India’s current scenario Trends in the India market, factors driving adoption Demand & supply side challenges Recommendations for stakeholders

1. Industrialisation of analytics in India: Big Opportunity, Big Outcome
Webinar discussion

2. Study methodology
NASSCOMcarriedoutthisstudyinpartnershipwithBlueoceanMarketIntelligence:
•Onlinesurveyamonganalyticsusers/non-users:BlueoceanconductedanonlinesurveyamongIndianfirmscoveringbothusersandnon-usersofanalyticsacross~600firms
•In-depthinterviewswithusers(demandside):blueoceanandanindependentresearchconsultantjointlyinterviewednearly15analyticuserfirmstogetdeeperinsightsaboutanalyticsadoption,driversandchallenges.Thesefirmsrepresentedvariousverticalsincludingadvertising,healthcare,telecom,auto,eCommerce,microfinance,energy& utilities,CPG,etc.
•In-depthinterviewswithanalyticsvendors(supplyside):NASSCOM’sinternalteamandanindependentresearchconsultantconductedin-depthinterviewswithanalyticsvendors(20firmsrepresentingserviceprovidersandanalyticsproductfirms)tounderstandtheirperspectivesonthedomesticmarketpotential
•Secondaryresearch:Blueoceanresearcherslookedatbusiness,industry,andtechnologypublicationsforinformation
2

3. Pre-relational
DescriptiveWhat is happening?
DiagnosticWhy/How did it happen?
Predictive
What may happen?
Prescriptive
What should we do?
Analytics: Progress from reactive to proactive, real- time response
Evolution: From static to real-time, dynamic analytics
Examples:
•Sales reports
•Customer segmentation
Examples:
•Web analytics
•Location intelligence
Examples:
•Propensity modeling
•Sales forecasting
Examples:
•Price optimisation
•Marketing mix optimisation
Complexity, usage of statistical methods
1990s
2000-2004
Pre 1970s
Examples:
•Data generation
•Storage
2005-2010
2011 onwards
Technologies
Relational Databases
OLAP tools
Web analytics tools
Data virtualisation
Packaged analytics tools
Mobile BINoSQLHadoop, Hive
Cloud BI
Big data HANA
ETL tools
BI suites
Dashboard tools
Data integration platforms
Machine learning
AI
Source: blueocean, NASSCOM 3

4. Analytics: Globally, one of the fastest growing technology markets…
•Increasingmaturity:Firmsworldwideexpandinganalyticsadoptionfromdescriptiveanddiagnosticanalyticstopredictiveandprescriptiveanalytics
•Dataandanalytics-nolongersoleresponsibilityofIT:Organisationalculturechangingfromasiloedownershipofdataandinsightstocross-enterpriseapproach
•Firmsdrivingcloud-basedBI:Newscenariossuchascollaborationwithcustomersandoutside-the- firewallmobileaccessalsoacceleratingadoption
35
42
51
42
54
71
2012
2014E
2016P
•Self-serviceanalyticsbecomesthenormatfast-movingfirms:Businessesarebeginningtoexpectflexibilityandusabilityfromtheirdashboards.Monolithicinfrastructurestackswillpassinfavorofsolutionsthatcanworkwithnewdatasources
•In-memorycomputingprovidinganopportunitytorethinkinformationsystems:In-memorycomputingwillhavealong-termimpactbychangingusers’expectations,applicationdesignprinciples, andvendorsstrategies
•EmergenceoftheCDO:WhileitrolledupunderCIOprioritiesearlier,withanalyticspervadingacrossbusinessunits,theroleofChiefDataOfficer(CDO)isemerging
Software
Services
CAGR 14.3%
CAGR 9.7%
Notes:
E: Estimate; P:Projection
#: Represents only outsourcing services market
Source: Cloudtech, Gartner, IDC
Global analytics market
USD billion
76
96
121
#
4

5. …Driven by data explosion, access to affordable computing & business imperatives
Volumeof data is exploding 10x increase
Zettabyte
5
4
40
2013
2020
10X
2000
2014
Data comes from increasing Varietyof sources; with increasing Velocity:Social media, cloud, IoT, eCommerce, cloud computing
Significant reduction in cost of acquiring, storing, managing data
Increased need for analytics:Firms realisingthe value of analytics to compete and operate efficiently
Data storage cost
USD/GB
800 mn+ daily active users
6 billionhours of video watched every month
250 mn+ active users; 100 mn+ tweets every day
1 Exabyte data stored in cloud, growing rapidly
9 billion connected devices in 2018, up from 2 billion today
Increased vendor activity:Analytics is emerging as one of the top revenue opportunities
Analytics: A top priority for CXO’s
CIO priority surveys (2012-2014)
Priority rank for Analytics & BI
1
C–Suite survey, 2013
1
CIO Conference Poll, 201
1
State of CIO survey, 2014
1
99%
Source: cdn.business2community, Gartner, IDC
0.1 –0.5
10

6. India analytics market: CAGR of ~25 per cent to cross USD 2 billion by FY2018
Indian analytics market (USD million)
Notes: #-represents only outsourcing services market
Source: NASSCOM
India: Analytics landscape
•Domestic market still nascent; to double by FY2018
•Rapid growth in internet penetration, mobile penetration, ecommerce driving data growth
•Globalization, competition, regulatory compliance are also key foundational drivers
•There is increased C-Suite awareness about benefits from big data and analytics
FY2014E
Analytics firms
Start-ups
Product firms
Integrated firms**
600+
XXX
XXX
XXX
Notes: *: The break-up given includes over-laps; hence a direct total can't be calculated; **: Top 100 IT-BPM firms who offer analytics services and products
Source: NASSCOM
2
#
*
92
XXX
XXX
521
XXX
XXX
FY2012
FY2014E
FY2018P
Domestic
Exports
CAGR 24%
CAGR 26%
613
954
2,275

7. Mobile and internet growth, technology base, growing economy sets the base for analytics growth in India
Increasinginternet, mobile penetration driving data growth
internet users
29
382
2012
2016
Smartphone users in India#(mn)
Organised retailgrowing rapidly, driving need for analytics
2012
2015E
40.5
88.3
Increasedawareness at C-suite level
Regulatory compliance
social media users
•Big data & analytics -No. 2(after cloud) in key areas for investment for CIOs
•RBI’s Automated Data Flow initiative (ADF)
•International Financial Reporting Standards (IFRS)
•eXtensible Business Reporting Language [XBRL]
To further push firms to invest in analytics and BI
243 mn
168.7 mn
Organised retail* USD million
Retail eCommerce
is exploding (no of online shoppers)
20mn
2013
40mn
2016
Rapid technology adoption by Indian industry
•Limited legacy IT challenges, enable rapid technology adoption
•Huge potential for analytics as large number of Indian firms get increasingly IT enabled
Growingeconomy, competition, globalisation
•India: One of the fastest growing economies
•Stabilising economy, globalization, increased on- data, fact-based decision- making tools
Source: Accelpartners, Avendus, blueocean, CIOandleader, Gartner, IBEF, IBM 7

8. Mumbai
16%
Bengaluru
29%
Chennai
8%
Pune
8%
Delhi
11%
Hyderabad
11%
Gurgaon
7%
Noida
7%
Kolkata
4%
India: Vibrant analytics vendor ecosystem
•1.5X:GrowthinnumberofanalyticsfirmsinIndiainlasttwoyears
•~3.6X:IncreaseinaverageemployeesofanalyticsfirmsinIndiafrom76in2012to270in2013
…Geographic spread in India
per cent
Analytics vendor landscape in India…
Global in-house centres
50+
Pure-play analytics service providers
80+
BPMs & KPOs
80+
Integrated
firms
100+
Analytics
software /
product firms
200+
Source: Analytics India magazine, blueocean, NASSCOM 8

9. 9
Key drivers: Data driven decision making, customer insights, improved performance and efficiencies
243
212
181
169
145
Base 286; multiple responses allowed, value indicates number of respondents ranking these in top 3
Primary factors driving Indian firms to deploy analytics
No. of responses
•eCommerce firms, BFSI and telecom, leading the charge
•Firms in India increasingly looking to analytics to formulate business-driven strategies and derive value…
•…and better manage costs, optimiseoperational processes, earn higher returns
Source: blueocean, NASSCOM
Verticals
Adoption rate
Telecom
High
BFSI
High
eCommerce
High
Retail
Medium
Manufacturing
Medium
Media & advertising
Medium
Government
Medium
Healthcare
Low
Education
Low
Better decision-making
Driving sales and revenues
Cost control, improve RoI
Process efficiency & improvement
Greater customer insights

10. Supply-side challenges: Proving business case, data veracity
•CXO level commitment lacking -Analytics remains a priority to select teams/individuals
•In many Indian organisations, there is a lack of understanding of analytics and its potential benefits
•Customers focus on short term resultsvis-à-vis long term growth goals –more “output” focused than “outcome” focused
•Data collection capabilities are not robust or standardised in many Indian firms; silo-eddata available, and these don’t talk to each other; no consolidated view
•Reluctance to changeexisting internal IT structure or some of the existing organisational systems
•Difficult in finding resources with knowledge of statistics and analytical tools plus domain knowledge, business analysis skills and program management skills
•Internal analytics teams of customers not exposed to business side –leading to lack to understanding of requirements at both ends
10
Challenges mapped to analytics value chain
Value Chain Stages
Challenges
•Organisational siloes
•Existing systems
Data
Collection
•User appreciation of importance of this phase
•Existing systems
•Cost of resources
•Short term focus
•Domain knowledge
•Cost of resources
Data
Organization
Data
Analysis
Data Interpretations
Source: blueocean, NASSCOM

11. Demand-side challenges: Proving RoI, TCO, budget are key challenges; users find data siloes as a key challenge
11
Base: 286-analytics users and 312-non-users of analytics
(multiple responses allowed, value indicate number respondents ranking these in top 3)
Key challenges for analytics deployment
•While many of the challenges were reported by both the users and non-users, there were some clear differences.
•For non-users budget constraints came out as the number one reason closely followed by “unsure how analytics can benefit the organization”
(Users)
(Non-users)
Source: blueocean, NASSCOM
31%
39%
42%
50%
57%
72%
77%
86%
Lack of in-house expertise
Where do I start?
Lack of domain skills(vendors)
Data collection issues
Lack of managementsupport
Cost of solutions andservices
Unsure of benefits
Budget constraints
19%
25%
34%
40%
43%
46%
53%
58%
64%
Insufficient in-house expertise
Where do I start?
Poor data quality
Budget constraints
Management support, vision
Analytics tool cost
Vendor costs
Sharing data across BUs, siloes
Proving the RoI, business value

12. Over 60 per cent of users recognise relevance of analytics
No opinion4%
Not important5%
Somewhat important30%
Important38%
Very important23%
Importance of analytics
Indian firms
XX%
XX%
18%
3%
Central analytical group that closelycoordinates analytical activity acrossthe enterprise
Central analytical group; somecoordination over analytical activityacross the enterprise
Localised analytical capabilities that arebeginning to share tools, data & people
Uncoordinated pockets of analyticalactivity
Current state of analytics in Indian firms
Users
Base: 598; 286 analytics users, 312 non users
Base: 286 analytics users
Source: blueocean, NASSCOM
No opinion9%
Not important14%
Somewhat important38%
Important26%
Very important13%
Users
Non-users
Focus area for IT-BPM industry in immediate future
12

13. Indian firms recognise the relevance of leveraging analytics; but need to need to “industrialise” analytics
13
•In order to derive value from analytics, organizations need to “industrialize” analytics
•Industrialization of analytics implies analytics programs that are tightly tied to business outcomes, delivered via engagement models that disaggregate the analytics process chain, hive out the repeatable and standard processes to centralized process teams, and use standardize tools & approaches
•Very few respondents in our study indicated that analytics is “not important”.
Business value
Phase 1: Discover
Phase 2: Establish
•Deliver initial pilots/models
•Organisational buy-in
•Standardisetools, processes
Phase 3: Industrialise
•Link analytics business priorities
•Disaggregate analytics, move “heavy lifting” processes to shared services teams/outsource
•Standardisetools, processes
Mid term
Long term
Short term
•Data discovery
•More of “art”
•Analytics pilots
Current state of analytics organization
In Indian firms –(Users)
42.0%
37.4%
17.5%
3.1%
Central analytical group that closelycoordinates analytical activity across theenterprise
Central analytical group; somecoordination over analytical activityacross the enterprise
Localised analytical capabilities that arebeginning to share tools, data & people
Uncoordinated pockets of analyticalactivity
Source: blueocean, NASSCOM

14. How can IT-BPM firms differentiate their solutions?
76%
69%
60%
54%
46%
31%
30%
Base 286; multiple responses allowed, value indicate number of respondents rating these as top 2 on a 5 point scale
Important criteria while selecting analytics solutions & services
No. of responses
Return on investment
Proven cases, references
Assistance in setting up analytics system
Cost, discounts
Vendor brand/reputation
Product functionality
Responsive after sales service
Source: blueocean, NASSCOM
Clear need for showcasing business value:
•Demand side seeing value add in learnings from global and Indian peers
Phase 1: Discover
Phase 2: Establish
Phase 3: Industrialise
Hand-hold across the analytics value chain:
•Integrate multiple data sources, optimise data utilisation, data security, maintenance
•Lower total cost of ownership
As analytics gets further embedded into firms’ business culture:
•Greater demand for functionality across business value chain
•After sales services –to emerge as a key differentiator
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15. Engagement models: Largely hybrid of dedicated internal teams and vendor engagement
•IntheIndiandomesticmarket,largepartofanalyticalengagementscontinuetobedrivenbyinternalteams.WhenIndianfirmslookatoutsourcinganalytics,largefirmspreferannuity/FTEmodels.Smallerfirmsoptingforad-hocengagementstopilotanalyticsbasedprojects,analysetheRoI,andthenmakelargerinvestments
•Inmanycases,Indianfirmsworkwithanalyticssoftwarevendorsfortoolsandsystemsandimplementationservices,andthenhavetheirowninternalteamsrunandmanagetheanalyticsservices
•IT-BPMfirmsofferinganalyticsaspartofthepackageddeal;independentpureanalyticsoutsourcingprojectsyettogainsufficienttraction
Internal teams
One-off/Project based engagement
Annuity/FTE engagement
Outcome based models
Adoption by Indian analytics users
High
Moderate
Low
Negligible
Source: blueocean, NASSCOM 15

16. Recommendations
Vendors
Users
Academia
Govt
NASSCOM
Increase awareness aboutanalytics
Communicate the benefits of analytics
Develop analytics talent pool, not just in tools, but also in domainskills, business analysis etc.
Focus on long term benefits
Be prepared to make investments in analytics
Offer integrated services across the analytics value chain
Address cost concerns of domestic clients
16
Recommendations for stakeholders
What needs to be done to tap the domestic analytics market opportunity?
Source: NASSCOM blueocean study

17. Recommendations
Vendors
Users
Academia
Govt
Organizational focus, C suite commitment
Strategic handshake between departments, cross-functional teams, focus
Tie analytics initiatives to business priorities
Integrate analytics with legacy systems and tools
Disaggregate analytics processes, move standard processes to scalable delivery teams
Standardize and leverage common tools & technology
Address cost concerns of domestic clients
17
Recommendations for stakeholders
What needs to be done to industrialise analytics in organizations in India?
Source: NASSCOM blueocean study

18. Summary
Foreachofthesestages,thesupply-sidewouldneedtoaddressspecificissues:
•Phase1:ShowcaseRoI,usecases-valueaddinlearningsfromglobalandIndianpeers
•Phase2:Addressentireanalyticsvaluechain-integratemultipledatasources,optimisedatautilisation,datasecurity,datamaintenance
•Phase3:Industrialise:Greaterdemandforfunctionalityacrossbusinessvaluechain;aftersalesservices–akeydifferentiator
Industrystakeholderswillneedtoworkona6pointagendawhichinvolves:
Six point agenda for Industry stakeholders
1.Raising awareness
2.Creating talent
3.Variabilising cost of offerings
4.Standardising tools and technologies
5.Setting up cross functional analytics teams
6.Getting C-level buy in, to drive industrialisation of analytics in India
18

19. 19
Industrialisation of Analytics in India: Big Opportunities, Bigger Outcomes
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Report Details

20. 20
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