I D C M a r k e t S c a p e : W o r l d w i d e B u s i n e s s A n a l y t i c s B P O S e r v i c e s V e n d o r A n a l y s i s

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1 Global Headquarters: 5 Speen Street Framingham, MA USA P F C O M P E T I T I V E A N A L Y S I S I D C M a r k e t S c a p e : W o r l d w i d e B u s i n e s s A n a l y t i c s B P O S e r v i c e s V e n d o r A n a l y s i s Mukesh Dialani I N T H I S E X C E R P T The content for this paper is excerpted from the IDC Competitive Analysis Report, IDC MarketScape: Worldwide Business Analytics BPO Services 2012 Vendor Analysis, by Mukesh Dialani, (Doc # ). All or parts of the following sections are included in this Excerpt: IDC Opinion, In This Study, Situation Overview, Future Outlook, and Essential Guidance. Figures 1 and 2 are also included. I D C O P I N I O N This IDC study represents a vendor assessment of the business analytics (BA) services provided by business process outsourcers (BPOs) as of 2012 through the IDC MarketScape model at a worldwide level. This assessment discusses both quantitative and qualitative characteristics that define success in the business analytics BPO services market and covers a variety of vendors providing these services. The evaluation is based on a comprehensive and rigorous framework that assesses each vendor based on the evaluation criteria as defined by IDC and in comparison to their competitors that are part of this study. The framework highlights the factors expected to be the most influential for success in the market in both the short term and the long term. Key findings and IDC opinion include: Experience in delivering BPO services matters. The scale and domain expertise of a provider's BPO services offering significantly influences the success of its business analytics services practice. The more experience and expertise BPO providers have delivering business processes within specific industries, the more success they will see in delivering business analytics services. Matching of customer needs with vendor capabilities. Cost management, improving operational efficiency, creating a more effective business process, and complying with new or existing regulations are key business priorities for firms that utilize analytics to run their businesses. Worldwide firms in general offer a strong suite of business analytics outsourcing offerings to cater to client's needs. Value proposition. From a long-term perspective, BPO services firms have developed solid cost-benefit analysis to facilitate an increased adoption of their BA BPO services portfolio by clients. In addition, firms in general have created solid strategies to improve current R&D processes and initiatives to meet the market demand for BA solutions in the near future. Filing Information: May 2012, IDC #234937, Volume: 1 Worldwide BPO Services: Competitive Analysis

2 Life cycle of business analytics services. Customers will prefer consuming the full life cycle of business analytics services, from assessment to process outsourcing, when they utilize external resources for their analytics needs. Those vendors that possess the capability to deliver across the value chain of business analytics services will stand to gain a larger market share. I N T H I S S T U D Y This IDC study represents a vendor assessment of business analytics services provided by pure-play BPO providers and IT services companies that provide business analytics services under the umbrella of BPO services, through the IDC MarketScape model at a worldwide level. This assessment discusses both quantitative and qualitative characteristics that define success in this market. This IDC MarketScape covers a variety of vendors participating in the business analytics BPO services market. The evaluation is based on a comprehensive and rigorous framework that assesses each vendor relative to the criteria and to one another. The framework highlights the factors expected to be the most influential for success in the market in both the short term and the long term. This study comprises two key sections. The first part is a definition or a description of what characteristics IDC analysts believe make a successful strategy for any business analytics outsourcing services business. These characteristics are based on findings from buyer and vendor surveys and key analysts' observations of industry best practices. The second section is a visual aggregation of multiple firms into a single bubble-chart format. This display concisely illustrates the observed and quantified scores of the business analytics outsourcing services providers. The document concludes with IDC's essential guidance to buyers of business analytics outsourcing services and to vendors to support continued growth and improvement of these vendor's offerings. M e t h o d o l o g y IDC MarketScape criteria selection, weightings, and vendor scores represent wellresearched IDC judgment about the market and selected vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants, and end users. Market weightings are based on user interviews, buyer surveys, and the input of a review board of IDC experts in each market. IDC analysts base individual vendor scores and, ultimately, vendor positions on the IDC MarketScape, detailed surveys and interviews with the vendors, publicly available information, and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor's characteristics, behavior, and capability. # IDC

3 S I T U A T I O N O V E R V I E W B u s i n e s s A n a l y t i c s S e r v i c e s V a l u e C h a i n IDC believes the business analytics services value chain is made up of the following three areas: information management, analysis, and business inference. At the same time, a certain set of processes and technologies need to be delivered across these three areas. IDC believes the coupling of these processes and technologies with the aforementioned areas defines the complete value chain of business analytics services (see Figure 1). F I G U R E 1 B u s i n e s s A n a l y t i c s S e r v i c e s V a l u e C h a i n Source: IDC, 2012 This MarketScape covers the business analytics services provided under the umbrella of business process outsourcing services. This MarketScape should be read in conjunction with IDC MarketScape: Worldwide Business Analytics IT Consulting and Systems Integration Services 2012 Vendor Analysis (IDC #234938, May 2012), which covers the consulting and systems integration aspect of business analytics services IDC #

4 Traditionally, a business intelligence (BI) tool was installed by the BI tool vendor, outsourcing systems integrators (SIs), or by the in-house IT team of the customer. The ultimate intent was to gather data and market trends related to the business. Often, customers managed this system on their own, since it was assumed that they knew their business best. A typical implementation gathered various business metrics data and used it for internal decision-making processes. Customers, however, viewed this information in context to their own business ecosystem, and the resulting analysis and insight did not encompass the regional or global domain-specific ecosystem. Additionally, this data was being mined out of processes that were not efficient. BPO services vendors provide business value to their clients by implementing and running various business processes. They are now able to extend this value by mining data from these refined and improved business processes and subsequently partnering and consulting with their client to improve their customer's business performance. As an extension of the BPO services, analytics services have been provided by BPO services vendors for some time now. However, it was only during the initial years of the current global economic downturn that the values of these services began to get their due recognition and customers started to realize the full potential of these services. A typical BPO analytics function will use the data collected from real-life business transactions and statistically process the same to reveal multiple metrics that in the case of, say, retail indicate consumer behavior patterns and enable businesses to improve their decision-making process by focusing on emerging trends and designing and creating relevant products/services for their end customers. F U T U R E O U T L O O K I D C M a r k e t S c a p e B u s i n e s s A n a l y t i c s B P O S e r v i c e s V e n d o r A s s e s s m e n t The IDC vendor assessment for the business analytics BPO services market represents IDC's opinion on vendors that are well positioned today through current capabilities and those that are best positioned to gain market share over the next few years. For the purposes of discussion, IDC divides potential key strategy measures for success into two primary categories: current capabilities and future strategy. Positioning in the upper right of the grid indicates that vendors have a good strategic combination of capabilities to continue to be successful in today's ecosystem and have the right set of strategic initiatives to maintain and grow their capabilities to be considered as a key player in the ecosystem. Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how well it is aligned to customer needs. The capabilities category focuses on the capabilities of the company and services today. In this category, IDC analysts look at how well a vendor is building, pricing, positioning, and/or delivering capabilities that enable it to execute its chosen strategy in the market. On the y-axis, a position toward the top (north of center) indicates a strong set of differentiated capabilities to be successful in today's ecosystem. 2 # IDC

5 Positioning on the x-axis or strategy axis indicates how well the vendor's future strategy aligns with what customers will require in three to five years. The strategy category focuses on high-level strategic decisions and underlying assumptions about road maps for offerings, customer segmentation, business, and go-to-market plans for the future, which in this case is defined as the next three to five years. In this category, analysts look at whether or not a supplier's strategies in various areas are aligned with customer requirements in terms of spending, procurement, and delivery over a defined future time period. On the x-axis, a position toward the right (east of center) indicates a strategy that is not only well aligned with customer requirements but agile and differentiated from the pack. Figure 2 shows each vendor's position in the vendor assessment chart. Vendor market share is represented by the size of the circles. The vendor year-over-year growth rate relative to the given market is indicated by a plus (+), neutral (), or minus (-) icon next to the vendor name. Spatial position is also represented on the x and y axes IDC #

6 F I G U R E 2 I D C M a r k e t S c a p e B u s i n e s s A n a l y t i c s B P O S e r v i c e s V e n d o r A s s e s s m e n t Source: IDC, 2012 V e n d o r P r o f i l e s This section briefly explains the key observations that resulted in a vendor's position in the vendor assessment graph. Genpact According to IDC analysis and buyer perception, Genpact is an IDC MarketScape Leader worldwide. Genpact's business analytics business unit has over 5,000 analysts, providing a broad spectrum of analytical services ranging from research and social media monitoring and analysis to data management and reporting through complex optimization, forecasting, and predictive modeling. These services help Genpact's clients to adequately leverage their data assets and add intelligence across their key P&L drivers such as increasing revenue, improving marketing ROI, reducing cost, ensuring supply chain optimization, managing risk and capital, and ensuring 4 # IDC

7 regulatory compliance. The industries serviced include banking and financial services, insurance, retail, consumer products, manufacturing, energy, transportation, automotive, healthcare, pharmaceuticals, and business services. Genpact has made significant investments in its Smart Decisions Lab that performs R&D to ensure that clients get relevant analytical solutions. Genpact also acquired related businesses in the past couple of years that broadened the company's analytics offerings, and it continues to look for acquisitions that bring boutique capability that are both concurrent and complementary to its current capabilities. Busine ss An alytics BPO Services Areas of Strength Current functionality/offering delivered Current pricing model options and alignment Future portfolio strategy Busine ss An alytics BPO Services Areas of Impr o vement Current growth strategy execution Future sales/distribution strategy Future growth strategy E S S E N T I A L G U I D A N C E The key finding of this research is the overall strength of the capabilities of the majority of the vendors, but at the same time, certain areas require improvements. These improvements would stimulate a vendor's position in the business analytics BPO services market and would eventually help attract buyers. The sections that follow highlight both strong and weaker aspects of vendors to provide guidance to both the suppliers and the buyers within the business analytics BPO services market. A d v i c e f o r B u y e r s Evaluate vendors for your needs. The breadth and depth of business analytics services offered is strong for the majority of BPO providers in this analysis. Make sure you understand how these players provide unique value to you in terms of overall business analytics value chain, industry-specific competency, quality of manpower, and so forth. Look for offering differentiation. The breadth and depth of services offered is strong for the majority of business analytics services vendors in this analysis. Make sure you understand where these players are truly differentiated and take advantage of their expertise, industry based or otherwise. Use analytics for competitive edge. Though a vast majority of the businesses are consuming business analytics primarily to control cost and operational efficiency, the benefits of business analytics are far beyond just "finding the business metrics" initiatives. Leading businesses truly understand the importance 2012 IDC #

8 of analytics to achieve a competitive edge in their markets and utilize business analytics to make their businesses more agile to cater to changing customer needs, to drive innovation in the business processes, and to be an integral part of the growth engine. Create a culture of analytics. Business analytics is not just about getting hold of the right data. It's also about creating the right processes to handle and make use of the valuable enterprisewide data as well as aligning the mindset of the company's employees to embrace the importance of using information-based decision making. To be successful in utilizing the true benefits of a business analytics undertaking, it is vital to define and govern all three aspects of business, that is, only by defining and governing information, processes, and people and analytics can a company create a successful culture of analytics. A d v i c e f o r B P O V e n d o r s P r o v i d i n g B u s i n e s s A n a l y t i c s S e r v i c e s Invest in industry-specific competency. Vendors should continue to invest in building significant business analytics competency across multiple domains. This is possible if the vendor has delivered many long-term BPO projects across specific industries and in the process gained valuable experience and knowledge of best business practices for a specific industry. This knowledge can be applied to improving the business metrics obtained from running a BA engine for the clients' operations. Create a business-analytics-as-a-service offering. Those vendors that have invested in building infrastructure and solutions to leverage their cloud infrastructure and deliver analytics as a service to enable quick deployment and realize benefits quickly as well as reduce the cost and risk associated with such initiatives will find themselves being called to the discussion table more often. Those vendors that do not leverage technology to deliver these services risk being left behind in the near future even though they may have been significant. Pick one strategy for growth. Vendors should focus on either of the following: Build the complete stack. This is easier said than done and requires a lot of investment and resources. Create alliances/partnerships and invest in building an ecosystem. This strategy is a lot easier, but the flip side is that most vendors will emulate it. Vendors should create niche/unique domain-specific offerings that can be applied across multiple industries that will give them the edge. Focus on predictive analytics. Employ advanced algorithms and models that will enable your clients to predict business results/performance in areas such as fraud management, compliance, churn management, and marketing. Build a best business practice delivery model. Based on conversations with vendors and their customers, IDC recommends that vendors should build a hybrid delivery model that strategically leverages both the onshore model and the offshore model for business analytics services. The offshore resources will be responsible 6 # IDC

9 for managing the earlier part of the value chain. This includes activities such as consolidating data, report generation, data analysis, data interpretation and predicting business performance based on business scenarios. The onshore team can take all of this data and compare it with their own best industry-specific standard metrics and/or with third-party data to identify if the customer is doing well or needs improvement, in which case they can identify and recommend specific action plans to change the business process or any other attribute that impacts the metric thereby improving the client's business performance. Additionally, certain parts of the business analytics value chain can leverage technology to provide realtime automated solutions that can be hosted as well. Build an offering around mobility and business analytics. In the current global business scenario, real-time access to data and business insight is very crucial for customers. Building a mobile-enabled business analytics solutions offering will enable BPO providers to differentiate themselves. In a recent demand-side survey (n = 350), approximately 27% of customers indicated that their business analytics processes were mobile enabled, and another 48% indicated their plan to mobile enable their business analytics applications in the next months. S y n o p s i s This IDC study uses the IDC MarketScape model to provide an assessment of a number of providers participating in the business analytics BPO services market. The IDC MarketScape is an evaluation based on a comprehensive framework and a set of parameters that assesses providers relative to one another and to those factors expected to be most conducive to success in a given market during both the short term and the long term. "BPO vendors find themselves in a favorable position to assist their clients' transformation efforts as enterprises face new sources of competition in this global environment and try to stay competitive by keeping a close check on various business performance metrics," said Mukesh Dialani, research manager, Engineering and BPO Services. "BPO providers that build competency around industry-specific BPO and analytics outsourcing as well as exhibit the capability to assist clients with business consulting services will gain a bigger portion of this business." 2012 IDC #

10 C o p y r i g h t N o t i c e This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit Please contact the IDC Hotline at , ext (or ) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2012 IDC. Reproduction is forbidden unless authorized. All rights reserved. 8 # IDC