What are the pros and cons of data management outsourcing?

What are the pros and cons of data management outsourcing?

October 4, 2013

With all the processes and transactions companies make every day, managing the large volumes of accompanying data can be tedious. As a result, many are turning to data management outsourcing. Like other outsourcing solutions, this comes with potential advantages and disadvantages.


One of the challenges of managing data is the lack of resources. Some companies, especially small businesses and enterprises, don’t necessarily have additional funds to form an in-house department. Instead, they can choose to outsource to a third party service provider at a fraction of the cost of hiring a team of data management specialists.

Similarly, many companies simply do not have enough employees to manage their databases. Outsourcing can easily help them with this staff shortage by providing diligent workers to address their data management needs, such as with data entry, data mining and warehousing, and data cleansing.

Data management outsourcing also results in more versatile service options to better address a business’ needs. It also helps in the timely implementations of data-related tasks. This enables a business to focus on other valuable processes to ensure the company’s growth.


While outsourcing is a viable solution for business’ needs, there are still concerns regarding security. With more people outside their company accessing their sensitive information, many fear that the risks of data theft and loss are increased.

Moreover, the success of data-geared projects may be potentially hindered by problems associated with miscommunications. The company, for instance, may fail to clearly convey instructions, priorities, and goals to their outsourced data management specialist. It is also possible that the outsourcing firm may have inadequate resources and technologies to achieve the desired output.

Results may also be compromised when the provider does not have the required expertise and experience to deliver data management services.

A summary

Outsourcing enables a company to ease its administrative burden and achieve operational efficiency. However, it also comes with potential risks. In general, the success of outsourcing is based on selecting the right provider.

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