The pros and cons of outsourcing data analytics

Organizations are increasingly tapping service providers to glean insights from their data. Here are the benefits and risks of analytics outsourcing.

The pros and cons of outsourcing data analytics
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Companies outsource all kinds of IT and business functions to service providers, including some that are quite strategic. Increasingly, that includes data analytics, one of the more competitively advantageous areas of the technology spectrum.

With data analytics outsourcing, organizations hire service providers to perform analytics on the data they provide to the outsourcing company. Industry research shows demand for the service is on the rise.

For example, a 2017 report by market research and consulting firm Hexa Research said the worldwide data analytics outsourcing market is set to expand at a compound annual growth rate (CAGR) exceeding 30 percent between 2016 and 2024, reaching annual revenues of more than $6 billion by the end of the forecast period.

Growing awareness about the advantages of data analytics is a key market driver, according to the Hexa report. Businesses are gradually realizing the importance of analytics in maximizing revenues and in identifying consumer choices, it said, and not every organization is equipped with the required knowledge and resources for effective data analysis.

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