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When Outsourcing Analytics Offshore Makes Sense

May 25, 2016 at 3:00 PM

Thanks to its broad applicability, data analytics has rapidly become a critical business function for modern organisations. But with expertise in the field in short supply and high demand, companies with an identified need for data analytics are looking beyond their traditional borders to monetise their information assets.

Forrester Research predicts that a third of businesses will “pursue data science through outsourcing and technology”  as organisations become less process-driven and look to their data to find new opportunities for innovation. And with globalisation and technological advancements making outsourcing a realistic and practical option for businesses, this trend is set to gain momentum. With this in mind, let's take a look at why an organisation would even consider outsourcing their analytics capabilities in the first place.

Addressing Capacity and Capability

One of the primary reasons many organisations are outsourcing some to all of their analytics requirements is the shortage of data scientists and general analytics expertise.

There are countless small-to-medium sized businesses that appreciate the value of data analytics, but that do not have the resources or experience to build an in-house team of their own. This is where analytics outsourcing can provide the data expertise they need at an affordable cost. But there’s also demand on the other end of the spectrum, with large companies that already have an internal analytics team. In this case, the value comes from outsourcing low-level analytics and reporting, while handling the more advanced processes internally.

So, depending on the size and level of maturity of a company’s data analytics team, the requirement can either be to fill in a capacity gap of lower-level analytics skills for certain projects, or a capability gap of higher-level industry specific knowledge (e.g. credit analytics).

Whether the move to outsource is a temporary or a long-term strategic one, the challenge for businesses is to match their analytics requirements with a service provider that understands the intricacies of their business. Companies would do well to define an analytics roadmap in order to identify clear objectives that correlate with the BPO’s ability to meet them.

Read our blog on how credit managers are turning into information addicts

Technology-readiness means the time is right for outsourcing of analytics offshore

With global internet maturity, increased computing and data storage capacities, as well as a host of technological leaps acting as catalysts for business transformation, companies are able to extend their operations across borders with little consideration for geographical boundaries. Countries like South Africa, in particular, are attractive outsourcing destinations due to a favourable exchange rate, extensive technological infrastructure, complemented by cultural adjacency to English-speaking nations.

According to Tebogo Molapisane CEO of BPESA, after more than a decade in operation, the South African BPO industry is maturing to offer a range of business solutions to international prospects. In addition, as a long-standing destination of choice for BPO services, the country's familiarity with international business practices, norms and etiquette, along with its infrastructural and technological readiness, makes it an ideal offshore analytics destination.

Julian Diaz
Julian Diaz
Julian Diaz was Head of Marketing for Principa until 2017, after which he became Head of Marketing for Honeybee CRM. American born and raised, Julian has worked in the IT industry for over 20 years. Having begun his career at a major software company in Germany, Julian made the move to South Africa in 1998 when he joined Dimension Data and later MWEB (leading South African ISP). Since then, Julian has helped launch various South African technology brands into international markets, including Principa.

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