Business Intelligence Blog from arcplan

Data Analysis for BI: In-house VS Outsource


Data analysis is considered to be a core component in business intelligence systems. The importance of data analysis pushes some company leadership to opt for outsourced data analysis while other business leadership prefers to stick with in-house data analysis. Let’s first take a look at the role of data analysis in business intelligence. Data analysis converts raw data gathered using different tools into meaningful data, which is usually presented to managers through reporting tools, and will aid managers in decision making. Ultimately, good data analysis leads to good decision making and successful business practices.  Outsource vs. inhouse

All managers agree on the importance of data analysis, but not all make the same choice when it comes to deciding how to implement these processes. Some managers think that it is worth investing in internal resources to support good data analysis in-house. This position is supported by the fact that internal resources have a better understanding of the business. Indeed, internal resources have the needed capability to perform data analysis in a way that would effectively serve the needs of managers in terms of data sources. In addition, the cost of data analysis when done in-house is significantly less than the cost of outsourcing. It would make more sense to assign data analysis to someone who is in daily contact with the business with less investment, than spending much more money on external help that would not necessarily provide managers with a fully personalized result. Last but not least, companies are not willing to share data with external parties as they consider it to be a confidential key element in the business, especially when an investment has been put in place to gather the data, and they prefer to keep it as their own.

The quality of the result of data analysis is a precious outcome that would consequently increase the profit of the business. Therefore, a number of business leaders are ready to approve investments, regardless of their size, in the favor of external resources for the purpose of analyzing their data. Some companies outsource their business intelligence and data analysis operations to external organizations. Those organizations are specialized in this field and have qualified and competent resources to analyze data for a specific business. In addition, they have more experience in data analysis for different businesses, which makes them familiar enough with any business. Also, they use professional data analysis tools and dedicate full working time to analyze the data. Accordingly, the external company would accomplish the task of data analysis really well, in less time, and provide the result to the business owner quickly and in a more sophisticated format. As a result, company’s internal resources would have more time to focus and look at the analyzed data in order to develop better selling strategies instead of spending time and effort analyzing data and then thinking about which strategies to adopt.

Whether the company managers decide to keep data analysis as an internal task or outsource it to an external party, there is an investment that needs to be done at both levels internally and externally. When companies invests in external resources, it actually follows an optimized shortcut for data analysis – It’s a time for money trade, beneficial for both parties. On the other hand, companies should prepare internal resources to collaborate with the external firm in order to maximize the benefit of the outsourced data analysis experience. The ultimate goal is to achieve good decision making based on well analyzed data. All concerned resources need to coordinate and contribute positively in the achievement of this goal and consequently make good sales or provide good service.


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