KDnuggets : News : 2007 : n21 : item29 < PREVIOUS | NEXT >


Outsourcing analytics: risking long-term defeat?

A company's second most important asset is their data. So when it comes to analysis of that data, are you better off doing it in-house or outsourcing it to experts? A proliferation of off-the-shelf analytical tools have made it easier than ever to do it in-house, but would you benefit more by outsourcing the task to experts? Patric Timmermans at Infor and Adam Leslie from Experian debate the issue.

Outsourcing analytics: risking long-term defeat?

By Patric Timmermans, Infor

In their most recent book, Return on Customer, Don Peppers and Martha Rogers write about one-to-one marketing and customer-centric behavior. The basic thesis is that a company's biggest asset is their customer. Simply stated, all of the company's revenue comes from the customer, not their product, not their brand, not their sales team. As a consequence, focus on the customer is critical for each company.

Looking at it differently, there are two strategies to marketing:

  • Traditional marketing, where the goal is to bring a product to the customer and to reach as many as possible potential customers. Strategically, the company is trying to maximise the value created by each product.
  • One-to-one marketing, where the goal is to satisfy customer needs and the strategic goal is to maximise the value created by each customer. In other words, increase the share of the customer, also referred to as wallet share.

"Analytics is becoming more fluid"

By Adam Leslie, Experian Integrated Marketing

If you look at the companies that use data as a key part of their strategy, a sizeable amount of them are now doing at least a degree of outsourcing. And the number is growing.

One of the problems of doing analytics in-house is the issue of economies of scale. A company would be operating it just for themsevles whereas an outsourcer would be developing that for a number of clients. Furthermore, event if a company undertook these duties in-house, they would probably still end up being reliant on a number of suppliers. When you do it yourself it is likely that you will buy analytical packages which you put into your database.

It is also good to keep data and systems up to date. And when companies drill down into data they just can't reach certain parts that outsourcers can; parts that we would see as being an important offering.

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KDnuggets : News : 2007 : n21 : item29 < PREVIOUS | NEXT >

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