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DATA ANALYTICS
The
changing
environment
of data
organisations, both from the client and
analytics
supplier side, have spotted this opportunity
and are already delivering analytics at least in
part from an off-shored environment (typically
India, but increasingly Eastern Europe).
The two key questions to ask before
embarking on the offshoring of analytics are:
By Matt Hutchison what will it save me and how much harder will
it be to deliver this work from a remote
General manager, Cogent Analytics location? Cost-savings vary according to
whether the KPO operation itself is outsourced
to a third party (lots of agencies - including my
own - already have this business running
rganisations that either use more complex, knowledge-driven operations is a offshore) or is set up as an in-house operation.
O
or supply data analysis much newer phenomenon, though some However, the savings can be expected to
services - and there are companies have been doing it for some time. KPO range from between 40 per cent to 70 per cent
more and more of them encompasses high-end processes like valuation, of UK-based costs. A recent case study we
every year - should take investment research, patent filing, legal and undertook demonstrated that off-shoring
note that the commercial insurance claim, and analytical-based services. analytics for Columbus Insurance reduced
landscape they operate in is changing. The Organizations that operate in these areas costs to 51 per cent of the UK-based cost.
field of Aanalytics and data mining fits (and others) need to be looking at the way The cost savings vary depending on the
squarely into the realm of Knowledge Process they currently service these requirements. nature of the off-shoring operation. There are
Outsourcing (KPO), which expressed simply is According to Evalueserve, the global KPO essentially three different ways organizations
Business Process Outsourcing (BPO), but market is expected to grow at a cumulative with a need for data analytics can benefit from
higher up the intellectual value chain. annual growth rate (CAGR) of 45 per cent over the KPO trend. Firstly, they can outsource their
BPO, which usually involves the offshoring (in the next two years to reach $17 billion in 2010. requirements to an existing off-shored KPO
most cases) of simple, repetitive, process-driven This is almost twice as fast as the more-mature operator. These organizations are pureplay
tasks, has reached maturity, with services such BPO market where CAGR is predicted to be 26 KPO operators who have developed in the off-
as call handling and data entry being highly per cent. As with any new and rapidly- shore nation of their own accord and with no
commoditised, low margin activities. For most expanding economic phenomenon, it is the input of capital or expertise from the
organisations with a need for these services, early-movers who will gain the advantage. developed economies.
access to low-cost BPO labour is now essential if So what does this mean for data analytics? It Secondly, the organization can create its
they want to remain competitive. fits all the criteria of KPO: it requires judgment, own captive KPO service by setting up its own
KPO, on the other hand, is much more of a specialized skills, decision making and operation in an off-shore environment using
green field. Comparatively, the outsourcing of intellectual input from its protagonists. Many its own capital and expertise. The third option
6 OPINIONS ON DATA | MAY 2009
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