Lack of Skills and Expertise Driving Data Analytics Outsourcing

Most IT outsourcing customers are looking for a way to save money, but a need for expertise is also driving more and more businesses to turn to outside service providers. This is especially true of businesses trying to make sense of the truckloads of information arriving daily at their data warehouses. They want people with specific industry knowledge and the skills to extract maximum value out of all that data – and even use that data to predict the future.

That might be why, according to a recent study by Tata Consultancy Services, the experience and skills of an outsourcer – not the need to cut costs – is what drives most customers to consider outsourcing analytics work.

According to the study, some four out of ten buyers said that “functional expertise in the domain was the key factor in choosing a service provider and an additional 35% sought experience in the same industry.”

Another skill customers said they want is “experience in re-engineering,” which the authors of the study say “drives home the need to not only deploy processes once but to deliver year on year value through improving processes.”

On the question of how unique a service provider’s services must be, the survey found a split between larger and smaller customers. Processes that were “unique and specific” were more important for larger organizations (with more than 25,000 employees), while smaller organizations (with as many as 25,000 employees) were almost equally divided between wanting processes that were specific and unique; shared across similar companies and that were industry best-in-class.

The TCS study also looked at how customers prefer to pay for their outsourced analytics services. It found that those who were currently outsourcing analytics processes preferred the more traditional methods of paying per FTE (full time equivalent) assigned to the project, or paying a fixed price. However, looking to the future, the survey showed that more customers plan to move to newer models based on the results of the analysis. Nearly 40% of the buyers planning to outsource in the next 12 to 18 months, the survey found, preferred output-based or transaction-based pricing models.

And when it comes to choosing a location to outsource to, the survey found that those who are currently outsourcing prefer offshore destinations more than those who have yet to outsource analytics. “This is understandable,” the survey said, “given that buyers with experience of outsourcing have already reaped the benefits of an offshore delivery presence.”