Challenges Small Businesses Face in Outsourcing Data Entry

Sustainability and profitability are two essential pillars of any business. Small businesses, in particular, need to cut costs to make their services attractive and withstand the competition. While outsourcing data entry eases the burden on small businesses in terms of workload and cost, it certainly comes with a multitude of challenges. Small enterprises have specific needs that can be addressed cheaply by outsourcers. However, outsourcing does encounter numerous challenges that need careful consideration:

  • Finding the right organization to outsource data entry work is the foremost challenge. Identifying the right offshore partner through RFI and RFQ is a tedious yet essential requirement. You need to find a company that suits your time, cost, and quality requirements. The contractor should be easily accessible and flexible enough to respond to your emergencies that may arise from time to time.
  • Assessing the cost of outsourcing data entry as compared to doing it onshore is a key challenge to consider. If a business is located in any of the Tier II cities in India, it is better placed to save costs by doing data entry jobs onshore than outsourcing them to companies in Tier I cities in Thailand or the Philippines. In cities such as Dehradun and Bhubaneswar, the low cost of living enables companies to find workers at roughly half the price compared to what data entry service providers in Bangkok or Manila offer. Therefore, it is pertinent to analyze and compare onshore and offshore options taking into consideration the location, overall benefit, and cost factors.
  • Finding the right service provider at the right cost is a challenge for small businesses looking to outsource data entry work. Affordability is always a big factor in the sustainability of small businesses, so they must rely on outsourcing work to data entry service providers to cut costs—but if it will cost more in the long term, their objectives will be defeated. It is always important to make a cost-effective analysis of pricing based on the abilities, technical support, and technology awareness of providers before accepting any proposal.
  • Monitoring the quality of the work received from the vendor poses a big challenge for small businesses looking for outsourcing data entry to boost profits. They are often found complaining of loss of managerial control, quality, and communication problems, especially for ongoing projects that span long durations. On such projects, small enterprises often find it difficult to monitor the progress of the job and are unable to exercise control on the day-to-day functioning of the vendor. This can be a big handicap for such businesses, and has the potential of leading to time and cost overruns, particularly if something unsatisfactory happens.
  • Availability of the support team at the partner's end for uninterrupted services is always a problem for small businesses compared to their larger brethren. Small businesses often receive less attention from their onshore or offshore service providers when compared to large businesses. They may eventually find themselves dealing with less experienced personnel once they award the project.
  • Small enterprises are more likely to suffer from communication gaps, particularly if they adopt a hands-off approach. The result may be vast communication gaps that are too difficult to bridge.
  • Threats to the confidentiality of sensitive information is one of the major challenges small businesses encounter in outsourcing data entry, particularly projects involving processing of employee data. This exposes the company's private information and other sensitive information to the contractor, which might be revealed to the competitors.

Cultural differences also emerge in contracting projects offshore that can defeat the overall objective of small businesses looking to outsource data entry. Effective communication, human interaction skills and regular personal interactions between vendor and client can help prevail over such a situation. No doubt, small enterprises often face some unique challenges in outsourcing data entry, but overcoming them has become a pre-requisite for their survival and offers convenience to start-ups or small businesses. Small businesses can very much make the most of the outsourcing data entry if they consider all these challenges closely and find solutions.

Ask for a Free Trial!