Description
According to the Market Statsville Group (MSG), the global data analytics outsourcing market size was valued at USD 7.7 billion in 2021 and is projected to reach USD 107.9 billion by 2030, registering a CAGR of 34.1% from 2022 to 2030. Organizations hire data analytics outsourcing service providers to perform analytics on the data they provide to the outsourcing firm. According to industry research, service demand is on the rise. Most businesses are now aware of the benefits and financial benefits of outsourcing data analytics services. Companies may outsource data analytics due to a lack of skilled human resources and expertise. The benefits of data analytics outsourcing encourage businesses to gain market share and customer insights, as well as make strategic business decisions based on data analytics reports.
One of the primary factors driving the market growth is the growing amount of digital data combined with the complexity of handling such a massive amount of data. However, privacy and data security concerns are the main roadblocks to market expansion. Additionally, the market is expected to benefit from increased attention to handling data from social media platforms and the rapid scalability of outsourcing data analytics models.
Global Data Analytics Outsourcing Market Definition
Data analytics outsourcing is a partnership model in which a corporation entrusts its data to a service provider in exchange for insightful reporting. Simultaneously, the provider is responsible for all other aspects of the service, including infrastructure setup and support, data administration, and data analysis.
COVID–19 Impact on the Global Data Analytics Outsourcing Market
The COVID-19 pandemic positively impacts the data analytics outsourcing market, owing to significant change toward the adoption of digital platforms and work-from-home policies. While the new normal post the aftermath of the COVID-19 pandemic is still unclear, it is obvious that digitization will accelerate. People’s tendency to use less cash is expected to continue. Contactless payments can become a requirement rather than a choice.
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Moreover, as per the article published by the IT services and custom software Development Company in 2021, Scand Ltd.’s IT spending was on a downfall even before the pandemic’s start with a 7.3% decline from 2019 to 2020. A decline of more than 6.8% was witnessed in the global IT outsourcing and services spending alone. The pandemic played a vital role in promoting the adoption of digital infrastructure in many countries across the globe, as people had to rely on digital mediums to ensure connectivity with others in the community. This made businesses in desperate need to scale up their digital offerings and tools, causing a boom in outsourcing IT services. By the end of 2021, IT outsourcing services was expected to grow by 5.5%, with an overall increase of 4.3% of the global IT spending.
Global Data Analytics Outsourcing Market Dynamics
Drivers: Complexity of consumer data
Companies such as FedEx and Amazon have been using data analytics for over a decade. Amazon has developed algorithms focused on the regular needs of the consumers with the help of in-house data scientists and analysts. They have access to a large amount of data on their customers, which aids in creating a profile of their customers. The algorithm takes all of that data and targets them with specific items, increasing the likelihood of a purchase. Smaller industries may not have access to such resources. They may need to employ third-party solutions to help them with their data analytical needs, as in-house solutions are expensive.
Moreover, third-party solutions offer a wealth of expertise from a variety of sectors and related businesses/projects, which can contribute positively toward the goals and needs of the company. Therefore, data analytics outsourcing solutions are employed by businesses to gain the benefit from experienced experts at a fraction of the cost, thereby leading to market growth.
Restraints: Data security and privacy issues
Concerns for the privacy and security of private consumer data have been rising due to increased cyber-attacks and threats across the globe. To ensure the safety of the public’s sensitive data being collected and harvested by firms, governments and other concerned regulatory bodies have introduced many compliances and regulatory policies to safeguard this data and ensure their proper handling.
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Policies, such as the General Data Protection Regulation, introduced by the European Union, enforce seven principles of lawfulness, fairness, and transparency; purpose limitation; data minimization; accuracy; storage limitation; integrity and confidentiality (security); and accountability. GDPR aims for appropriate personal data processing. Processing involves collecting, arranging, structuring, storing, changing, informing, utilizing, interacting, merging, limiting, removing, or destroying personal data. Compliance policies, such as GDPR and other similar regulations, urge businesses to have second thoughts on adopting or involving a third-party data analytics vendor and exposing a data breach risk.
Scope of the Global Data Analytics Outsourcing Market
The study categorizes the data analytics outsourcing market based on type, application, end-users, and region.
By Type Outlook (Revenue, USD Billion, 2017–2030)
- Descriptive
- Predictive
- Prescriptive
By Application Outlook (Revenue, USD Billion, 2017–2030)
- Sales Analytics
- Marketing Analytics
- Risk & Financial Analytics
- Supply Chain Analytics
- Others
By Industry Vertical Outlook (Revenue, USD Billion, 2017–2030)
- BFSI
- Telecom
- Retail
- Healthcare
- Media & Entertainment
- Others
By Region Outlook (Revenue, USD Billion, 2017–2030)
- North America
- US
- Canada
- Mexico
- Europe
- Germany
- Italy
- France
- UK
- Spain
- Poland
- Russia
- The Netherlands
- Norway
- Czech Republic
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- South Korea
- Indonesia
- Malaysia
- Thailand
- Singapore
- Australia & New Zealand
- Rest of Asia Pacific
- South America
- Brazil
- Argentina
- Colombia
- Rest of South America
- The Middle East & Africa
- Saudi Arabia
- UAE
- South Africa
- Northern Africa
- Rest of MEA
The predictive segment is projected for the largest market share, by type
On the basis of type, the data analytics outsourcing market is segmented into descriptive, predictive, and prescriptive analytics. The predictive segment was the highest contributor to the market, with a share of 48.5% in the data analytics outsourcing market. Predictive analysis is set to revolutionize the way modern-day businesses work. Understanding customer needs well in advance and being prepared accordingly will benefit organizations in providing value-added services to end-users. The prediction will enable businesses to be prepared in advance with customers’ essential needs.
Further, Industry 4.0 is expanding at an unprecedented rate. With the expansion of the fourth industrial phase, the global predictive analytics market is also expected to grow substantially in the projected term from 2022 to 2030. In addition, increasing industrialization and demand for automation in almost every business is also projected to boost the market growth. With technological developments in business areas, such as manufacturing and logistics, the demand for predictive analytics solutions is anticipated to grow rapidly in the coming years. As a result, the growth of the global predictive segment is anticipated to boost.
Asia Pacific accounts for the highest CAGR during the forecast period
Based on the regions, the global data analytics outsourcing market has been segmented across North America, Asia–Pacific, Europe, South America, and the Middle East & Africa. Worldwide, Asia Pacific is projected to hold the highest CAGR of 37.2% in the global data analytics outsourcing market during the forecast period. Major countries considered in the Asia-Pacific region are China, Japan, India, South Korea, Australia, and the rest of Asia Pacific. The Asia-Pacific region is likely to witness rapid growth due to increasing digitalization and e-commerce services for various business purposes in countries such as China and India. In addition, the availability of a low labor costs, labor force, and developing IT infrastructure are other factors that are estimated to support the growth of the target market in the Asia-Pacific region.
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India has been a leader in revenue generation in the data analytics outsourcing market, generating $2 billion from TCS analytics services. Such companies are investing heavily in these domains, thereby increasing their offering of services, such as Analytics India Magazine and Praxis Business School, according to the 2019 study. In addition, in India, about 47% of analytics revenue grew from exports to the U.S. while the United Kingdom, in second place, recorded 9.6% of the total $27 billion generations of revenue from outsourcing.
Key Market Players in the Global Data Analytics Outsourcing Market
Most companies in the market are focused on expanding operations across regions, augmenting their capabilities, and building strong partner relations. Major players in the global market are:
- Fractal Analytics Ltd
- ZS Associates, Inc.
- Wipro Ltd.
- Accenture
- Tata Consultancy Services Ltd.
- IBM Corporation
- Opera Solutions LLC
- Genpact Ltd.
- Capgemini
- Mu Sigma, Inc.