Why Companies Hire External Data Analytics Agencies: Even with an In-House Team

In today’s data-driven world, companies of all sizes are investing in analytics to drive business decisions, optimise operations, and gain a competitive edge. Many businesses have dedicated in-house analytics teams, so why would they hire an external data analytics agency?

The reasons vary, but in this article, I’ll cover some of the most common motivations behind the decision to seek outside help, even when a company already has its own analytics capabilities.

1. Lack of Specialized Skills

One of the most straightforward reasons companies turn to external data analytics agencies is that they require specialised expertise that their in-house teams don’t possess. Data analytics is a broad field, and not all analysts are equipped with every skill set required. For instance, a business might need a deep-dive predictive analysis using machine learning, but the internal team may not have experience in that specific area. In such cases, an external agency can bring in the advanced knowledge needed to get the job done effectively.

2. Capacity Constraints

Even the most skilled in-house team can be stretched too thin. Sometimes, companies face periods of high demand where the existing team simply doesn’t have the capacity to take on additional projects. Rather than waiting for the internal team to become available, businesses often choose to hire an external agency to keep things moving. This approach allows the company to meet deadlines without overburdening their internal resources.

3. Unwanted Tasks

Not all data analytics tasks are equally exciting. Some may be considered too mundane, repetitive, or outside the usual scope of the in-house team’s work. In these cases, the team may not be eager to take on such projects. To avoid disrupting the internal team’s focus on higher-priority tasks, businesses often bring in external agencies to handle the less desirable tasks. Outsourcing these specific projects can keep the in-house team engaged and focused on what they do best.

4. Objectivity and Independence

Another reason companies hire external agencies is the need for objectivity. Sometimes, an external perspective is essential, especially when internal biases might influence the analysis. External data analysts can offer a fresh, unbiased view, which can be invaluable for critical decision-making processes. For example, in instances where a company needs to assess internal processes or make strategic decisions, having an independent analysis can ensure that the data is interpreted without preconceived notions.

5. Lack of Awareness of In-House Capabilities

Surprisingly, there are instances where the decision-makers within a company are unaware of the internal analytics resources available to them. This lack of visibility often happens in larger organisations where different departments operate in silos. When a project sponsor doesn’t realise they have an in-house analytics team or doesn’t know how to engage with them, it’s often easier for them to hire an external agency to complete the work.

6. Executive Preference

Sometimes, the decision to hire an external agency comes from the top. A senior executive, such as the CEO or a board member, may have a personal preference for working with a particular data analytics agency due to past experience. This executive-level influence can override the internal team's capacity and capability, as the external agency may have delivered results in a way the executive trusts or prefers.

7. Reputation of the Agency

When a data analytics agency has a reputation for excellence, companies may choose to work with them simply because of their track record. Even if the internal team could theoretically complete the project, the external agency’s expertise in a specific area might be seen as invaluable. For instance, an agency with a strong background in a niche like retail analytics or supply chain optimization might be brought in to ensure that the company gets the best possible insights.

8. Cost Efficiency

Maintaining an in-house analytics team can be expensive, especially for mid-sized companies. Salaries, training, software, and infrastructure all add up. For some businesses, outsourcing analytics work to an external agency is more cost-effective than maintaining an entire team. This is particularly true for companies that don’t need full-time analytics support year-round. By outsourcing, they only pay for the work they need, when they need it.

9. Failed In-House Analytics Efforts

Building an in-house analytics team is no easy task. It requires hiring the right talent, ensuring adequate training, and providing the necessary tools and infrastructure. Many companies, especially smaller or mid-sized businesses, struggle with this process. When their efforts to build a fully functional in-house analytics team fall short, they often turn to external agencies as a long-term solution. These agencies bring a turnkey approach to analytics, providing both the manpower and expertise without the headaches of managing an internal team.

10. Outsourcing as a Strategic Move

For some businesses, outsourcing data analytics is part of a broader strategy to streamline operations and focus on their core competencies. Rather than spending time and resources building and maintaining an in-house analytics function, they prefer to work with an external partner who can deliver insights as needed. This allows the company to remain agile and responsive to market changes without being weighed down by internal constraints.

Conclusion

While many companies have their own in-house data analytics teams, there are plenty of situations where hiring an external agency makes sense. Whether it’s due to a lack of specialised skills, capacity issues, or simply a desire for an outside perspective, data analytics agencies offer valuable expertise that can complement and enhance internal efforts.

As businesses continue to rely on data to make informed decisions, the demand for flexible, skilled analytics support, whether in-house or external, will only continue to grow. For those running a data analytics agency, understanding these reasons can help you better position your services and demonstrate the value you bring to clients, even those with their own analytics teams.

I’d love to hear your thoughts on this topic! Have you worked with external agencies, or are you part of an in-house team? How do you balance internal and external analytics resources in your organisation? Let’s discuss in the comments!

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