In today’s business world, data drives innovation and competitiveness. But are senior executives truly maximizing their potential? Outsourcing data analytics has become a strategic imperative and is not just an alternative anymore.
In today’s world, data doesn’t revolve around the data center. New data storage options, such as the cloud and the edge, are more adaptable and practical than ever before. Any authorized person, machine, or application can access the data whenever and wherever they need it. As per Forbes, data has evolved into an independent entity, and its potential uses are barely scratching the surface. It has been more than a decade since we entered the Big Data era.
It’s an era, when companies constantly receive large amounts of data from several sources, including social media, IoT devices, transactions, and customer interactions. Finding useful insights in the sea of data can be difficult, particularly for mid-sized businesses with little funding and experience. However, the global data analytics market is poised for significant growth, with projections indicating a compound annual growth rate (CAGR) of 34.0% in the coming years. In fact, there has been a dramatic increase in the demand for analytics outsourcing following the COVID-19 problems, according to Amaresh Tripathy, global business leader of analytics at Genpact.
Fortunately, outsourcing data analytics offers a compelling solution. By entrusting this critical function to specialized service providers, organizations can unlock many benefits, ranging from cost savings to enhanced decision-making and competitive advantage. This comprehensive article delves into why outsourcing data analytics should be a cornerstone of a person’s business strategy. Outsourcing in itself is a solution, but to understand why it’s crucial for data analytics, go through the reasons listed below.
Access to Specialized Expertise:
Benjamin Taub, CEO of Dataspace, said that outsourced analytics typically addresses two main shortcomings: a lack of expertise in the approaches and technologies and a lack of hands to do the grunt work of bringing data together and analyzing it.
The field of data analytics is evolving at a rapid pace; therefore, it is essential to keep up with the most recent techniques and tools. Outsourcing may help to avoid the costs associated with hiring and training internal staff and instead access a pool of highly qualified individuals with specific knowledge in data science, machine learning, and statistical analysis. Thanks to their extensive knowledge of the industry and years of experience, these experts can tailor their solutions to the specific challenges faced by the business. Outsourcing businesses also make sure their employees are up-to-date on data analytics technologies by promoting a culture of continuous learning and advancement.
Cost Efficiency:
According to a blog by invedus.com, the costs associated with establishing an internal data analytics infrastructure are high, ranging from recruiting staff to purchasing hardware and software.
Outsourcing allows the business to save money by moving these costs to another provider, who can then offer flexible pricing plans to meet the company’s needs. Outsourcing businesses can benefit from economies of scale, which allow them to negotiate better prices with technology vendors and acquire access to resources and capabilities that small businesses would not have the budget for. For instance, Dell, a global leader in technology solutions, successfully implemented outsourcing strategies by partnering with Asian companies. This allowed them to reduce production costs significantly, enhancing profitability and competitive pricing for their customers.
According to Sameer Dixit, Persistent Systems’ general manager of data, analytics, and AI/ML, “The outsourcing of analytics not only helps in reducing the cost of analytics but also increases the value and speed of analytics.” The analytics infrastructure is guaranteed to be functional and reliable by outsourcing partners, which means that the cost-effectiveness extends beyond the initial installation and covers ongoing maintenance and upgrades.
Focus on Core Competencies:
Hiring outside help with data analytics allows companies to reallocate internal resources to other strategic endeavors. Sustained growth and profitability are driven by innovation and agility, which are fostered by this strategic focus. Businesses can save time and money by outsourcing analytics instead of developing and managing their own in-house skills. This allows them to focus on launching new products and services faster, improving marketing campaigns, and providing a better customer experience. Outsourcing also facilitates collaboration across functional areas, which in turn allows teams to incorporate data-driven insights into organizational decision-making.
A notable example is IBM’s outsourcing strategy, where the company partnered with external providers to manage its IT infrastructure. By doing so, IBM could focus on its core business of providing advanced technology solutions and consulting services.
Risk Mitigation:
Data security and compliance are critical issues in the digital age, with strict laws like the CCPA and GDPR controlling the handling of sensitive data. To reduce the risk of data breaches and regulatory non-compliance, outsourcing partners abide by compliance requirements and industry best practices. Outsourcing providers protect the data’s confidentiality, integrity, and availability throughout its lifecycle with robust security measures and protocols. Furthermore, service level agreements (SLAs), which specify performance indicators and procedures for recourse in the event of service interruptions or breaches, are frequently included in outsourcing agreements. When committing their data to outside partners, these SLAs give businesses peace of mind.
Scalability and Flexibility:
Over time, business needs will change, requiring scalable solutions that can adjust to new demands. The freedom that comes with outsourcing data analytics is unmatched; one may adjust resources to meet demand without being constrained by fixed infrastructure or staffing obligations. Outsourcing companies are able to adjust their resource allocation in response to fluctuating demand, whether it’s due to the launch of a new product, expansion into a new market, or the changing seasons. With this elasticity, businesses may augment their own teams with specialized expertise and computational resources on demand, rather than having to pay for full-time workers.
Access to Advanced Technologies:
Businesses often turn to analytics outsourcing when implementing a breakthrough technology far beyond their existing skill levels. “These types of projects are more difficult to execute but also offer new sources of revenue and a unique differentiation to customers,” said David Tareen, director of AI and analytics at SAS Institute. Keeping pace with technological advancements requires continuous investment in infrastructure and training, such as artificial intelligence, machine learning, and automation capabilities, to deliver superior outcomes and drive innovation within the organization. By harnessing the power of these advanced technologies, outsourcing partners enable organizations to unlock new opportunities, optimize processes, and gain a competitive edge in the marketplace.
To sum up, in today’s data-driven market, companies that don’t outsource their data analytics are missing out on a strategic opportunity. Executives at the highest levels may drive innovation, competitiveness, and sustainable growth by maximizing the potential of their data assets through the use of outsourcing partners’ knowledge, scalability, and cost efficiencies.
Menal Partners understands the challenges mid-sized businesses face in harnessing the power of data analytics. Our tailored outsourcing services are designed to provide accessible and hassle-free solutions, empowering organizations to achieve their strategic objectives confidently. Contact us today to embark on the journey towards data-driven success.