Return to Archive Runtime - The Software Outsourcing Newsletter for Executives and Investors from Accelerance and Steve Mezak Outsource Your Data Development Many software companies outsource software development. Now software companies that offer data products and companies that digitize and process their customer's data are outsourcing their data entry operations. Outsourcing your on-going data entry is an excellent way to save money and improve quality by using an operation that focuses on just your data entry activities. Outsourced data entry operations are a subset of the often talked about Business Process Outsourcing or BPO. These operations handle the paper shuffling central to many businesses. BPO operations process expense reports, insurance claims and tax returns, and deliver sophisticated evaluation and diagnosis from electronic versions of medical images. As a friend of mine said recently, the bits are weightless and they travel at the speed of light. There is no reason data entry work cannot be done offshore. Some software companies feel more comfortable setting up an outsourced data entry operation than outsourcing their software development. Actually, data entry operations often require their own software development capability. The software is created for internal use and facilitates accurate entry of the data being captured. My first exposure to offshore outsourcing was about a dozen years ago at one of my startups. The company had two products: a modern client-server enterprise software product that enabled electrical engineers to search and select electronic parts for systems they design. The second product was the database containing records for over a million electronic parts - everything from diodes to DRAMs. The CEO was originally from India and he had a key business goal of creating a low-cost operation there to build and maintain the database. The Internet was just emerging and had not yet made its way reliably, even to Bangalore. Therefore, we shipped many paper documents, books and catalogs to India via DHL, the most reliable international shipping service at the time. These days, scanning and processing of paper is more easily done in the USA. The cost of sending electronic images is near zero compared to what we used to pay DHL. The books and catalogs themselves were carefully cataloged into a carefully designed data entry process. Individual pages were scanned in and then processed electronically. Optical Character Recognition (OCR) techniques could not be used because of inconsistent use of fonts, special symbols and Greek letters commonly used in electronic part specifications. The data entry process was organized by part category. Each category had its own set of parameters and rules were defined in the software to help accurately guide the data entry process. For example, valid ranges were entered for each parameter to avoid incorrect data sneaking into the database. There is no such thing as a 2 Farad capacitor. The value must be 2 microFarad or 2 picoFarad, depending on what makes sense for the part category. In some cases the software could derive data values from other values already entered. For example, a brief part description field was often a concatenation of various parameters describing the device. The description field for a resistor might be "1 Mega Ohm, 10%, 100W" and was automatically created from the parameter values entered in other fields. We had to create our own software to facilitate the data entry and this was also done with offshore engineers. Actually we brought engineering project managers to the US where they helped design and write the software. They then went back to India to lead the data entry process. The software to do this kind of data entry is typically done with a database forms application. The database can also track the person doing the data entry, the number of errors, the amount of time taken for data entry and other factors for improving operations over time. Another way to improve data quality is by using a double-entry process. Two people enter data from the same source. The software compares the data entered and flags any differences. The two people then resolve the difference themselves, or bring in the project manager if necessary to judge a difficult situation. Double entry is a common technique for typed text entry. This kind of data entry requires only data entry people that can read and type fast. Consequently, typed data entry is offered at a relatively low cost. The higher the skill required for data entry, the higher the cost. At the high end, you may want to set up your own offshore subsidiary to train and keep specially skilled workers. For example, the interpretation of medical images has become a popular outsourced service requiring a high level of skill. Other data entry jobs that require an educated judgment include research and the gathering of information using the Internet and other resources. Examples include lead generation for sales and screening of job candidates by reviewing electronic resumes and performing phone interviews via low cost VOIP. Security of your data entered offshore can be a major issue. Your sensitivity will depend on the type of data you are entering. Publicly available part data is of less concern than highly sensitive financial data like that seen in tax returns. Use of encryption, restricted access to the data, and using computers without removable media (floppy drives or CD-ROM writers) are usually sufficient security safeguards. As simple as data entry sounds, it must be carefully controlled to get good results. You should control the data entry and use a formal release process similar to what you would do during your software product release. You can derive multiple data products from one set of carefully entered data. For example, your data may be delivered in multiple database formats such as Oracle and Microsoft SQL Server. Or you may need to provide a version for Windows and Macintosh. Your release procedures should be automated to maintain the integrity of the captured data and provide a final QA procedure. Final QA should include automated testing that verifies that the data are readable in the release format and are unchanged from what was originally entered. Your automated testing and QA is another programming task that can be carried out by engineers in your outsourced data entry operation. Support of multiple data formats can be a non-trivial task. We delivered the electronic parts data in an Oracle database. Then we succumbed to the demands of one customer asking for an Informix version. This instantly doubled the amount of disk space and QA time we needed to complete the database release, which we did every 90 days. After a while we realized it was cheaper to give the customer the Oracle version for free rather than pay for the resources required to create a second version of the data! The frequency of release and the amount of data you need to enter will determine your best approach to outsourcing. Do you have a small amount of data entry that can be handled on a project basis? Contract outsourcing with a reliable offshore vendor is all you need. Do you need to enter large amounts of data requiring multiple shifts? Do you need to do enter and release data on an on-going and long term basis? In this case creating an offshore subsidiary is best. One of our clients is exploring this with a BOT approach (See Runtime - How To Build a Subsidiary in 24 Months (or less)). They are using 65 criteria to evaluate and select a data entry partner that will build them a data entry operation capable of rapid ramp-up to several hundred people. They want the option of converting this operation to a subsidiary in future. Creating a quality data product is very similar to creating software. The tasks of design, coordination of resources, QA and product release must be done carefully. Like with software product development, you can take advantage of low-cost outsourcing as an effective approach to creating your data products. Vision Resources Are you wondering how you will select an expert offshore team to develop your software? Use the Accelerance Vision Resources(sm) outsourced vendor selection service and cut the time of your vendor selection process by as much as 90%. Vision Resources leverages members of the Accelerance's 17 teams in 14 countries around the world. Click here to learn more about Vision Resources Accelerance, Inc. delivers impartial & expert strategies and services for risk-free outsourcing of your software development. Visit our web site at www.Accelerance.com   Until next time, Steve Mezak Accelerance, Inc. Risk-Free Outsourcing www.Accelerance.com 213 Garcia Avenue Half Moon Bay, CA 94019 1-650-712-8990 Contact me by email (c) 2005 Accelerance, Inc. All rights reserved. You are free to use material from the "Runtime" eZine in whole or in part, as long as you include complete attribution, including live web site link. Please also notify me where the material will appear. The attribution should read: "By Steve Mezak, CEO of Accelerance, Inc. Please visit the Accelerance web site at http://www.Accelerance.com for more information and resources on outsourcing and creating great software products."