BI continues to grow in demand in 2012 and the foreseeable future. The demand for BI/Analytics has driven the need for company investment in "Big Data" and trying to outdue competitors by exploiting advantages through the use of data patterns.

1. Business Intelligence Outsourcing
Emerging Trend Report
Simplesoft Solutions, Inc.
By Paul Hansford, MS
10/2012

2. OVERVIEW
Analytics has been defined as ―the extensive use of data, statistical
and quantitative analysis, explanatory and predictive models, and
fact-based management to drive decisions and actions‖ (Davenport
and Harris, Competing on Analytics, 2007)
Volume of Digital Data
Every day, 15 petabytes of new information are
being generated. This is 8x more than the
information in all U.S. libraries.
Velocity of Decision Making
By 2010, the codified information base of the 70% of executives believe that poor decision
world is expected to double every 11 hours. making has had a degrading impact on their
companies‘ performance
Only 9% of CFOs believe they excel at
interpreting data for senior management

3. WHERE DID BI COME FROM?
The industry that has claimed responsibility for helping organizations
get real value from information goes by the name “business
intelligence.”
This term was originally coined by Hans Peter Luhn, an IBM researcher,
way back in 1958. Luhn defined business intelligence as “the ability to
apprehend the interrelationships of presented facts in such a way as to
guide action towards a desired goal.”
The term didn’t catch on, however, until sometime after Howard
Dresner, best known for his work at Gartner, used it again to breathe
new life into to the data warehousing industry. Dresner defined the term
as “concepts and methods to improve business decision making using
fact-based support systems.”
Source:

4. ―Drive the business‖
Analytics Hive/Pig
Big Data
―Improve the business‖
Text analytics
Performance Cloud BI
Management Predictive analytics
Mobile BI
―Use the data‖ Visual discovery
Business Operational BI
Intelligence Data integration suites
―Get the data‖ Packaged analytic
applications
Data Data virtualization
Warehousing Dashboards and scorecards
Business intelligence suites
Web query/reporting
On-line analytical processing (OLAP)
Desktop
query/reporting
Extract, transform, load
tools
1990swarehouses
Data 2000s 2010 2015
Source: BI Leadership Forum (www.bileadership.com).

5. WAVES OF BI
Statisticians
= Reporting
High
= Analytics
Execs, Mgrs,
Workers
Business Value
“What will
happen?”
Users
Business
analysts
“What’s
Prediction
happening?”
Monitoring
“Why did it
All users
happen?”
Analysis
“What
happened?”
Reporting
Static & Interactive Query, Excel, Dashboards, Statistics, data
Low Reports OLAP, Viz analysis Scorecards mining, optimization
Tools
1980s 1990s 2000s 2010s
Source: BI Leadership Forum (www.bileadership.com).

6. OVERVIEW OF THE DATA
PROBLEM
 Estimated Global Data Volume:
 2011: 1.8 ZB
 2015: 7.9 ZB
 The world's information doubles every two years
 Over the next 10 years:
 The number of servers worldwide will grow by 10x
 Amount of information managed by enterprise data
centers will grow by 50x
 Number of “files” enterprise data center handle will
grow by 75x
Source: http://www.emc.com/leadership/programs/digital-universe.htm, which was based on the 2011 IDC Digital Universe Study

7. OVERVIEW OF THE BUSINESS
PROBLEM
Analytics has evolved from business initiative to business imperative
Analytically sophisticated companies outperform their competition
Respondents who say analytics Organizations achieving
creates a competitive advantage a competitive advantage
with analytics are
2010 37% 57%
increase 2.2x
more likely to
substantially outperform
2011 58% their industry peers
Ratio of respondents who indicated analytics creates a competitive
advantage to those who indicated it did not and the likelihood they
also indicated their organizations was “substantially outperforming
their competitive peers.” The ratio was 2.0 to 1 in 2010.
Source: The New Intelligent Enterprise, a joint MIT Sloan Management Review and IBM Institute of Business Value analytics research
partnership. Copyright © Massachusetts Institute of Technology 2011

8. OVERVIEW OF THE PEOPLE
PROBLEM
Data volume is growing exponentially without a doubt…
In the past, the most difficult problem for businesses was how to
store all the data.
The challenge now is no longer to store large amounts of
information, but to understand and analyze this data, make a
decision, and take action.
This leads to the people problem, who can analyze the data and
crunch the numbers and make sense of it?

9. PEOPLE SKILL
SHORTAGE
There is going to be significant shortage of analytical talent. Indeed,
the
situation might get worse before it improves, due partly to the
emergence of ―big data.‖ For example, a report released last May by
the McKinsey Global Institute estimated that by 2018 in the U.S.
alone, there could be an unmet need for 140,000 to 190,000
workers with deep analytical capabilities for analyzing big
data.
To boot, the creation of business analytics tools takes more than just
traditional software development skills, it also calls for high-end
math capabilities given the emphasis on data mining, statistical
sampling and forecasting. India produces about 690,000 math and
sciences graduates each year, according to a study released Friday.
The comparable number for the U.S. is 420,000.
Source: http://www.informationweek.com/news/global-
cio/outsourcing/229204206
http://www.mckinsey.com/Insights/MGI/Research/Technology_and_Innovation/Big

10. TYPES OF ANALTICS
OUTSOURCING
Knowledge Process Outsourcing (KPO) is the outsourcing of high-end
business functions in an organization. These functions include both core
and non-core activities. Analytics Outsourcing (AO) is a type of KPO.1
Analytics outsourcing, which deals with the application of computing
resources, statistics and operational research to solve business and
industry problems, is fast becoming the most sought after outsourcing
vertical.2
 Customer and Marketing Analytics
 Risk Management Analytics
 Operations and Data Analytics
 Finance and Investment Analytics
 Supply Chain Analysis3
 Pharmaceutical analysis
Source: 1. http://www.bpowatchindia.com/KPODemystified.html
2. http://www.flatworldsolutions.com/articles/growth-of-analytics-outsourcing.php
3. http://outsourceportfolio.com/outsourcing-data-analytics/

11. WHY BUSINESS ANALYTICS MATTER
THE NEED FOR ANALYTICS IS PERVASIVE ACROSS BUSINESS AND
INDUSTRY
The healthcare industry spends $250 - $300 billion on healthcare
fraud, per year. In the US alone this is a $650 million per day
problem.1
One rogue trader at a leading global financial services firm created
$2 billion worth of losses, almost bankrupting the company.
$93 billion in total sales is missed each year because retailers
don‘t have the right products in stock to meet customer demand.
5 billion global subscribers in the telco industry are demanding
unique and personalized offerings that match their individual
lifestyles.2
Source: 1.Harvard, Harvard Business Review, April 2010.
2,IBM Institute for Business Value, The Global CFO Study, 2010.

12. EXAMPLE OF OUTSOURCING
Source: http://www.sganalytics.com/SG-Analytics/data-processing-and-
analytics-research-is-divided-into-two-main-areas-new.html

13. ANALYTICS OUTSOURCING
TRENDS
Viral Thakker, executive director, performance and technology services KPMG
pointed out some of the emerging/growth areas in analytics:
 Customer analytics for the energy and utilities sector
 Fraud analytics in retail banking
 Cyber-analytics to detect cyber crime and terrorism
 Learning analytics to assess academic performance
Other trends that could emerge are:
 Cloud-based BI tools could see proliferation
 Social network data mining for customer analytics
 ‗Big data analytics‘— Big data refers to the tools, processes and procedures
allowing an organization to create, manipulate, and manage very large data
sets and storage facilities.
Source: http://www.globalservicesmedia.com/BPO/Knowledge-process-Outsourcing/Outlook-
2012-What-do-the-Cards-Say-About-Analytics-Outsourcing/23/12/11734/GS1201033610362_4

14. MAJOR OUTSOURCE
PROVIDERS
There are several players in the AO marketplace, but there few
analysts that are ranking them or are premium priced reports. This
may be because the AO trend is early in adoption and global 1000
companies are the main clients.
The Top Analytics suppliers are:
Top Providers
GenPact* Fractal Analytics
WNS Accenture*
Capgemini* Cognizant
EXL Services HP
IBM Infosys
TATA Consultancy Services (TCS)*
• Market Leaders
The details can be bought for $15,000.00
Source: IDC MarketScape: Worldwide Business Analytics BPO Services 2012 Vendor

15. RISKS & KEY ISSUES IN THE KPO
SECTOR
 Skills Acquisition and Retention
 For India, it will be a major challenge with high annual churn rates and wage
inflation playing dampener.
 IP Management & Data Security
 Outsourcing high-end functions to an offshore location involves the exchange
of confidential information, especially in segments such as financial services
and biotech.
 Training and Development
 Be it legal processes, pharma outsourcing or financial services outsourcing,
any knowledge process requires familiarity with the concerned domain as it
exists in the client country.
Source: http://www.bpowatchindia.com/KPODemystified.html

16. RISKS & RECOMMENDATIONS
FOCUS ON: 1
 Reduction in costs
 Ability to scale-up and scale down resource
 Making IT provision a contractual relationship
 Access to skills, ally with them and bring them in-house2
 Focus on core competencies
BE AWARE OF:
 Privacy risks are a concern
 Intellectual Property rights are a concern
 Increasing costs are a concern
 Domain specific knowledge
 Confidentiality
This is a trend that is not going away but will continue to
grow.
Source: http://peterjamesthomas.com/2009/03/14/is-outsourcing-business-intelligence-a-good-
idea/

17. ASSESSMENT
Niche analysts project that Big Data/ business analytics will be a 50
billion dollar market in the next 5 years, therefore outsourcing will
increase because of skill shortages.
Source: Wikibon 2012 Big Data Market Size and Vendor Revenues report

18. LESSONS LEARNED
 Analytics outsourcing is a niche market of the KPO/BPO category
 It is a source of competitive advantage
 Combining business problems, people, technology, and science skills
 Solving important and hard problems to help decision making
 It is growing rapidly as outsourcing activities
 BI is a form of analytics i.e. deriving value from data
 Children need to take math seriously. It is an important current
skill!

19. REFERENCES
1. F. Sen and M. Shiel, Human Systems management, 2006, From business process outsourcing
(BPO) to knowledge process outsourcing (KPO): Some issues, IOS Press, 145–155
2. Susan M. Mudambi and Stephen Tallman, Journal of Management Studies, December 2010,
Make, Buy or Ally? Theoretical Perspectives on Knowledge Process Outsourcing through
Alliances.
3. Davenport, T. H., & Harris, J. G. (2007). Competing on Analytics. Boston: Harvard Business
School Press.
4. David Kiron, Rebecca Shockley, Nina Kruschwitz, Glenn Finch and Dr. Michael Haydock ,
Analytics: The Widening Divide: How companies are achieving competitive advantage through
analytics, November 7, 2011, MIT Sloan Management Review