?

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BPO is continuously changing and growing, from subcontracting parts of a bigger project to outsourcing the entire function, from processes with structured rules to those that must adapt to change, and from processes that were human effort-driven to man-machine driven. Lastly, we’ve seen the shift to the use of AI and process automation.

While business process outsourcing used to be a one-off project or a domain of entry-level tasks, it has dramatically changed. Outsourcing functions like data management have long been a cost-effective solution; however, large-scale companies are extending it to more advanced roles in their companies. This shift is primarily due to the need for connectivity, cost-containment, and agility.

Why Outsourced Data Management May Have Negative Connotations

Some companies refuse to outsource data entry services to third-party providers because they have associated certain risks with it. This section explores those risks. 

Exposing Private Data

The fear of confidential information being misused or stolen and the threat of data being jeopardized is one of the major risks associated with back-office outsourcing. When companies outsource data entry services like claims or payroll processing to a third party, they feel they may be putting confidential information at risk.

Not Finding a Dependable Service Provider

Not being able to find a reliable BPO agency that can deliver high-quality outsourced data management services within the required timeline is another cause for concern. This can potentially lead to a dip in the company’s image in the eyes of its customers.

Lack of Control on Data Entry Management

Not having absolute control of the data management process can be problematic to some companies when they outsource the function. Many businesses are scared of the lack of direction and authority when a third party steps in to do the work.

Strong Chance of Miscommunication

The high possibility of miscommunication is not uncommon when the outsourced data management provider is from an offshore location. There may be language barriers that could lead to the wrong information being encoded.

Difference in Culture

Some outsourced admin work may have issues resulting from cultural differences between the outsourcing agency and the hiring company. These may lead to lower productivity levels or poor communication.

Inadequate Focus

A third-party provider might be servicing several clients and offering their expertise in other outsourced data management work. As such, they might not be able to put their full attention on your company’s needs.

Inconsistency in Output Quality

There’s a possibility that you may end up choosing the wrong outsourcing provider. Some of the problems that result from this include authorizing the wrong responsibilities, delay in outputs, and inconsistent quality of deliverables.

But the advantages of outsourced data management far outweigh the risks. When you partner with a reliable provider to outsource data entry services, you can rest assured that the process is accurate and of high quality, coupled with the required security measures.

As a company, think carefully about which tasks you want to outsource. Consider also how much information must be shared with your outsourcing vendor.

To minimize outsourcing risks, consider the following steps:

  • Ensure you have established a strict quality standard for your data management process before committing to a particular provider.
  • Emphasize quality standards and timeframes from the get-go. Consider working with the BPO company for a trial period, assess, and then decide if you want to extend the partnership.
  • Make sure your outsourcing partner has security protocols in place to guarantee no leakage of data.
  • Pick an outsourcing provider with an excellent reputation and have positive client feedback. 

How Can You Use Outsourced Data Management?

Outsourcing as a winning strategy for businesses

Wondering what makes outsourced data management so popular? Companies outsource the task to BPO companies in offshore locations for a variety of reasons:

  • To save on costs and tap into wider talent pools. Many companies see outsourcing as a practical and economical way to manage their data. Many offshore locations, such as the Philippines, are favored outsourcing destinations for their wide pool of talents and low labor costs. In the area of outsourced data management, many BPO companies have proven their proficiency.
  • To improve business efficiency. Outsourced data management has proved its significance in business, with improvement in business efficiency, superior functional database management system, and enhanced performance coupled with smooth workflow. Efficiency is a key driver of business growth.
  • To automate repetitive tasks. If your business is still stuck with manual and traditional data entry procedures, your company might lag behind others. Now is the time to make changes with data entry outsourcing to manage recurring encoding tasks.
  • To improve data accuracy: In line with industry benchmarks, the benefits of outsourced data management are many. Companies that outsource encodings, such as healthcare firms, insurance providers, e-commerce brands, and logistics companies, reap the benefits of having accurate data. You need not worry about industry regulations and protocols since it’s the BPO company’s responsibility to make sure you remain compliant at all costs.
  • To leverage technology: Outsourcing companies offer state-of-the-art technology, organized infrastructure, skilled professionals, and high-end procedures. All of these come with top-level precision at a competitive price.
  • To work with industry professionals: Outsourcing companies train their employees to work with minimal mistakes, regardless of the volume of data set. They have the knowledge, experience, and resources to get the job done faster and error-free. The proficiency level of most in-house encoders pales compared to that of third-party data entry operators.
  • To ensure security and reduce risk: This is the most frequent concern about outsourcing data management. When a company outsources data entry, they are allowing access to confidential and sensitive information. Worry not, because outsourcing agencies follow strict security protocols to keep your data secure and private. They have the technical expertise to limit access to information that you gave. 

Ultimately, you can use outsourced data management to save effort, resources, and time. Offshore BPO provides cost-efficient solutions for your business. Outsourced staff is trained to provide your on-shore team with the help they need, accurately and efficiently.

The Bottom Line

For companies across all sizes, leveraging outsourced data management services presents a great opportunity to tap into wider talent pools and achieve desired results at a fraction of the cost. Additionally, businesses can start taking advantage of their data to improve decision-making and boost overall profitability.

If your company is allocating a large portion of your budget to simple admin processes like data management, consider how much you can save by outsourcing these tasks. When more and more organizations are taking advantage of outsourcing, do you want your business to lag behind?

Partner with Unity Communication to reap the benefits of outsourced data management. We have more than ten years of experience in delivering data entry services to companies across all industries.

Contact us now to find out more.

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