New research from HfS Research, the leading research analyst firm focused on outsourcing and shared services strategies, and co-authored by ValueNotes, a leading provider of business research, shows major market momentum with the update of offshore analytics services. Key findings in the report discuss the following market dynamics:
• As data analysis techniques have become smarter and more sophisticated over the years, analytics have genuinely emerged as a specialized function of business activity, employed broadly across industries and corporate functions.
• The key verticals for analytics demand today are banking, financial services, insurance, retail, telecom, healthcare and pharmaceutical, and advertising, new media and entertainment.
• Some industry domain-specific analytics solutions have evolved, alongside more industry-agnostic functional / horizontal analytics gaining popularity due to unified business needs.
• The service provider landscape features a large number of providers offering end-to-end specialized analytics solutions to specific verticals. High-value third-party analytics solution providers are focused on providing value beyond cost arbitrage by leveraging a combination of onshore-offshore delivery models and the use of technology.
According to the report, over the last 15 years, the importance of analytics as a business activity has grown dramatically. Head honchos once used guts and intuition to guide decision-making. Today, data is the prime weapon in the management arsenal. As data analysis techniques have become smarter and more sophisticated over the years, analytics have genuinely emerged as a specialized function of business activity, employed broadly across industries and corporate functions. Analytics can be defined as the process of continuously exploring and investigating historical data, with the objective of gaining business insight, understanding performance and planning wisely for the future.
Analytics does not intrinsically fit the outsourcing model. The level of data sensitivity is usually high; the nature of the work is often complex and high-end, and considered strategic to business needs. Due to this, some clients set up or expanded captive units to deliver analytics, instead of outsourcing. However, in the last decade, third-party providers have gained significant expertise in the field of analytics. There are more vertical specializations emerging each year, as more clients gain confidence in vendor capabilities. Also, analytics is increasingly being used in combination with market research to attain holistic solutions for business problems. Consultants are leveraging analytics to statistically support their recommendations. These factors have accelerated the entry of niche analytics players in the last few years.
Trends such as these have been explored in the new HfS Research Market Landscape titled “Where Offshore Analytics is headed in 2011”. The study investigates industry drivers and the major services outsourced, the service provider landscape and segmentation, discussion of trends in outsourcing over the next few years and recommendations to buyers and providers of analytics. Commenting on the state of the industry, Phil Fersht, Founder and Chief Executive Officer and Head of Research at HfS Research and co-author of the analytics report, mentions,“The offshore analytics landscape has changed over the last decade from one dominated by captives of large companies, primarily in India. Today, the industry features a large number of providers offering end-to-end specialized analytics solutions to specific verticals. High-value third-party analytics solution providers are focused on providing value beyond cost arbitrage by leveraging a combination of onshore-offshore delivery models and the use of technology.”
Reetika Joshi, Senior Research Analyst at ValueNotes Sourcing Practice is a Contributing Analyst for this report. She elaborates on the key success factors,“The industry is still evolving, and providers are approaching, defining and delivering analytics in myriad ways. Deep domain expertise is invaluable, especially for providers looking at getting into high-end analytics. A contextual understanding of client businesses is a must. Analysis must be aligned to industry movements, and to the client’s unique issues and opportunities. This marriage of business sense with analysis is what will help high-end providers differentiate themselves, and domain experience is one of the few ways to create it.”
Some industry domain-specific analytics solutions have indeed evolved for niche as well as large players. HfS Research also notes that more industry-agnostic functional / horizontal analytics are also gaining popularity due to unified business needs. The key verticals for analytics demand today are banking, financial services, insurance, retail, telecom, healthcare and pharmaceutical, and advertising, new media and entertainment. However, there is an inherent need and multi-fold advantages of conducting analytics across functions and across industries. End clients must carefully evaluate their business functions in order to identify latent areas that may benefit from analytics initiatives. When a business process (e.g. F&A) is carved out, analytics is easier to apply. But organizations need to seek out hidden opportunities in areas such as risk analytics, buzz analytics and mobile web analytics to compete in the current environment.
For more information, please contact:
ValueNotes: Reetika Joshi | Senior Research Analyst, ValueNotes | reetika[.]valuenotes.co.in | +91 20 6623 1783
HfS Research: Tom Ivory | Vice President, Client Services, HfS Research | tom.ivory[.]hfsresearch.com | +1 800-449-4206 x9
ValueNotes (valuenotes.co.in), based in India, is a leading provider of market intelligence and research, with expertise across industries. Our strengths lie in our analytical ability, industry expertise, and the research and data collection skills of our researchers and analysts. We have built strong capabilities in the collection, interpretation and analysis of data – including quantitative and qualitative research.
The ValueNotes Sourcing Practice (sourcingnotes.com) is a dedicated team that actively tracks and researches the global outsourcing segment. The Practice has released several research reports on niche outsourcing areas, with a particular emphasis on the knowledge services domain. Our analysts work closely with leading IT-BPO companies and client organizations, both in India and globally through a variety of research based engagements. Our core research offerings include industry reports, as well as bespoke research services such as market/location assessments, partner/vendor selection, among others.