Email this Article Print This Article Like their counterparts at larger companies, managers at small and medium-sized businesses SMBs are waking up to the fact that data-driven decision-making is crucial for growth and success. However, many SMBs lack the means to employ highly skilled data analytics professionals to collect, investigate and analyze the dizzying amount of data that is available to businesses these days.
How Banks Can Lead the Shift to AI-First We found little evidence of conflicts about intellectual property ownership that we thought could be a source of tension between analytically challenged companies and offshore BPOs. Analytics BPOs that have developed successful applications with clients have an incentive to market their knowledge and experience to other clients — even direct competitors; this is particularly true when salespeople receive commissions for booking new business.
However, on issues of intellectual property ownership, managers of analytically challenged companies said they lacked knowledge dealing with this area; managers at both analytically challenged companies that we studied indicated openness to sharing intellectual property with analytics vendors.
How Analytically Sophisticated Companies View Outsourcing In contrast to analytically challenged companies, which are usually happy to outsource their analytics requirements, analytically superior companies wanted to expand their internal analytic capabilities.
For the most part, they used offshore BPOs to perform low-level analytics for example, reporting on automated tasks such as keeping track of maintenance programs and did not contemplate outsourcing all of their analytics to an offshore provider. As one manager we interviewed explained: We have to develop our own intellectual property and capabilities in analytics because our competitors are doing the same.
In this business, those with the best analytical capabilities can capture market share and run their business more efficiently. We cannot outsource this to our offshore analytic partners due to the fact that this component is critical to our competitiveness. However, having our offshore analytic partners helps us with the generic analytics and reporting frees our internal analysts to be able to focus on the more advanced techniques, which will allow us to stay ahead of the competition.
Many analytics-oriented BPOs, including those we studied, were spun off from large corporations. As such, they combined features from the original corporate culture with more innovative business practices.
For example, in an effort to serve clients in a more integrated way, one offshore analytics company teamed local analysts with global representatives. A manager at an analytically superior company told us that he and other managers have been able to identify best practices in the course of working with an offshore BPO that they can then apply more broadly throughout the organization.
This company was attempting to become more global by integrating its international operations into two new business units made up of both U. Some of the BPO managers felt that their knowledge was not being fully utilized: If only clients had more advanced internal capabilities, they said, they could deliver more sophisticated services.
Apparently, however, the BPO analytics managers were overlooking the possibility that their clients might consider their analytics to be intellectual property they did not want to share with outside businesses.
Indeed, there appears to be a potentially serious point of conflict between companies and analytics BPOs over knowledge transferability. Analytics BPOs see their experience working in different industries as an advantage that deepens the value of their knowledge.
One analytics BPO manager noted: If we suggest this to our customers, they usually become threatened, and this can put the overall relationship at risk. Offshore analytics BPO managers agreed that the services they provide to their customers could be enhanced through more open relationships between their organizations and those of clients.
Typically, companies treat analytics BPOs as vendors and analytics engagements as stand-alone projects rather than as components of an overall strategy.
As one analytics BPO manager explained: Even though we do have better analytics than our competitors, it all usually comes down to who can offer the generic service at the lowest cost. This commoditization of offshore [analytics BPOs] leaves much white space in terms of how we can work together strategically with our customers to help them build excellent capabilities in analytics.
Specifically, we asked how offshore analytics BPOs might be able to improve the business of the analytically advanced multinationals if given the opportunity to have closer, more strategic relationships. Most of the time, we end up really training the offshore analysts ourselves.
Indeed, multinational customers may have made up their minds about whether the offshore analytics BPOs are able to contribute at a higher level — in effect, creating a situation where the perception is the reality. In addition, there are concerns about potential merger and acquisition activity in the offshore analytics BPO industry.
Creating Successful Analytics Partnerships With analytically challenged companies, we found that companies that perceive the need to grow their analytic capabilities can gain advantages by using an offshore analytics BPO.
By choosing the right analytics BPO to match their culture and business requirements, such companies can develop competitive and unique analytic capabilities that can lead to competitive advantage.IBM experts can help you solve business problems using the latest data science and analytics tools that help you get more answers out of your data.
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