Data management is a sensitive operation at every stage of the process. And with big data becoming increasingly important to 75 percent of businesses, corporate decision makers and data officers need to think carefully before they decide how they manage their incoming information; is it better to keep things in-house, or work with an external firm?
The Key Concerns
Ultimately, data exchange management comes with the following challenges and concerns:
- Privacy and security. The global average cost of a data breach for a company is $3.6 million, making privacy and security top concerns for any company that deals with data.
- Costs. Companies also need to acquire, organise, and manage their data as cost-efficiently as possible. All forms of data management require an investment, but some cost more than others.
- Time. There’s also a time component to consider; how long does it take to manage your system upkeep with each option?
The Value of External Management
Let’s start by looking at the value of using an external data partner:
- Existing infrastructure. By working with an external data partner, you can leverage the infrastructure that already exists, instead of building your own. This is important for everything from electronic data interchanges (EDIs) to long-term customer data. Investing in all the hardware, software, and maintenance contracts required to build your own operation is both costly and time-consuming, but if you’re using third-party infrastructure that already exists, that burden practically disappears.
- Dedicated professionals. Data management firms also employ some of the most talented, experienced people in the industry. You don’t have to go out of your way to track down and recruit the specialists necessary to keep your operation running; instead, you can rely on an already-curated team.
- External accountability. Though you hope nothing ever goes wrong, you can breathe a sigh of relief knowing if your data is ever lost or mismanaged, the external firm will be responsible for it. Instead of establishing emergency protocols and worrying about the possibility of shouldering the burden of a breach yourself, you can delegate that accountability to a specialising firm.
- Scalability. If you’re building and maintaining your own infrastructure, you’ll know that scaling can be problematic. Just because your data centre works adequately for your business needs now, doesn’t mean it will remain relevant for the long term. Working with an external provider gives you access to as many or as few resources as you need, and if your provider offers flexible or scaling plans, it’s even easier to make adjustments as you grow.
The Disadvantages of External Management
So what are the disadvantages, which make in-house management more appealing?
- Cost. Most data management companies will charge you a monthly retainer for continued operations, and the price may come with some sticker shock. But once you account for all the money you’ll spend on equipment, hiring, and training, the cost of an external management firm is reasonable by comparison ”and in some cases far better.
- Control and visibility. The biggest disadvantage of working with an external provider is sacrificing your own control and visibility. Because your data will be tied up on an external server and managed by people who aren’t on your team, you won’t have as much direct control over how that data is handled ”and you may find it harder to access or extract that data when you need it.
- Trust and transparency. Working with an external firm also demands significant trust, and for matters of data, trust and transparency are vital. This can make finding a reliable partner difficult and opens up dozens of variables for how things could go wrong.
So is it better to manage your data within your own company, or rely on a specialised external company to handle things? That depends on what your priorities are. If you’re looking to make things easier on your business, both regarding present management and future possibilities, external management is ideal. But if you need to guarantee full internal control (and you have the resources to do it), in-house is preferable. Make sure you understand the full costs, both short-term and long-term, of each option before proceeding.