Why Should you Outsource Data Processing Services?

By Anolytics | 13 March, 2024 in Data Annotation | 2 mins read

Outsource Data Processing Services

Data is the backbone of any business operations and it needs to be in a correct format to enable business to meet their goals. It has relevance across industries. For instance, accountants require data from invoices to ensure proper and timely payment. Healthcare professionals require data of patients for accessing and managing patient records, and manufacturing companies require data from inventory documents for managing daily operations. Hence, data from all sources and formats is necessary for your organization and the challenge lies in how the data needs to be processed.

The issue at hand is that most data is stored in unstructured formats. Data is stored and shared in the form of PDF scans in image format making it difficult for computers to recognize and record data. This problem can be solved through manual data entry where an employee has to read the documents and reproduce the data is a structured format like an Excel spreadsheet.

Manual data processing comes with several drawbacks as it’s time-consuming, expensive, error-prone, and tedious. One of the ways of avoiding its pitfall is through data processing services. Outsourcing data processing services permits one to outsource their data processing requirements to enable them to invest more time on tasks can grow their business.

Outsourcing Data Processing Services

Data annotation outsourcing is a type of data processing service which involves data labeling for assisting artificial intelligence systems in learning and recognizing data types for producing useful output. Hence, it is important to gain an understanding of the advantages and disadvantages of outsourcing data processing.

S. No. Advantages Disadvantages

Automation software helps in maintaining complete control over your data processing tasks.

Lack of adaptability due to the fixed methods employed by your service provider which may or may not suit your requirements.


Assists in relieving employees from the burden of performing this time-intensive and tedious task.

Result in creation of third-party risks for your data security. Hence, a trusted partner is required to assist you in this journey.


The software may prove to be a better alternative when it comes to helping your employees capture data accurately to maintain complete control over your data processing.

Outsourcing data processing services prevents customization and improvement of data processing workflows.

Types of Data Processing Services

There are primarily three types of data processing which companies can choose to utilize:

1. Manual data processing

2. Outsourced data processing services

3. Automated data processing using a software platform

Manual and outsourced data processing services are budget-friendly and effective, however it requires one to forego control and can lead to lack of innovation with respect to workflows.

Automated data processing is the preferred option as it can:

1. Process data quickly and accurately without compromising data security and control

2. The right software can lead to saving of time and money

3. Simplify data processing

Please refer to the example below to understand the edge automated data processing has over the other two methods. Batch processing of hundreds of invoices instantaneously by uploading the invoices on to a system which automatically extracts the data and exports it to the destination system. The speed enables automatic real-time data processing. The comparison of automated process with manual process can offer valuable insights into the company’s workflow and efficiencies.

Hence, outsourcing data processing services helps in efficiently managing important information. It involves dedicating resources to make business decisions which are very important and play a strategic role.

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