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