April 2006 has brought a lot of excitement to the B-School campuses across the country. The batch of 2006 is gearing up for taking the corporate world head on, while those who joined an year later are eager for their summer trainings. A major difference this year to the placement scene (both summers and finals) has been the prominent presence of ITES companies, especially in the field of Data Analytics. Genpact, MarketRx, Evalueserve, HSBC analytics etc have been common names on the campuses all over India. What is in this field of analytics that makes it so hot today, what are the long term implications and where does India stand to gain from it, these are the questions that are on the minds of many young professionals today.
Data Analytics
Organizations accumulate large volumes of data over the time. Simply defined, Data Analytics is the science of the extracting hidden predictive information from this data and using it for making strategic decisions and operational policies.
Do these numbers have a hidden message?
One can compare this to the cryptic messages hidden in figures in Dan Brown’s bestseller - The Da Vinci Code. On the face of it these are just plain numbers, a careful look tells you that there is something that they want to convey, and finally when you use formalized intelligence tools to go deeper into the data... you are able to mine the full value of the information and can see hidden trends emerging. That’s why this is sometimes also called Data Mining.
Where all is it used?
Banking and financial services sector is the forerunner in using analytics extensively. Market Research, Supply Chain, Pharmaceutical, Retail and Real Estate are some other sectors that rely heavily on it.
Banks and insurance companies use data to generate the risk profile of the customers. It helps in faster and more objective processing while dealing with customers seeking loans, credit cards etc. In health and pharma sector, analytics is used in clinical trials for testing drug effectiveness or claim analysis (insurance). Manufacturing companies are increasingly relying on analytics to manage inventories and optimize supply chain. In retail sector analytics help understand the in store behavior of the customer and the influence of promotion on him.
Skills.. Skills.. Skills!
After knowing how it operates, it is easy to appreciate now that such an analysis would require manpower with appropriate domain knowledge and analytical skills. Therefore these organization not just need people having fluent English but also possessing competence in one or more of these areas - Computer Application, Statistics, Operations Research, Finance and Accounting, Economics and Business Administration.
The role of India
Data Analytics has become one of the prime examples of profitable outsourcing to India. And this is expected to remain on the high growth path with the continuing boom in the offshoring of high end knowledge processes (KPO). Infact a recent study by Evalueserve identifies Data Analytics as one of the hottest processes for outsourcing along with Intellectual Property Research and Healthcare R&D. Now that KPO has found a firm ground in India and is looking at a revenue generation of USD 17bn by the end of this decade, we see diversification in this sector too. A major reason for this is that domain knowledge is more critical than scale. That explains the emergence of niche players like MarketRx that provides marketing analytics to only pharmaceutical companies. According to an estimate, companies are saving as high as 60-70% by offshoring analytics to India. Needless to say, majority of this comes through the salary difference of professionals at the post-graduate and doctorate levels. As of today this difference stands at 70,000 to 80,000 USD. (Figures are per person per annum)
Coupled with this cost advantage is an increase in the efficiency of operation (which also includes reduced errors) because normally graduates from premier Indian business and engineering schools are hired for this work. That makes India the most favorable destination for analytics offshoring.
Challenges!
The biggest challenge in this field is related to manpower. Availability, training and retaining of employees are the three issues that companies face. Although India has been the clear winner in the race till now but Russia, China, Israel, Ireland and Philippines have been lately very aggressive in bagging offshoring contracts from the US and UK. With Indian salaries rising at a higher rate than the world average and one of the biggest potential threats – China – stressing on learning English, it is imperative for Indian companies to build upon quality rather than cost (which is not a permanent factor) for always remaining in lead in the world of Data Analytics Outsourcing.
Data Analytics
Organizations accumulate large volumes of data over the time. Simply defined, Data Analytics is the science of the extracting hidden predictive information from this data and using it for making strategic decisions and operational policies.
Do these numbers have a hidden message?
One can compare this to the cryptic messages hidden in figures in Dan Brown’s bestseller - The Da Vinci Code. On the face of it these are just plain numbers, a careful look tells you that there is something that they want to convey, and finally when you use formalized intelligence tools to go deeper into the data... you are able to mine the full value of the information and can see hidden trends emerging. That’s why this is sometimes also called Data Mining.
Where all is it used?
Banking and financial services sector is the forerunner in using analytics extensively. Market Research, Supply Chain, Pharmaceutical, Retail and Real Estate are some other sectors that rely heavily on it.
Banks and insurance companies use data to generate the risk profile of the customers. It helps in faster and more objective processing while dealing with customers seeking loans, credit cards etc. In health and pharma sector, analytics is used in clinical trials for testing drug effectiveness or claim analysis (insurance). Manufacturing companies are increasingly relying on analytics to manage inventories and optimize supply chain. In retail sector analytics help understand the in store behavior of the customer and the influence of promotion on him.
Skills.. Skills.. Skills!
After knowing how it operates, it is easy to appreciate now that such an analysis would require manpower with appropriate domain knowledge and analytical skills. Therefore these organization not just need people having fluent English but also possessing competence in one or more of these areas - Computer Application, Statistics, Operations Research, Finance and Accounting, Economics and Business Administration.
The role of India
Data Analytics has become one of the prime examples of profitable outsourcing to India. And this is expected to remain on the high growth path with the continuing boom in the offshoring of high end knowledge processes (KPO). Infact a recent study by Evalueserve identifies Data Analytics as one of the hottest processes for outsourcing along with Intellectual Property Research and Healthcare R&D. Now that KPO has found a firm ground in India and is looking at a revenue generation of USD 17bn by the end of this decade, we see diversification in this sector too. A major reason for this is that domain knowledge is more critical than scale. That explains the emergence of niche players like MarketRx that provides marketing analytics to only pharmaceutical companies. According to an estimate, companies are saving as high as 60-70% by offshoring analytics to India. Needless to say, majority of this comes through the salary difference of professionals at the post-graduate and doctorate levels. As of today this difference stands at 70,000 to 80,000 USD. (Figures are per person per annum)
Coupled with this cost advantage is an increase in the efficiency of operation (which also includes reduced errors) because normally graduates from premier Indian business and engineering schools are hired for this work. That makes India the most favorable destination for analytics offshoring.
Challenges!
The biggest challenge in this field is related to manpower. Availability, training and retaining of employees are the three issues that companies face. Although India has been the clear winner in the race till now but Russia, China, Israel, Ireland and Philippines have been lately very aggressive in bagging offshoring contracts from the US and UK. With Indian salaries rising at a higher rate than the world average and one of the biggest potential threats – China – stressing on learning English, it is imperative for Indian companies to build upon quality rather than cost (which is not a permanent factor) for always remaining in lead in the world of Data Analytics Outsourcing.
