Analytics has become a key component of New Zealand organisations’ digital strategy as it is considered critical in enabling access to business and market insights that assist in making effective business decisions, reports IDC.
“New Zealand organisations that have not adopted analytics are finding themselves increasingly disadvantaged compared to peers who do utilise the technologies to improve operational efficiency, increase agility, manage costs, and comply with regulations,” says Chayse Gorton, ANZ market analyst for IT services at IDC.
Gorton notes the ability to outsource analytics-related IT services is levelling the playing field between organisations with the capabilities to perform analytics in-house and those that do not.
Smaller firms, constrained by budgets, or larger organisations constrained by on-premise infrastructure, are overcoming these constraints through utilising external providers, he adds.
In the IDC Australia/New Zealand’s 1H 2019 IT services tracker, the analyst and research firm is forecasting that spending on analytics-related IT services will reach NZ$261 million, climbing to NZ$468 million in 2023.
Overall, analytics-related IT services revenue share will increase from 7 per cent in 2019 to 12 per cent in 2023.
This represents a five-year compound annual growth rate (CAGR) of 15.9 per cent between 2019 and 2023.
In contrast, the revenue for New Zealand non-analytics services is forecast to grow at a CAGR of only 1.7 per cent to 2023, reports IDC.
IDC’s 2019 NZ IT Services Ecosystem study, meanwhile, identified that 46 per cent of New Zealand firms plan to invest in analytics or big data solutions in 2020. Most of this investment will be directed at external analytics service providers.
This year, 79 per cent of New Zealand organisations used analytics services, up from 65 per cent in the 2017 IT Services Ecosystem Survey.
These trends demonstrate how analytics is rapidly shifting from a nice-to-have function to one of strategic importance.
IDC research has also shown that customers often prefer consuming the full life cycle of business analytics services, from assessment to process outsourcing, when they utilise a third-party for their analytics needs.
“Analytics providers that hold the capability to deliver across the value chain of business analytics services, from information management and analysis, to business inference, will stand to gain a larger market share in 2020,” says Gorton.
“Organisations are already moving beyond viewing analytics as a traditional metric system, towards viewing analytics as an enabler of competitive differentiation, in comparison to their peers and competitors.
“Analytics providers who communicate their differentiating capabilities, particularly industry specialisation, will become highly valued”, he concludes.