More firms turn to outsourcing for data management and analytics

November, 21, 2011: As in the case of outsourcing of various business functions, companies have now started to outsource their Data Analytics functions to Business Process Outsourcing vendors. The outsourcing of Data Analytics is in the infant stage, and now firms are experimenting with the concept.  

Currently there are not many companies that are outsourcing their data analytics function to vendors on a long term basis as in the case of outsourcing IT and other call center functions. One of the many factors that prevent the growth of analytics outsourcing is the lack of vendors with capability to handle end to end data concerned with the different functions in an organization.

Organizations are not ready to share their strategic information to outsourcing vendors and one of the main reasons behind this is that the vendors often serve more than one clients who are into the same business. Another factor that affects analytics outsourcing is the inability of the service vendors to deliver flexibility in their services. They focus on delivering analytics services that are predictable in nature. In most of the cases large service providers lack the required domain expertise and the ability to provide customized service to the clients.

However there are many other factors that promote the growth of outsourcing data analytics. Among those factors data quality offered by service providers is one which promotes the growth of Data Analytics outsourcing. In data analytics, data cleansing and enriching forms the first step which requires considerable manpower and expertise. The required expertise and man power is provided by the outsourcing vendors.

Cost reduction is one another factor that aides the growth of data analytics outsourcing.  Outsourcing will help companies to bring in discipline in their data by incorporating better control process. By selecting a vendor with domain expertise will help in building a better framework for managing data analytics and identifying more productive information opportunities.

The major areas in data analytics that companies outsource are data cleansing and enrichment, study of consumer behavior, market research etc.

Data Analytics outsourcing requires a long term relationship and commitment from the part of both customer and the service provider. Customer has to provide proper training to the service provider team to ensure that they are clear with the decision making process in the organization and various other relevant factors. The vendor should make sure that it has the necessary domain expertise or should develop the necessary expertise rather than depending on the information provided by the customer.

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