Striking the Right Balance: In-House vs Outsourced Business Intelligence

by | Jun 14, 2017

The ques­tion of in-house vs out­source is ubiq­ui­tous: do we hire more peo­ple or part­ner with an out­side enti­ty? Com­pa­nies of all sizes ask this ques­tion about finance, IT, mar­ket­ing, ana­lyt­ics, oper­a­tions, and every­thing in between.

Choos­ing the right mix of in-house­/out­sourced is an impor­tant deci­sion that can sig­nif­i­cant­ly impact your company’s work­flows, costs, effi­cien­cy, and rep­u­ta­tion. But it’s also a dif­fi­cult deci­sion that often deter­mines your imme­di­ate or long-term suc­cess, or both. So how do you choose which route to take? It helps to know that in-house vs out­source isn’t an all-or-noth­ing deci­sion.

This post out­lines what you should strive to do in-house for busi­ness intel­li­gence and why, and how to approach out­sourc­ing part­ner­ships once you’re ready to move in that direc­tion.

Why In-House?

There are mul­ti­ple ben­e­fits to keep­ing your work in-house. Ask your­self, “What should I be striv­ing to do in-house for my BI envi­ron­ment and why?”.

Deeply Inte­grat­ed — Most com­pa­nies would pre­fer to own their sys­tems and process­es instead of rely­ing on an out­side agent. This is espe­cial­ly true when it comes to your own core com­pe­ten­cies. In fact, the more a project or func­tion is relat­ed to your core busi­ness, the more it makes sense to build com­pe­ten­cy in-house. You need peo­ple in-house that are mak­ing deci­sions about the heart­beat of the com­pa­ny or your depart­ment.

Cadence and con­trol — When you out­source, you depend on the sched­ule and avail­abil­i­ty of oth­ers. If their speed doesn’t match yours or they aren’t as respon­sive as you need, you may find your projects slow­ing down to match their pace. Keep­ing projects in-house puts you in the driver’s seat.

Cost effec­tive­ness — Why hire an agency to do what you can do your­selves? Even if you don’t have the skills, train­ing your own team means you don’t have to con­stant­ly pay for ser­vices. How­ev­er, keep in mind that although the hourly rate of work is less, the time and resources spent on inter­nal train­ing may be cost­ly in the long run. That said, in-house employ­ees will also have a greater per­son­al invest­ment in the project and are more like­ly to go above and beyond for excel­lence.

Why Outsource?

Effi­cien­cy—An out­side agency often has spe­cif­ic, focused skills that address your imme­di­ate needs. They’ve solved prob­lems sim­i­lar to yours many times in the past, so they can accom­plish your goals more effi­cient­ly than your own team or can enable your team to accom­plish those goals with few­er or no mis­steps. 

For exam­ple, we are often con­tact­ed by clients just before their big hol­i­day sales. They need imme­di­ate help to mar­ket to the right peo­ple so they can make the most of their very lim­it­ed sales days, and our spe­cif­ic exper­tise helps them do this effec­tive­ly with a quick turn around time.

Expe­ri­ence—Since out­side part­ners have dealt with many sim­i­lar chal­lenges before, they bring best prac­tices and learn­ings that your team may not be famil­iar with. Not only will they solve your chal­lenge quick­er than your team would, they may also solve it bet­ter.

Our BI team, for exam­ple, has helped around 100 com­pa­nies across mul­ti­ple ver­ti­cals make sense of their data. When we ini­tial­ly part­ner with com­pa­nies who need help with data-dri­ven deci­sion-mak­ing, our ques­tions and process­es guide their think­ing so that they can take bet­ter advan­tage of their data than they ever have before.

Strength­en­ing in-house teams—There’s a sub­tle yet pow­er­ful ben­e­fit of out­sourc­ing: your agency’s strengths can become your team’s. Pro­vid­ed there is an ade­quate degree of trans­paren­cy, your agency trains your team in the meth­ods and best prac­tices the agency uses. This has the longer-term val­ue of increas­ing your own capac­i­ty as you work with your out­sourced part­ner.

For exam­ple, we’ve worked with hun­dreds of com­pa­nies who need help imple­ment­ing DTM on their sites. Dur­ing the course of our work togeth­er, our clients learn more about imple­ment­ing track­ing than they ever have before. And our Media Advi­so­ry ser­vices focus on teach­ing our clients about the tac­tics, tools, and strate­gies of dig­i­tal mar­ket­ing so they can run mar­ket­ing cam­paigns more effec­tive­ly and effi­cient­ly.

Recommended Strategy for Creating Accountability in Outsourced Engagements

Once you’ve decid­ed which projects make sense to out­source, the big ques­tion is how to go about find­ing an out­sourc­ing part­ner. Out­sourc­ing is rarely an all-or-noth­ing deci­sion, and it is very help­ful to have a plan for the short, medi­um, and long term, all up front. This will help you be delib­er­ate in the way you part­ner with your out­sourced resources, set and mea­sure against clear goals, under­stand inter­im points in the project where progress should be eval­u­at­ed, and set a cadence to re-eval­u­ate your deci­sion to ensure the cur­rent strat­e­gy is still cre­at­ing the most val­ue for your busi­ness.

Choosing a starting point

When choos­ing to work with a part­ner, it’s help­ful to empha­size build­ing trust ear­ly by begin­ning with a project that’s low risk and high impact. This gives you the chance to under­stand the val­ue of that part­ner­ship, and gives your part­ner the chance to earn your trust.

Medium term checkpoints

As the rela­tion­ship grows, it’s key to con­sis­tent­ly revis­it whether your cur­rent scope or strat­e­gy is the most appro­pri­ate for your evolv­ing needs.

If the part­ner start­ed by intro­duc­ing new con­cepts or work­ing at a strate­gic lev­el, but are now doing the same things again and again, it may be more effi­cient or cost effec­tive to bring those repet­i­tive activ­i­ties in-house or out­source them to a style of ser­vice provider who spe­cial­izes in repeat­able exe­cu­tion.

On the oth­er hand, if they are push­ing themselves—and you—to look for new ideas to test and new ways of doing things, that is typ­i­cal­ly a good thing, but it’s also impor­tant to ensure that your orga­ni­za­tion is ready for that pace.

You can eval­u­ate the part­ner­ship by ask­ing the fol­low­ing ques­tions dur­ing the ini­tial project:

  • Does this part­ner deliv­er val­ue? In oth­er words, do they jus­ti­fy the cost of hir­ing them?
  • Do they have a plan for deliv­er­ing ongo­ing, increas­ing val­ue?
  • Do they focus on work­ing with you to train you so that you can in-house tasks which you now have to out­source?
  • Do you like work­ing with them? Can you see your­self work­ing with them over a longer peri­od of time?

If the answer to these ques­tions is “no”, you’ve learned that this invest­ment won’t pro­vide ongo­ing returns and isn’t worth con­tin­u­ing. If the answer is “yes”, you’ve found a part­ner who will like­ly add con­tin­u­ous val­ue to your busi­ness for a long time.

Ensure you soak up everything you can

Anoth­er key piece is to look for ways to get that long term val­ue men­tioned ear­li­er. The out­sourced rela­tion­ship should be grow­ing your own team’s capac­i­ty. Depend­ing on your appetite and avail­abil­i­ty, you can seek oppor­tu­ni­ties to learn and improve your own skills and expe­ri­ence. As you grow and learn, more of the tasks can pass from the out­sourced part­ner to your team, while the part­ner moves to sup­port you in more com­plex or advanced ways.

This blog post is a gen­er­al strat­e­gy guide, but every busi­ness is dif­fer­ent. At Search Dis­cov­ery, we start small, earn trust, deliv­er val­ue, and grow from there. Whether you’re look­ing to out­source a small project or a large under­tak­ing, con­tact us. We’re here to help.