Analytics services segment, the least affected by economic downturn: ValueNotes

According to a latest research report published by ValueNotes, analytics services are the least affected segment by economic turmoil in the Indian BPM industry. The report claims that the number of providers offering analytical services as well as the revenue of pure play analytical service providers in India has increased rapidly. The report titled “Analytics: Financial performance Review” states that the revenue of analytical service provider in India has increased at compounded annual growth rate (CAGR) of 38% from 2007 to 2011. ValueNotes is a research and analytics service firm based in India. They provide both qualitative and quantitative research for the companies which help them to make informed decision. ValueNotes conducted a new study on the financial performance of 12 pure play analytical service providers who are primarily based in India. The study covered their financial performance from 2007 to 2011. The financial performance of the analytical service providers were measured on basis of the following parameters:

  • Size
  • Operating margins
  • Solvency
  • Efficiency

Companies are looking ways to extract information from the data that is being generated every second to gain an insight on the consumer preference and the market environment to build competitive edge over the rivals. This makes the analytics services the most attractive segment in the BPM industry. It is estimated that by 2020, about 35 zettabytes of data will be generated in the world which will drive the demand for analytics service providers further. In addition, the estimated shortage of analytics experts in US industry by 2018 will increase the demand for the analytical service providers in India. Excerpts from the report:

  1. The analytics services in India have shown exponential growth since 2007 making it most attractive segment in the BPM industry.
  2. The revenue of the Indian analytics service providers in 2011 stood at Rs. 2,445 mn.
  3. Large sized service providers dominated in revenue generation, while small sized service providers saw slow but steady growth in revenue since 2007.
  4. The aggregate revenue per employee of the service providers stood at Rs. 1,117,000 in 2011 and has been increasing at a CAGR of 8% from 2007 to 2011.
  5. According to the report, even though analytics service providers have improved their operating margin, the employee cost remains high when compared to the revenue.
  6. The medium sized companies have taken debt in 2008 to improve their financial performances and the debt-equity ratio of those service providers is the highest among their peers.
  7. Service providers taking steps to improve the financial performance is likely to see positive results in the future as the demand for analytics services is increasing.
  8. MuSigma topped the list in Service Provider Evaluation ranking 2011 followed by Fractal Analytics, Active Cubes, Manthan and Vehere.

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