To Outsource Data Entry or not to Outsource

To Outsource Data Entry or not to Outsource

Many organizations face a dilemma whether they should outsource their data entry requirements to vendors in under-developed countries or not. The predicament is understandable, people lose jobs at one end, while it is a boon for people at the other end.

The Pros for Outsourcing

1. Cost Saving

There is a phenomenal savings in costs. The wage difference between developed countries and under-developed countries is to the ratio of 20:1. This translates to about 38% savings in labor costs, where labor accounts for approximately 40% of the project cost. This is a major saving for any business and will help sustain it against competition.

2. Turn-around Time Convenience

The time difference between the US and countries in Asia of 9 to 12 hours is a major boon for businesses in the US. Documents which would otherwise have been processed the next day, get processed in the night, ready for viewing when offices open in the morning. Document processing or data entry is all about time schedules and most projects have a very tight schedule. Having the work done in-house overnight would mean higher costs for the organizations. The convenience of turn-around time far out weighs all other factors in favor of outsourcing.

3. Dedicated Setups

Data entry or document processing is not the core business of many organizations. They have to create a small team of people to manage this function. This is a deviation from their main activity. Outsourcing to vendors makes sense since it is their core business. The vendors are better equipped to handle such activity. They have the technical expertise, manpower and experience to undertake all sorts of document processing projects. Many of the vendors are ISO certified and quality conscious.

The Cons against Outsourcing

1. Loss of Jobs

For every project which is outsourced many jobs are lost to under-developed countries. Organizations face a dilemma whether they should outsource or not. People losing jobs in the homeland is an emotive issue.

2. Data Compromised

Many of the document processing projects which are outsourced contain critical data like financial details or medical history of people. This data falling into the wrong hands could cause immense damage to the parent organization.

To summarize the pros in favor of outsourcing far outweighs the cons against it. People losing jobs in the parent country is an emotive issue. The less critical operations can be outsourced while people are trained and graduated to manage the more critical aspects. The organizations would have to increase their training budget so that people can be absorbed in other activity instead of letting them go.