India set to be data analytics hotbed

The country's traditional strength in software development and IT services and large talent pool mean it is well-positioned to become a strong global data analytics player.
Written by Jamie Yap, Contributor

India has always been a key market for software development and IT services, given its strength in the business process outsourcing (BPO) arena. This, together with its large talent pool of IT and software professionals, mean the key ingredients for India to be a vibrant data analytics hub are in place.

India is well-positioned to be a global center for data analytics because of the huge number of IT graduates entering the labor market every year, said Andrew Milroy, vice president of Asia-Pacific ICT practice at Frost & Sullivan.

Data analytics is not new to the country's IT scene, said Milroy, but the importance of utilizing such technology is only now growing worldwide as companies look to make sense of the deluge of data, particularly unstructured data. The insights gleaned then go into improving companies' business agility, customer relationships and market predictions, he said.

Surya Mukherjee, senior analyst of information management at Ovum, agreed the ready availability of skilled IT talent is one of India's primary advantages in establishing itself as a data analytics powerhouse.

The country has a huge base of professionals proficient in using common business intelligence (BI) and data warehousing software tools, and such skills are key foundations to equip them to analyze unstructured data sets, Mukherjee noted. Those skilled in relational methods of analysis, for instance, are better suited to conduct data mining with non-relational systems.

He added many Indian software companies know how to manage their talent by "capturing their tacit knowledge, training them hands-on, and setting them on a viable career path". This helps to minimize staff attrition and ensure stability in these companies.

BPO knowledge invaluable
The Ovum analyst pointed to India's knowhow in the BPO industry as another factor that makes it well-placed to ride the data analytics wave.

He said the country's IT companies would know the specific issues and pain points related data analytics according to specific industry verticals due to their outsourcing work for various companies, and this would be a competitive advantage.

Ultimately, India's software knowledge and BPO history will "only help add to its data [analytics] story", Mukherjee stated.

There are challenges that need to be overcome though, as the country, like everywhere else in the world, is in short supply of people skilled in applied statistics and mathematics, he noted.

That said, local companies are already conducting training programs to boost the number of professionals in these areas and will likely bridge the talent gap within the next few years, he predicted.

Won't replace BPO
However, despite the global interest, both analysts doubt data analytics will eventually replace BPO as the main revenue generator for India's IT services sector services.

For Mukherjee, it all boils down to the size of the industry. "It will never be a replacement. The big data analytics market is not even one-tenth the size of BPO."

Milroy said analytics will be benefit India and its domestic companies but will not replace other IT services. Rather, it will be a complementary function to be integrated into other IT systems. For example, customer analytics as part of BPO services such as contact centers could be one area of development, the analyst said.

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