Data entry service is a booming industry, especially in countries like India and Philippines. Data entry export forms a substantial chunk of IT exports in these countries. With more than a million service providers in the country – registered and unregistered – the income potential in this industry is better than ever before. Data entry is provided in several forms. Different types of data entry processes exist. A host of service providers exist in the market to provide a wide variety of services. This brings with itself the classic lemons problem. A small percentage of these companies are fraudulent. Unexpected models of crime are followed in this industry. A very popular model is to take up a task posing as a data entry company and sub contract it to another company playing the role of a middleman. A variation of the same model consists of sub contracting the job to various home workers without any tab on consistency and quality. The middleman charges the sub contracted workers some commission for the task.

In a free economy where regulations are not adhered to, the onus is on the outsourcing company to select a proper vendor to outsource work to. It becomes imperative to safeguard one’s interest by following standard methodologies and using tools that aid in evaluating and selecting the right service provider.

Many companies look for project specific technical and financial capability. Lower cost generally takes priority over all other criteria. This is a risky approach and may result in unacceptable quality and lengthy turnaround times. We suggest the following guidelines for vendor selection:

Use standard documents like RFP or RFQ
There should be a formal document through which the requirements and specifications are documented in detail.

Experience of the vendor
This aspect is two-fold - experience in the same industry and experience with similar work. One of these may be enough for the vendor to carry out the task. The idea is that the vendor has a depth of understanding required to carry out the task efficiently.

Beware of low bidders
Some vendors may have low costs because of their business models like contractual employment and low overheads. Some may purposefully under quote to acquire the project and then compromise on the amount of work required to complete the project. This results in lower accuracy. To avoid this, a thorough check of the vendor’s credentials is essential.

Quality Management
This is a much debated issue in the data entry field. Non-serious vendors usually compromise on this as this requires the most time, effort and skill to deliver satisfactorily. The vendor’s quality management philosophy needs to be assessed.

Staff skills
Educational qualification is not very important in data entry industry. Therefore, companies need to assess other relevant skills like aptitude, typing speed, internet skills, etc.

References
When asked for references, you will surely get the best references. Sometimes, these may even be doctored. A bit of proactive investigation is required with other clients of the vendor (this may be found on the vendor’s website). The references provided by the vendor may be able to provide more references.

Risks
Risks associated with each vendor need to be considered. Financial and technical capabilities need to be assuring. Human resource policies, markets, clients, internal processes and reputation of the vendor need to checked.

As a last word, vendor selection forms an integral part of the entire outsourcing process. Vendors are supposed to perform better than employees of the organisation and must be able to add immense value to the organisation. A strong business relationship with the vendor is essential for the success of the outsourcing company.