Data Analytics Outsourcing Market Size, Share, Growth, and Industry Analysis, By Type (Descriptive, Prescriptive, Predictive), By Application (BFSI, Healthcare, IT & Telecom, Media & Entertainment, Energy & Utilities, Education, Hospitality, Manufacturing, Retail), Regional Insights and Forecast to 2031

Updated On: 29 April 2024

DATA ANALYTICS OUTSOURCING MARKET REPORT OVERVIEW

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The global data analytics outsourcing market size was USD 2374.8 million in 2019 and the market is projected to touch USD 9389.5 million by 2026, exhibiting a CAGR of 21.5% during the forecast period.

The data analytics outsourcing market has witnessed remarkable expansion driven by the burgeoning need for sophisticated analytical solutions across a wide array of industries. As businesses grapple with the exponential growth of data from diverse sources like social media, sensors, and customer interactions, outsourcing data analytics functions has emerged as a strategic imperative. By entrusting specialized firms with the task of managing and deciphering complex datasets, companies can harness actionable insights to enhance decision-making processes and drive operational efficiency.

One of the primary drivers behind the surge in data analytics outsourcing is its inherent cost efficiency. Rather than investing heavily in establishing in-house analytics capabilities, organizations can leverage the resources and expertise of external providers at a fraction of the cost. This allows companies to allocate their financial resources more strategically, focusing on core business activities while benefiting from the analytical prowess of outsourcing partners. Additionally, the scalability and flexibility offered by outsourcing arrangements empower companies to adapt their analytics capabilities in response to evolving business needs and market dynamics, ensuring they remain agile and responsive in a rapidly changing environment.

COVID-19 Impact: Market Growth Boosted by Pandemic due to Supply Chain Disruptions

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to market’s growth and demand returning to pre-pandemic levels.

The pandemic accelerated the pace of digital transformation across industries. Companies had to quickly adapt to remote work setups and digital business models, driving increased demand for analytics solutions to optimize virtual operations, enhance customer experiences, and innovate new products and services. As businesses faced sudden shifts in consumer behavior, supply chain disruptions, and economic uncertainties, the need for data-driven insights became more critical than ever. Companies turned to data analytics outsourcing providers to help them make sense of rapidly changing market dynamics, identify emerging trends, and optimize their operations in real time

The sudden onset of the pandemic led to disruptions in the operations of data analytics outsourcing firms. Challenges such as transitioning to remote work, ensuring data security in remote environments, and managing distributed teams posed logistical hurdles and operational inefficiencies. Many businesses faced financial constraints and budget cuts as a result of the economic downturn triggered by the pandemic. This led to reduced spending on non-essential services.

LATEST TRENDS

"Advanced Analytics in Data Analytics to Drive Market Growth"

The trend of moving from basic reporting to predictive and prescriptive analytics is transforming the way businesses use data. This shift requires more than just summarizing past performance; it's about uncovering future trends, predicting outcomes, and recommending specific actions. Advanced analytics demands expertise in areas like AI, machine learning, natural language processing, and deep learning. Building this expertise in-house can be expensive and time-consuming. Outsourcing partners have teams of data scientists and engineers equipped with the latest tools and technologies for advanced analytics. Accessing a pool of experts allows for quicker implementation and analysis of advanced techniques. Avoiding upfront investment in talent, tools, and infrastructure translates to lower costs.

DATA ANALYTICS OUTSOURCING MARKET SEGMENTATION

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• By Type

Based on type the global market can be categorized into descriptive, prescriptive, predictive.

Descriptive: Describes past events or trends using historical data to answer the question "What happened?" Focuses on summarizing and visualizing data to provide insights into patterns and relationships.

Predictive: Forecasts future outcomes or trends based on historical data and statistical algorithms. Uses machine learning and data modeling techniques to identify patterns and make predictions about future events.

Prescriptive: Recommends actions or decisions to optimize outcomes. Combines insights from descriptive and predictive analytics with optimization techniques to generate actionable recommendations for decision-making.

• By Application

Based on application the global market can be categorized into BFSI, healthcare, IT & telecom, media & entertainment, energy & utilities, education, hospitality, manufacturing, retail.

BFSI: BFSI sector encompasses banks, financial institutions, and insurance companies. It handles financial transactions, investments, loans, insurance policies, and risk management.

Healthcare: The healthcare industry focuses on providing medical services, including hospitals, clinics, pharmaceuticals, medical devices, and healthcare technology. It involves patient care, disease management, research, and public health initiatives.

IT & Telecom: The IT & Telecom sector involves information technology services, software development, telecommunications, internet services, and networking. It includes hardware, software, infrastructure, and communication technologies.

Media & Entertainment: The media and entertainment industry includes television, film, music, publishing, gaming, advertising, and digital media platforms. It creates and distributes content for entertainment, news, advertising, and marketing purposes.

Energy & Utilities: Energy & Utilities sector comprises companies involved in electricity generation, oil and gas production, renewable energy, water management, and utilities distribution. It provides essential services for residential, commercial, and industrial users.

Education: The education industry encompasses schools, colleges, universities, online learning platforms, vocational training, and educational technology. It focuses on providing formal and informal education, skill development, and training programs.

Hospitality: The hospitality industry includes hotels, restaurants, resorts, tourism, travel agencies, and event management services. It provides accommodations, dining, leisure, and entertainment experiences for travelers and guests.

Manufacturing: Manufacturing involves the production of goods through industrial processes, including automotive, aerospace, electronics, machinery, and consumer goods. It encompasses product design, fabrication, assembly, and distribution.

Retail: Retail sector comprises businesses involved in selling goods and services to consumers through physical stores, e-commerce platforms, and omnichannel retailing. It includes supermarkets, department stores, specialty retailers, and online marketplaces.

DRIVING FACTORS

"Complexity of Data and Cost Efficiency to Boost the Market"

One of the key driving factors in the global data analytics outsourcing market growth is the complexity of data and cost efficiency in urban areas. The proliferation of data from various sources, including social media, IoT devices, and sensors, has made it increasingly challenging for companies to manage and analyze large volumes of data effectively. Outsourcing data analytics functions allows businesses to leverage specialized expertise and resources to handle complex datasets and derive actionable insights. Outsourcing data analytics offers cost advantages compared to building and maintaining in-house analytics capabilities. Companies can access advanced analytics tools and expertise without the need for significant upfront investments in infrastructure, software, and talent, thereby achieving cost savings and operational efficiencies.

"Specified Expertise and Scalability to Expand the Market"

Another driving factor in the global data analytics outsourcing market is the specified expertise and scalability offered by these products. Data analytics outsourcing firms often possess specialized skills and knowledge in areas such as machine learning, predictive analytics, and data visualization. By partnering with outsourcing providers, companies can tap into this expertise to gain deeper insights from their data and drive informed decision-making. Outsourcing data analytics provides companies with the flexibility to scale their analytics capabilities based on changing business needs and fluctuations in data volumes. Outsourcing partners can quickly ramp up or down resources as required, enabling businesses to adapt to evolving market conditions and seize new opportunities.

RESTRAINING FACTOR

"Data Privacy and Quality Issues to Potentially Impede Market Growth"

One of the key restraining factors in the global data analytics outsourcing market is the data privacy and quality issues of these products. Data privacy regulations, such as GDPR and CCPA, impose strict requirements on the handling and processing of personal data. Concerns about data privacy and security may deter companies from outsourcing analytics functions, especially if they perceive risks associated with sharing sensitive data with external providers. The quality and reliability of analytics outputs depend heavily on the expertise, experience, and capabilities of outsourcing providers. Companies may encounter challenges in assessing the quality and reliability of analytics solutions delivered by external partners, leading to uncertainties about the accuracy, relevance, and usefulness of insights generated.

DATA ANALYTICS OUTSOURCING MARKET REGIONAL INSIGHTS

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The market is primarily segregated into Europe, Latin America, Asia Pacific, North America, and Middle East & Africa.

"North America to Dominate the Market due to Presence of a Large Consumer Base"

North America has emerged as the most dominant region in the global data analytics outsourcing market share due to several factors. North America, particularly the United States, has been a dominant player in the data analytics outsourcing market. The region benefits from a mature IT ecosystem, a strong emphasis on technological innovation, and a large pool of skilled professionals in data science, analytics, and software development. Additionally, many leading global technology companies and analytics service providers are headquartered in North America, contributing to its significant market share in data analytics outsourcing. North America, particularly the United States, is home to several innovation hubs and technology clusters such as Silicon Valley, Seattle, and Boston. These regions foster a culture of entrepreneurship, technological innovation, and collaboration, attracting top talent, investors, and companies focused on data analytics, artificial intelligence, and emerging technologies.

KEY INDUSTRY PLAYERS

"Key Industry Players Shaping the Market through Innovation and Market Expansion"

The data analytics outsourcing market is significantly influenced by key industry players that play a pivotal role in driving market dynamics and shaping client preferences. These key players possess extensive expertise and technological infrastructure, providing clients with access to a diverse range of data analytics solutions and services. Their strong global presence and reputation for excellence have contributed to increased client trust and satisfaction, driving adoption of data analytics outsourcing. Moreover, these industry leaders continually invest in research and development, introducing innovative methodologies, algorithms, and analytics tools, catering to evolving client requirements and industry trends. The collective efforts of these major players significantly impact the competitive landscape and future trajectory of the data analytics outsourcing market.

List of Market Players Profiled

• Accenture (Ireland)
• Capgemini (France)
• Mu Sigma (U.S.)
• RSA Security (U.S.)
• Fractal Analytics (U.S.)
• Genpact (U.S.)
• IBM Corporation (U.S.)

INDUSTRIAL DEVELOPMENT

December 2023: Wipro acquires US-based data analytics consultancy, Capco, expanding their capabilities in the financial services sector.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.