Business analytics India in command Tapati Banerjee Data analytics is "the next frontier for innovation, competition and productivity. McKinsey Global Institute study Yet who would have thought that a 'Facebook like' would be a matter of such consequence? Welcome to the world of data crunching; where pundits are matching their wits and insights to decipher the message contained in innumerable likes, follow, shares and the bewildering range of social relationships between people and things, products or brands that all contribute to an understanding of current and prospective markets. Markets are the raison d etre of business and businesses with better analytics competencies have a distinct advantage for brick and mortal and digital companies alike. Customer analytics is king competency for e- commerce players in particular and India is right in Decision management or vertical solutions or analytics generally covers areas like market segmentation, predictive analysis, sales or revenue forecasting and are most common in banking and retail industry. The decision management industry is all set to become really big Bhupendra, CEO, InRev, in 2008 24 PURCHASE October 2012
the heart of this global business space. Writes the Guardian: Shopping in a U.S. department store? Surveillance cameras may be watching and not because you might be a shoplifter. In minutes, video of which aisles you visited, what products you picked up and put down, what you bought and the displays that caught your fancy will be sent to a company in Bangalore, India. These logs can be analyzed to determine propensity to purchase, what a customer's intent, satisfaction, sentiment is The differentiator As the social-technology company 140 Proof says, there are around two billion data points a day. Naturally the data scientist, also called the quantitative jock, is king and the business goes by the name of analytics that demands very specialized knowledge and talent to crunch the information with the sophistication that it deserves. Over time, analytics has evolved as the main differentiator while assessing the business value to be derived from the many customer interactions and business process and Indian companies are amongst the smartest in the business. There has been a sharp reduction in costs is courtesy cloud technologies and India's felicity with numbers. Vast canvas The scope for analytics is vast. IBM analytics, for instant, is assisting Jet Airways in its green mission with its Integrated Emissions Management System that maps Jet's carbon emissions and optimizes its fuel use by detailed analysis of each flight. Realizing this significant milestone as a part of the Strategic Outsourcing construct allows Jet Airways to use advanced analytics to map the carrier's carbon emissions, optimizing its fuel usage by detailed analysis of each flight, says Bhasker Gupta in his article IBM Analytics to Support Jet Airways Green Initiatives. The business-scape for the service is vast. How well do you know your customers? Claims status and history. Channel preferences. Individual profiles. Gathering and leveraging this information is the key to personalizing your relationship with each customer. By analyzing this data, you can also offer new products and services to help increase the value of every client. Centre your resources people, processes and technologies around your customers, says IBM's website offering its analytics services to the insurance sector. Genpact Ltd, another top Indian player, talks of achieving annual revenues from its analytics and research practice, contained in the company's smart decision services (SDS) division, of $1 billion in three to five years. Others call it the art of decision management and India is increasingly playing a critical role in the analytics business, large volumes of which have been shipped to this country, which provides the brainpower. Indeed, the In the last 10 years, the analytics industry in India has developed robust solutions that cut across horizontal functions, such as marketing, sales, supply chain, risk management and are also customized to meet the needs of various industry verticals. Today, the various in-house analytics shops as well as third-party analytics service providers have gained significant expertise to deploy these solutions on a global scale. Tandon and Chakraborty 26 PURCHASE October 2012
Source Economic Times, June 15, 2012 average Indian school's preoccupation with mathematics is getting translated into mega bucks with the math-stats combination forming the core of the analytics industry. Indian entrepreneurs are outing their best foot forward trying to match the multinational's zest in floating companies to capture a share of the global business. More than maths However, it takes more than maths to be successful at analytics; it needs a human insight that is rare to find and which India seems to possess: analytic skills need to be accompanied by a good understanding of business and industry. More importantly, there must be a clear appreciation of the technology and platforms for which the solutions are being provided. It means a o 360 understanding of the business space that will achieve fruition when analytics is comprehensively married to information technology because the nature and scope of this service is complex and vast. The business could even encompass warehousing data. Accenture, for instance, helps clients manage considerable data volumes across multiple business units. Its multi-terabyte capability typically involves implementing a custom-built data architecture on top of native relational database management systems (RDBMS) from providers such as Teradata (a division of NCR), DB2 or Oracle. This service is particularly beneficial for companies that want to either launch a broad analytical and data management strategy or consolidate several existing custom data warehouses, says the company. Tata Consultancy Services has recently been designated as a Leader in the Business Analytics BPO Services Market by the global market intelligence firm IDC. Among the attributes that won TCS the position is the company's innovation/r&d, pace and productivity as well as employee management. Essentially, the Indian analytics scene has now matured with pure-play analytics companies along with knowledge process outsourcers and the BPOs that have acquired expertise in analytics. Accenture, icreate, Manthan Systems, Nabler, IBM, Genpact, Activecubes, LatentView Analytics, DeciDyn Systems are just some of the bright sparks in the analytics field that is booming by all accounts. Mu Sigma (backed by Sequoia Capital and General Atlantic) is a pure-play analytics business that is competing with some 15 others in India, including AbsolutData, Fractal Analytics, ZS Associates, LatentView, Opera Solutions and others. Financial services firm, Avendus Capital, predicts in its report that by 2015, the data analytics market in India is expected to reach $1.15 billion to become 21 per cent of the overall Indian KPO market opportunities of $5.6 billion. Demand and supply As demand for competent data scientists increases, so does the global shortfall of talent. By 2018, the USA alone would have a shortage of 1,40,000 to 1,90,000 people with deep analytical skills and 1.5 million managers and analysts who know how to take good decisions using data. India will provide the alternate global hub to fill in the gap. The National Association of Software and Services Companies (Nasscom) expects the big data business to be as much as $1.2 billion ( 743.6 million pounds) within three years, a six-fold increase from current levels or double the growth rate it expects in this space 28 PURCHASE October 2012
worldwide; to $25 billion from $8.25 billion. "It is an industry where, because of cost, skill, language and ability to learn, India stands a very, very strong advantage, Rajeev Baphna, CEO of Bangalore-based data services company Analyttica, told the Guardian. Exponential growth Amit Singh, executive director (technology and outsourcing), Avendus says: Although this market has been around since early 2000, the exponential growth in data generation, significant decrease in data storage cost and increased need of companies to make decisions based on actionable insights, have increased the demand for data analytics services. What India has demonstrated is a capability to fathom the insights that data presents on a global scale providing value for money services. It encapsulates the prowess that the country has acquired over IT and business processes with business analytics capturing space since 2000 and acquiring poise and sophistication over the years honing its talent to deliver quality in this area. Indeed, India has acquired a leadership position in this space outperforming China and competition from such regions as Philippines, east Europe and Latin America to go by current trends. On the cards is India's expanse into a wider arena of activity. Analytics evolution in India Companies such as Hewlett Packard (HP) saw the opportunity (as shown in the accompanying figure) to consolidate various disparate analytics efforts across the organization, say Rohit Tandon and Arnab Chakraborty in an article Analytics in India; Emergence of global analytics centers of excellence. To that end, HP decided to scale up its global analytics capability and capacity in a manner that would be cost-effective and would enable competitive advantage in the market place. What began in small way grew quickly over scales and sophistication with the global corporations striking gold with their captive Indian analytics outfits that delivered solutions across the business spectrum (see graphic) beginning with banks to insurance, retail, telecom, automotive and consulting sectors and further into focused areas within these sectors, including risk management, marketing, operations, logistics, sales and business development. Some of the captives decided to offer analytics as a service to their customers, leading to the rise of third-party service providers, say Tandon and Chakraborty explaining the evolution of the industry. IT services companies and BPO service providers saw analytics as the next level of value addition and diversified into delivering analytics services for their clients. The next stage featured boutique analytics solution providers emerged, with specialization in a specific industry vertical or a functional domain, to deploy deep analytics expertise. Bangalore led the way for other Indian cities, providing the first analytics centers with a skilled talent pool. Gradually, cities, such as Delhi/Gurgaon, Mumbai, Hyderabad, Chennai and Kolkata, emerged as good breeding grounds in India for global companies to set up their analytics centers of excellence. Today, more than 10,000 analytics practitioners work across these cities solving complex business problems and deploying innovative solutions. The point is that India has moved professionally to groom talent for this space with academia focusing on industry needs as such centres of excellence as the Indian Statistical Institute and the Delhi School of Economics developing curriculum and programmes to provide ready to use talent, proficient in such tools 30 PURCHASE October 2012
as SAS/SPSS and various statistical modeling techniques, point out Tandon and Chakraborty. Building up a virtual community of analytics leadership across the various companies that created a robust eco-system to share industry best practices. The presence of multinational users for this talent helped the ramping up on domain context with talent exchange programmes and job rotations between on-shore and offshore employees. Besides, there were pilots to test out capability development in new areas of analytics applications. These efforts have taken the industry places as is evident from the business plans they talk about. Abid Ali, vice president and global head of TCS' BPO business says: "Customers globally seek to be agile in their response to the volatile market conditions and emerging competitive and strategic threats. We help clients effectively leverage the myriad of data produced internally and available externally through our analytics and insights services to make the best decisions with efficiency and speed. "Corporate leaders today need to know more than how to run a data warehouse or build a dashboard. There is demand for people who have that uncanny knack of knowing which metrics are valuable for the organization they serve. C. K. Guruprasad, search consultant for the technology practice at global executive search firm Heidrick & Struggles India in the Times of India, October 8, 2012. There are three significant modes in which analytics is being utilized by organizations. Various organizations, ranging from HDFC and Vodafone to Reliance Retail and ICICI have set up their own in-house analytics team. Secondly, a number of third party IT/ITES service providers have started offering analytics solutions. They continue to provide analytics as a service in a global delivery model, to drive cost-effective deployment in partnership with on-shore stakeholders. The top 10 analytics employers in India are Genpact, TCS, IBM, CTS, HP, Accenture, Infosys, HSBC, Wipro and Dell. Clearly, third party vendors form the bulk of employment in analytics from Indian context. This is confirmed by our estimate that 45 per cent of all professionals work in companies having upwards of 10,000 employees. Bhasker Gupta; Analytics India Industry Study (2012); May 27, 2012. TCS addresses customer need for analytics by leveraging its deep expertise across business intelligence, big data, social media, mobile technology, and combining technology with its world class talent in math and statistics across diverse functional domains like banking, insurance, pharma, healthcare, retail, CPG, supply chain and FP&A. While analytics and insights is branded as KPO and often considered a niche activity, TCS has brought scale and reliability to this market 32 PURCHASE October 2012
for its clients to leverage its Global Network Delivery Model, the company says. Data scientists are thus much sought after people and fetch between 30 per cent and 40 per cent premium in compensation benefits when compared with software engineers, according to Arnab Chakraborty, Director, HP Global Analytics. The profile is impressive with degrees in statistics, computer science, economics and applied mathematics on the one hand and those with business domain experts with strong data analytical skills, and managers who know how to work with large, fast-flowing data, says Chakraborty. Indeed, it is a world driven by real time intelligence and analytics experts ensure that the service user has the best possible information for taking any business or even technical decision. Also it is this input that makes a difference between being globally competitive or not. As Accenture says: More than ever, companies need timely, in-depth insights if they are to remain competitive globally. But those insights can only come from better ways of accessing, organizing and interpreting information in effect, from a whole business approach to analytics. Even with state-of-the-art processors, information appliances and analytics tools, the service does not present a purely technical challenge. The bottom line is smart and accurate thinking. Accenture describes it as the path to smarter and more coordinated decision making faces process-oriented and culture-related We are in throes of a confluence of analytic and information technology. This will be the ground where traditional information technology companies and companies focused on business intelligence will fight the next battle for supremacy. Google, Yahoo and Amazon are showing us the path. Analytics, increasingly tempered by non-human intervened analytic processes, will be a major technological differentiator for businesses that intend to leverage customer behavioral and external data to drive critical business decisions. I am extremely curious to see where the development of semantic web will lead us. While the possibilities are astounding, as more recent technological developments have shown us, it will be the incremental customer and business value provided by new technology that will ultimately decide the fate of these technological innovations. Anand Melige is the CEO of DeciDyn Systems; http://www.analyticsindia.com/inter view.php roadblocks: silos of business information and a widespread shortage of analytical talent. Today's business environment demands that organizations manage data as a strategic corporate resource for all of their business initiatives. It is more than patching in a business intelligence or data warehouse programme on to existing operations. Accenture says that businesses ask: Who needs what information to make the very best decisions? Which processes and governance are required to ensure that such information reaches the right person, in the right format and at the right time, anywhere in the enterprise? Indian analytics has been providing the answers. The job is now to nurture the industry well, price it competitively and ensure that the unique technology-logic union is constantly sustained through professional training and support. 34 PURCHASE October 2012