Data analytics outsourcing is a pretty simple concept. It is when an organization takes all the data it collects and sends it away to a service provider be sorted and interpreted.
The global data analytics outsourcing market is relatively new and going through a major growth period at the moment, with a projected CAGR of 30.54% from 2014-2019.
Market growth in this segment hinges on two main factors: The consumption point of view, and the service provider point of view. From the consumption perspective, the Americas dominated the market in 2014, with a market share of 67.5%. On the delivery side of things, India was a key outsourcing destination, with a market share of between 60%-70% in 2014.
Why are more companies outsourcing their data analytics?
Exponential growth in data
Enterprises are improving their workplaces and increasing profitability by using software like ERP, CRM, SCM, and SFA. These systems help maintain effective business workflows and manage enterprise-wide resources, but they also generate a lot of data—any and all information related to customers, operations, suppliers, and other stakeholders.
To use this data effectively, companies need to break out the big data analytics in order to get any useful insights out of piles of otherwise unstructured data.
Need for cost reduction
But as with everything in business, simply interpreting data is not enough. Organizations are also under pressure to do so for less money, and are outsourcing a lot of business processes to less expensive locations.
Data process outsourcing comes with a slew of benefits; it helps enterprises gain access to skilled workers and advanced analytics technologies, while still maintaining a lean workforce. This in turn helps organizations focus on their core competencies in order to obtain a competitive edge in the market.
Software-as-a-Service business analytics
Some of the major barriers to adopting data analytics include the high initial investment, complex and time consuming onsite installation, and commitment of large IT budgets and workforce. In addition, data analytics requires system updates according to changing environments, which can be a challenge for organizations.
SaaS, on the other hand, provides a good way around these challenges. SaaS helps reduce initial CAPEX and lowers IT budget and analytics workforce commitments. SaaS-based offerings are making big data analytics more available to companies of all sizes, and will be a major driving force behind growth in the global data analytics outsourcing market through the forecast period.
