It is the time of the year when businesses take stock of their performance in the year that went by and also see what the New Year may bring in. How did the Analytics & Insights business fare in 2014 and what are the learning that can help us forecast performance in 2015? In review I think 2014, in spite of some hiccups, has been a great year for the business. Definitely the industry experienced greater acceptance of analytics across verticals for helping organizations make sharper and well informed business decisions. In fact its sway over the market is so intense that even the term ‘dashboards’ is now being replaced by ‘Analytical Flows’.
Three key drivers - revenue, innovations / new trends as well as the enterprise preparedness to convert the opportunities - provide insightful assessment of the industry’s performance.
In 2014, specifically in the banking and financial services sector, IT honchos dug into their deep pocket books to invest in new gizmos – from analytical decision platforms to cool analytical BI tools integrated with underlying data to provide fast predictive insights. Many companies focused on this sector - mid-tier and boutique players in particular - have benefited from this largess.
The year 2014 has also seen several innovations in this space. Several cloud based solutions have hit the market. Cloud based analytics service in itself was kosher with industry majors announcing their own products. Watson Analytics, Salesforce Wave, Oracle Cloud offering are key highlights in the market that I have discussed in more detail in another piece. ApplePay, CurrentC are other key innovations that come to mind that impact analytics in a big way by broadening the marketplace. As companies seek to offer personalized customer experience, these innovations will increase the thirst for deeper insights. 2014 also saw high profile acquisitions where the IT industry majors acquired analytics companies to broaden their reach and capabilities.
In 2014 many banks had initiated a comprehensive internal review of their analytics capabilities – human assets, extant platforms and have authored all the findings into a roadmap for the future. It is interesting to note that the emphasis of many Fortune 100 banks appears to be on revamping analytical technology platforms. Road maps include using big data technologies, incorporating social data in customer acquisition/ collections and integrating real-time predictive analytics capabilities that can instantly provide personalized offers that will be the new norm in customer management. Further, freshly inked digital strategy roadmaps seek to go far beyond channel optimization and emphasize revenue generation. All this, together with a rebounding economy, portends to a busy 2015 for Analytics in the banking and financial services vertical.
But how are the IT majors prepared to meet the opportunity? As already mentioned mid-tier and boutique consultancies continue to have the advantage and are better poised to exploit the opportunities. But they have their share of problems in scaling and retaining top talent. It would be logical to expect swift growth and acquisitions in this space.
It is an entirely different story for the IT majors who continue to be plagued by several problems. High profile executive turn over, revenue slide, multiple flopped product/solution launches and a leadership that is completely at woods with analytics are key issues that continue to bedevil the majors. To add to their troubles, a series of strategic initiatives launched to push analytics revenue have been non-starters. While these are known devils, their resolution does not appear to be near. Further, there are also reports of huge layoffs, albeit in offshore centers, that point to acute revenue pressures that do not augur well for 2015 performance.
While there seem to be no dearth of market opportunities, the major players as well as mid-tiers have their own laundry list of fires to put out. Unless they get their acts right, 2015 revenue will be in jeopardy. Stay tuned as the industry rides through the turbulence in 2015.