The 5 Factors That Drive Data Outsourcing - GroupOne Consulting, Inc.

December 19th, 2019 / Blogs

Outsourcing data can be hugely beneficial to small businesses looking to streamline costs, improve their overall efficiency, and comply with their sector-specific data security regulations. Here’s what you need to know about the factors driving small businesses to outsource their data, and why outsourcing may benefit your company.

What data outsourcing is

Data outsourcing is the process of hiring an outside organization, such as a managed services provider, to handle your data needs. This means there’s no need for you to buy your own data storage devices, or invest in extra office space to store the infrastructure.

The global outsourced services market is growing each year and is now worth over $86 million. Small businesses contribute to this growth, with over 37% of SMBs outsourcing at least a part of their services or operations.

The 5 factors driving small and medium-sized business to data outsourcing

Factors driving data outsourcing include cost, efficiency, and procedural streamlining – let’s take a look at the 5 most significant drivers.

Cost Predictability

Cost is a huge reason why businesses outsource their data centers. It’s expensive to purchase and maintain the appropriate hardware, and companies are under continued pressure to control their IT budget. Data outsourcing keeps costs manageable and predictable.

Internal Efficiency

Managing data centers can impede your staff from focusing on more productive, profitable tasks. Companies often outsource their data centers because they want to increase internal productivity and streamline day-to-day operations.

Limited Downtime

Website downtime costs businesses money. In fact, downtime costs the average US business $100,000 per hour, which a small business may struggle to recover from. Companies often outsource their data because they’ll benefit from reduced downtime and less chance of data loss or corruption. Without worrying about system performance, businesses can focus on staying profitable.

Risk assessment

A risk assessment of your business may reveal fundamental data security or compliance vulnerabilities that you don’t know how to resolve. Additionally, businesses often find that they don’t know how to comply with their sector-specific data security requirements, which leads them to outsource their needs to a specialist company that understands the evolving demands of regulatory compliance.

Expert Oversight

It’s becoming more complex, and more expensive, to safely manage energy-efficient data centers. Businesses may find that it’s more practical, and inevitably cheaper, to outsource this responsibility to a dedicated external team.

How to know when it’s time to outsource your data

The reality is that every business is unique, and so there’s no single way to tell when it’s time to consider data outsourcing. However, here are some ways to identify that it might be the right time to outsource your data needs.

  • It’s time to streamline your IT budget and company costs
  • You’re looking to improve your company’s internal organization
  • You can’t afford the monetary and reputation costs of downtime
  • Your line of business requires regulatory compliance
  • You don’t have the capacity to store the physical data centers your growing business needs

If you identify with these statements, it’s certainly worth considering data outsourcing.


Although many businesses outsource their data needs to streamline costs, there are a number of factors that influence a company’s decision to outsource to a data center. For more information on data outsourcing and the factors to consider for your business, contact us today.

Written by Chris Wiegman