Analytics as a service area is being touted as one of the ‘hottest’ markets to be in, for providers in the services outsourcing industry. While this may indeed be true (and it is), the supply side is currently dominated by no one particular type of analytics provider. The growing demand for analytics has prompted several players to enter the space in the last decade.
There are currently: large, established IT-BPO firms that are keen to move up the value chain through analytics, consultants that use analytics complementarily to their services, established KPOs that have added analytics to their growing portfolios, and niche analytics players.As a result, these providers are approaching, defining and servicing client organizations in different ways, and we are yet to see an organized market emerge. This leads us to question what separates the wheat from the chaff; what are the key determinants to succeeding in the analytics market? In a new HfS Research report, co-authored by ValueNotes, titled ‘Where Offshore Analytics is Heading in 2011’ , we explore the market dynamics for analytics, to arrive at the critical success factors (CSFs), including:
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- Domain expertise and contextual business understanding across verticals – This is the most important factor for providers that are gunning for high-end analytics services such as modeling and integrated solutions. A strong layer of contextual knowledge about the client’s business results in analysis that is relevant to the business need – now and in the future. A differentiator for the long term.
- Multi-skilled talent – Cross-functional teams required for analytics are difficult for client organizations to assemble. These include mathematicians, statisticians, economists, analysts, PhDs, etc. Access to multi-skilled talent is hence a strong motivator for engaging with an external analytics provider. Analytics by its very nature calls for multi-faceted expertise in the areas of technology, statistics and domain knowledge, and the business environment in general. The challenge for providers, then, is the acquisition, retention and most importantly – the up-skilling of talent to take on complex analytics projects.
- Eye on the business value to client – Providers must aim to create a ‘business utility’ by coordinating information and expertise across multiple clients and verticals. A focus on converting data to actionable business insights will differentiate them from the dry ‘number crunchers’. Developing and communicating high-value analytics capabilities is critical for providers in the long run.
Supporting capabilities to these factors include robust technology infrastructure for handling client data, a hybrid of onshore-offshore delivery capabilities to provide end to end services, and the ability to scale to create verticalized solutions. As the need for analytics becomes more pronounced across business functions and verticals, the outsourcing and offshoring of these activities will definitely see a positive impact. The key to addressing this emerging demand lies in developing these critical capabilities, in alignment with client needs.