Five years ago the big industry buzz was about analytics. The excitement it generated at the time matched the arrival of another hot new technology: the first iPhone (June 27, 2007 in case you forgot!)
Did the reality match the hype? (Analytics not iPhone.)
Today an analytics component has become table stakes in most outsourcing pursuits, a sure sign outsourcing buyers find it valuable. But in 2013, what is the analytics function actually doing to help outsourcing buyers become more competitive and profitable? The Outsourcing Center interviewed five industry experts to find out.
“While analytics has been a much-discussed topic in the past, it has never played a smarter and more pivotal role than now. Today our clients and prospects look to us for a wing-to-wing analytics-driven solution for business decisions,” says Arun Kharbanda, business unit leader, Research and Analytics Services, WNS.
Indeed, enterprises are beginning to rely on analytics for business basics. N Sarma, head, Analytics and Insights at TCS, believes “leveraging analytics will have an increasingly critical role in the way businesses make decisions in the future.”
Why? “Because the volume of data has grown manifold and customers have become more demanding in requiring quick resolution to their issues with timely information,” answers Rachana Grover, general manager, Research and Analytics, Wipro.
For example, social media’s traffic has exploded, with volumes growing exponentially. Here’s where the iPhone part comes in. Smart phones and tablets are fueling this explosion.
Over time this tsunami-like flood of information became overwhelming to most outsourcing buyers. They clearly needed help wading through the data. “It is not useful to get thousands of notifications. It’s easy to get overwhelmed and just turn them off,” says Andrew Harsch, Director of Marketing, Global Managed Services for Unisys.
For example, most service providers record and monitor voice-based customer calls for quality and training purposes, explains Dinesh Venugopal, executive vice president, MphasiS. The goal is to keep the customer happy ASAP. If the customer service representative has to wade through the Big Data repository to either analyze trends or pull out the customer’s most frequent grievance, it could take awhile. “This is possible quicker, cheaper and more accurately with analytics,” says Venugopal.
This is why this year enterprises are “placing greater stress on data-based solutions,” according to Kharbanda of WNS. This year he expects them to use analytics “at every stage of their business process—from problem identification to system performance, from modeling and forecasting to exploring opportunities at every step.” By year-end he predicts “there will be no department in our clients’ organization where analytics is not playing a pivotal role.”
The changing face of analytics
The definition and indeed even the role of analytics have changed over the years. Before the days of Facebook, analytics was pretty much a data mining exercise. “Organizations had access to large amounts of data but were unclear how to use it,” says Sarma of TCS.
This year the outsourcing industry is moving “toward true analytics” versus the past, which was much more about metrics, says Harsch of Unisys. He notes today service providers have new tools for both gathering and displaying data, which allows them “to do the analysis that is necessary to really have analytics. The data without the analysis is really not analytics,” he says.
For example, Sarma of TCS explains that “more data about customers doesn’t make it easier to develop a composite picture of them.” That’s why he believes “using the right applications to aggregate the data and deploying people with the right skill to interpret it” is the best way to provide the requisite insights for better business outcomes. “That is the key this year,” he says.
Fortunately, service providers have an integrated ecosystem of hardware, platforms and services to do this transaction “as a service” as well. Customers don’t have to invest in multiple tiers.
They also have the right people to interpret that data because they have direct domain-specific knowledge “gained over many years of running our customers’ key operations,” says Venugopal of MphasiS. This combination of new technology and deep industry knowledge allows service providers “to go beyond providing tools to actually building solutions that bridge information across all the channels their clients serve customers in.”
Sarma of TCS says predictability is the key to the success of any business. Analytics can contribute to predictability by trying to forecast the “unk unks (the unknown unknowns).” He says analytics is “a combination of science and art. The science part is the data, tools and technology and the art is the domain and analytics expertise. Any organization that has this mix can provide the right solutions,” he explains.
Today outsourcing services providers are crystal clear about the true potential analytics can unlock. Analytics in 2013 has outsourcing providers collecting, storing, filtering, then analyzing the each piece of information “to benefit the people, processes and systems involved in the business,” the WNS executive adds. Harsch of Unisys notes analysis only becomes valuable “when we can turn insights into actions.”
In 2012, the service providers say their outsourcing clients used analytics to:
- Increase sales
- Reduce costs
- Increase customer loyalty
- Enhance process efficiencies
- Forecast with more precision
- Empower the financial planners
This year analytics will become more proactive instead of reactive, says Grover of Wipro. Predictive analysis is the newest tool. “Clients are not only using analytics to make better business decisions but also predict future behavior, analyze risk and optimize growth,” says Sarma of TCS.
He notes one of the most certain ways to grow in 2013 is to have shorter decision cycles and quicker responses to market changes. “In these scenarios, executives need to make these decisions on the basis of accurate and insightful data. “Analytics helps assess the business environment accurately so executives can do a better job of predicting future trends.”
Analysis is becoming so embedded in business decision-making that Harsch says today “data is the key to ensuring the continuity of the business and the productivity of the end users.”
Upcoming trends to watch
Here are 2013 trends to watch, according to the experts:
On-demand, real time analytics will become available. Traditional marketing departments need this capability to provide the sea of people using smart phones and tablets with “exactly what they need when they need it and then help them tweet it to their friends,” says Venugopal of MphasiS.
Analytic data will find its way to tablets and cell phones. They are the new, requisite business tools, says Grover of Wipro.
A convergence of analytics, social media and cloud. For example, Venugopal says an MphasiS hospitality solution compares occupancy rates with customer sentiment on the Web and social networks.
The move to “one view.” Grover of Wipro observes companies want just one view of their customers across all portfolios. She says this “enables them to be more nimble in new customer acquisition and tweak their strategies to win back old customers.” She adds a unified view can also minimize delinquencies.
Defining ever smaller market segments. Venugopal notes that MphasiS clients are accessing all of their data, both in house and external, to derive “more specific insights into smaller and smaller target segments inching towards the market of one.”
A blending of analytics with simulation. Sarma of TCS says companies today view it as “essential to run various ‘what if’ scenarios to improve sales, reduce operating cost or optimize capacity allocation.” He says this blending can add “significant value in day-to-day business in the current dynamic market.”
So where does an organization start? Venugopal says the bottom line is organizations first need to determine the business objective they want to achieve. “Once you chart your business road map, the questions you need analytics to answer will automatically pop up,” he says. Outsourcing service providers are there to help their clients answer those questions.
What are you using analytics for? How has the insight helped? Please share some success stories.