Examples of analytics services include analyzing the impact of TV advertising on customer acquisition or identifying and removing duplicate entries in a prospect database to increase accuracy. The latter involves the use of algorithms to split American and foreign names into their phonetic components and find matching names in a database. Eliminating duplicate names enables more efficiency in up selling and cross-selling campaigns, customer-complaint resolution and obtaining a 360-degree view of a customer. Data-analytics firms face some stiff competition from captive operations, which have moved many of their analytics offshore. General Electric has 1,000 employees working on analytics in India, American Express has 350 and HSBC has 200 working in India. Some onshore companies, such as Capital One Financial have ingrained analytics into every one of their business processes, so the company is always clued in to what products are selling and to whom, and which products are profitable, so that it can adjust its marketing strategy accordingly. Large financial institutions have thousands of employees working on analytics. As their numbers grow, the case for outsourcing and offshoring becomes stronger because of the labor arbitrage and the abundance of talent. ?A typical project will entail about a dozen people, most of them highly skilled, who will be dedicated to the project for six months or more,? says Lalit Wangikar, VP, Inductis, India operations. Under those circumstances, offshoring will be an attractive alternative to fielding an internal project team. Working Directly with End Users In one of the models of KPO delivery, the service provider works directly with the end user ? a financial institution, media company or a manufacturer ? and functions as a professional-services firm, performing onsite data gathering, interviews, problem definition and solution. Inductis, an Indian service provider that specializes in analytics, employs this model, which it calls staff augmentation because it involves embedding consultants within the client?s organization to solve problems such as customer-life-cycle management, product development, business re-engineering and financial management. A typical consulting team will include an analytics lead, with 3-5 years experience leading data-intensive analytics projects; a modeler, with 2-3 years experience in developing statistical-analysis methods; and a programmer analyst, with two years experience in data loading, quality checking, ad-hoc analysis and report generation. The work that this team will perform includes hosting, managing and creating an integrated view of the client?s customer data; generating samples based on ad-hoc or streamlined survey requirements and performing complex data analysis; and model validation and scoring.
Inductis deploys its in-house methodology, MicroAnalytix, to discern the meaning of endless streams of data and to optimize customer targeting and acquisition, identifying cross-selling opportunities and managing risk. Typical engagements include strategic planning (e.g., assessing both internal and external causes of slowing growth at a credit-card issuer); risk management (e.g., designing fraud detection and prevention systems for a commercial lender); attrition prevention (e.g., segmenting an insured customer base for a health insurer); and offshore optimization (e.g., optimizing the ratio of offshore and onshore technology-development consultants). Inductis also has a separate analytics service that provides lead management and prospect data maintenance, support for ongoing analytics tasks such as customer-acquisition campaigns, ?swing? capacity for risk and marketing-analytics teams, and collections file processing. Working Through Market-research Firms Another model for delivering analytics services is to work with market-research firms that work directly with clients. In this model, the market-research firm becomes the client of the offshore service provider, offloading some of the more data-intensive functions to the service provider. These service providers don?t design the research itself; their job is to provide support services to the market-research firm. ?We?re doing what the operations department of a market research firm used to do,? says Rahul Sahgal, President and CEO, Annik Technology Services. ?Even the largest operations, such as that of U.S.-based NPD Research ? an Annik customer ? are being outsourced,? he says. Annik focuses on providing research and data-related services. These include data normalization and cleansing, conducting market research and customer-satisfaction studies, formatting unstructured data into structured data, and data delivery, including charting and report-generation software. The company, which has 20 customers in the U.S.A. and Europe, is skilled in the use of SPSS and other statistical methodologies. The firm develops reporting systems that can create presentation-ready reports, including tables, graphs, and narrative analysis. The value added is the boost in productivity and reduction in human error for the preparation of complex reports comprising large number of pages with information derived from multiple data sources.
As with other forms of KPO, the potential for market-research analytics is huge. The market-research industry totals $22 billion globally, of which 40% can be outsourced, says Sahgal. ?About $40 million in processing work is being performed in India by third-party service providers, and captive offshore operations account for another $60-$70 million,? he says. The Indian market is dominated by a few players, such as WNS? Knowledge Services division, Evalueserve and Annik.
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STEPS | ||||||||
8 | Isolate the analytical tasks employed by your company, such as financial analysis, market research or customer acquisition, and separate the back-office tasks such as data cleansing and normalization | |||||||
8 | Perform a cost-benefit analysis of sending this work to an outside service provider, either onshore or offshore | |||||||
8 | Evaluate service providers based on their proven expertise in a particular domain, as well as the depth of their analytical skills, including familiarity with statistical-research techniques. |
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