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.