From traditional outsourcing to integrated teams in data engineering

Deciding between building an in-house data engineering team and outsourcing is a critical choice for businesses. The challenges of recruiting and retaining skilled professionals often lead organizations to consider outsourcing. We can observe a shift in motivations and the evolving approach from traditional vendor management to holistic ecosystem management.

The persistent Tech talent shortage

A Deloitte Global outsourcing survey revealed that despite over half of the executives reporting increased staff numbers to support demand, talent acquisition topped their list of internal challenges. Furthermore, 62% admitted being ill-equipped to handle the impacts of poor employee retention. This predicament encourages firms to increasingly seek external service providers to tackle looming talent issues, emphasizing the strategic advantage of outsourcing skilled tasks like data engineering.

Shortage in tech talents is a growing concern, with a 2022 report from Staffing Partner indicating that 75% of recruiters struggled to find suitably qualified candidates. And Statista states web development is the most sought-after tech skill in 2023. 58,53% of all employees surveyed said they were looking for staff with web development skills. DevOps followed this in second place (35,55%) and in third place with Database Software (27,5%). Still, nearly a quarter of all workers are looking for staff with skills in AI / Machine Learning / Deep Learning (24,6%).

Outsource or not?

These figures suggest that outsourcing can greatly mitigate recruitment challenges, granting access to a global talent pool. However, deciding whether to build an in-house data engineering team or outsource the process is difficult. Both options have pros and cons, depending on various factors. A startup might find it economically beneficial to outsource its data engineering team, while a larger enterprise dealing with sensitive data might prefer to keep it under its roof.

However, Deloitte's survey shows the shift in why organizations turn to outsourcing. While cost reduction used to be the primary reason, acquiring new capabilities to address changing business models and technologies has overshadowed it. Particularly, sourcing AI/ML technology from service providers allows significant innovation with data, with 94% of organizations leveraging such services from third parties.

Evolving outsourcing model

Collaboration with external vendors is still crucial but is evolving into dedicated teams, known as Global In-house Centers (GIC), that operate as an extension of the parent organization but are located in different regions or countries. With comfort in remote work, organizations globally seek to expand their external workforce to new regions such as Latin America for USA near-shore access, or Eastern Europe instead of India.?

These GICs leverage local talent, time zones, and cultural similarities, providing benefits like cost-effectiveness and access to diverse skill sets. In this approach, outside vendors play a crucial role in providing specialized services and advanced capabilities that complement the in-house team's expertise.?

– Outsourcing data engineering to a trusted partner brings numerous benefits, including enhanced security and data management – says Abhijit Dinkar , President of Acaisoft, a software services company with offices in the USA, Poland, Latin America and India. – Our stringent security protocols and robust data governance practices ensure the confidentiality and integrity of your data. We not only fill the skill gaps but accelerate your projects, and transform your digital aspirations into reality with expertise and efficiency – adds Dinkar.

To sum up, this holistic ecosystem, combining internal and external services, aims to unlock immediate and long-term business value by strategically utilizing third-party resources alongside internal capabilities.

Need help in shaping data strategy? Contact us to explore collaboration benefits and bridge the gaps in your data initiatives.?