The world data analytics outsourcing market is expected to reach $US5.9 billion by 2020, registering a CAGR of 29.1 percent during 2015 to 2020.
“Over the years, there has been an exponential increase in the data generated by enterprises,” says Gunjan Malani, Research Analyst, Allied Market Research.
“This data is now being outsourced to data analytics service providers enabling the enterprises to make effective insights-driven business decisions, offer enhanced services to customers, and avoid risks and losses.
“Most of the enterprises do not have in-house analytics capabilities or skilled workforce, thereby accelerating the growth of data analytics outsourcing market.”
Allied Market Research findings suggest that organisations are increasingly turning towards data analytics outsourcing due to its “numerous benefits” such as strategic decision making, operational efficiency, reduced operational costs, and enhanced customer service among others.
“The generation of massive amounts of unstructured data, owing to growing adoption of mobile devices, increasing influence of social media and affordable data storage solutions, drives the growth of the world data analytics market,” Malani adds.
“Stiff competition among established players in the market encourages them to adopt data analytics solutions to gain customer and market insights to increase sales and strengthen their market presence.”
For Malani, data analytics has gradually shifted from descriptive analytics to more advanced analytics such as predictive and prescriptive analytics.
Findings show that even though descriptive analytics accounted for 79 percent of the overall market revenue in 2014, predictive analytics is increasingly being used by organisations for predictive modelling, statistical analysis and forecasting.
Furthermore, in the coming years, prescriptive analytics is forecast to grow at the fastest rate of 37.7 percent during 2015 to 2020, owing to its capabilities to suggest actions and associated implications after analysis of predictions.
“Banking, Financial Services and Insurance (BFSI) is a major industry that outsources its data analytics requirements,” Malani adds.
“Greater availability of transactional data is encouraging banks and financial institutes to pursue data analytics in order to minimise risks, reduce costs, optimise profits and offer customised solutions.”
Malani says BFSI sector accounted for around 33 percent of the market revenue in 2014, followed by healthcare.
Moreover, the increased data generation by organisations across various industries such as retail, telecom, and media & entertainment, coupled with increased need for taking successful business decisions based on market analysis and insights, has driven the adoption of data analytics outsourcing among these sectors.
In addition, findings show that the media and entertainment industry is forecast to grow at the highest CAGR during the forecast period.
“Data analytics is implemented across different business functions such as sales, marketing, risk and financial analytics, and similar others,” Malani explains.
“Marketing analytics accounts for a major share in the global market, followed by sales analytics.
“A large number of organisations use marketing analytics for measurement and analysis of marketing performance and maximising return on investment.”
Regionally speaking, Malani says Asia-Pacific is the leading provider of data analytics outsourcing services with India, China, and Philippines being the prominent providers.
“Asia-Pacific is the global hub for data analytics outsourcing owing to its highly skilled workforce, efficient telecom and technology infrastructure and lower labour costs,” adds Malani, who says that most of the demand for data analytics outsourcing is generated by North America and Western Europe.
Looking ahead, Malani says the world data analytics outsourcing market is forecast to grow at a high rate owing to large amount of data generated by enterprises, increased adoption of mobile devices and social media, and reduction in data storage prices.
- Cisco's moving at the speed of digital, but what next for tech in 2016?
- INSIGHT: Getting emotional with Business Analytics… Can enterprise cope with the facts?
- DIY IT disaster recovery - Why businesses shouldn’t do it themselves
- Trans-Tasman first as Wellington-based tech firm takes out global IBM partner award