Managed Analytics is on the rise due to organizations not having ample in-house resources to support their own fully developed analytics practice. Industry trends show increasing Cloud & Software as a Service (SAAS) adoption due in part to the ease of realizing results without the need for full backend administration and maintenance. With innovation and consolidation occurring at a fast pace in analytics, executives need to consider: when it comes to realizing your analytics journey, should you build it or buy it? Some questions you’ll face in this decision are:
- Do you have the bandwidth and resources to build out end-to-end analytics – from data ingestion, integration, processing, modeling, and maintenance?
- Will it be more time- and cost-effective to hire, train, and retain analytics talent or to choose a provider that specializes in analytics to find and utilize impactful insights?
- What if you can leverage a long-term partner who will enable you through Managed Analytics and can provide you Analytics as a Service, while you empower your internal team to utilize the insights and elevate to the next level of analytics maturity?
Challenges of an In-house Analytics Practice
Ever changing technology landscape – The toolsets, programming languages, and machine learning libraries are evolving every day, making it challenging to succeed without a dedicated effort. As we leverage more unstructured and streaming data, it opens up a need for a variety of technologies with multiple data scientists, data engineers and software engineers adding in a host of technologies. The modern advanced analytics platforms have evolved over time and are complex.
People with the right skillsets – A typical analytics journey requires numerous technical activities associated with a good analytics function, requiring skillsets ranging from database administrator to data scientist: hosting the data and any machine learning models, monitoring the models for errors or outliers, retraining models due to new requirements or data, handling system upgrades, building intuitive dashboards, and more. It’s best to have an agile team that can act as a shared service and contribute the various skills, as well as foster the motivation to try out the latest tools and establish best practices.
Establishing and Formalizing Processes – In an advanced analytics environment, there will be a flurry of activity, often in parallel streams, requiring oversight and formalized processes. These processes need to be defined and vetted, then maintained by dedicated resources and could involve organizational restructuring. Should your analyst function be centralized to share best practices, or decentralized to capitalize on subject matter expertise?
Data Availability – Data is the key driver for accurate predictions, and the quality of data is often more relevant than quantity. As the organization recognizes the value of data, there is typically a higher demand and investments towards data storage, integration, and processing that supports the value creation using advanced analytics. This means additional investments in terms of systems, people and processes.
Despite these challenges, there are some advantages to building out an in-house analytics team. For example, your in-house analytics team can provide tools and training to your business users which can ultimately broaden the impact analytics can have in the organization and shift the culture to let data lead decision making throughout the organization. Also, in house teams can better understand the nuances of your business and can use their domain knowledge to build impactful models.
What is Managed Analytics?
Managed Analytics is a practice by which an enterprise could leverage a long-term partner who could bring valuable team members, expertise as well as Data Science tools/platform that could kick start and/or manage your analytics journey. Depending upon the organizations’ analytics maturity, this could be a quick option to test the waters or partner with experts for handling the complete analytics load or outsource individual tasks.
Benefits of Managed Analytics
Increase efficiency, leveraging your partners/experts – Utilize the expertise of a specialized service provider, focused on analytics. Realize the benefits of partnering with a company that knows your industry and brings experience from outside your organization.
There is no need to hire multiple roles or embark on a tough journey of finding resources with a combination of rare skills – the ‘unicorns.’
The experts will stay relevant to the industry as well as the technology stack. They will be continuously learning and implementing the latest solutions that you can benefit.
Deliver advanced results, fast – With a highly-skilled, flexible resource pool, a Managed Analytics team will provide outputs that will impact business units for operations, analysts, and executives. The in-house analytics team will be able to offload some mundane jobs and focus on activities that create more value.
Reduce cost, overheads & increased profits – Partnering with an outsourcing provider will reduce the overhead cost related to hiring and retaining fully-utilized talent. You will also be able to leverage part-time resources or from your partner’s shared resource pool that could save you time and help level out demand generation or handle any sudden spike in analytics needs, reducing your operating cost.
Dynamically scale up and down – Many organizations are breaking into exciting use cases for analytics through proof of concept projects or other scaled-down efforts. Fully scaling solutions means higher data volumes and velocity, more models in the pipeline and creation processes, and more models in production to monitor. Mature organizations can have 100s of models in production: is your organization ready to handle that workload? On the other hand, there may be periods of more or less consumption of data or processing; ideally, you won’t have to pay for expensive storage or processing while you’re not using it. Are your systems and resources able to scale up and down as needed?
Despite all of these benefits of using a Managed Analytics service, there can be some drawbacks. For example, sometimes when you are using a third-party you may not have the continuity of resources that you would expect to support a specific initiative.
So, Is Managed Analytics Right for You?
While Managed Analytics can provide a quick ramp-up at a lower cost and carries many benefits, it’s all about building impactful analytics at the end of the day. The same considerations for achieving analytics maturity apply to building an in-house function and offloading through Managed Analytics: access the experience of experts in your function and industry, adopt and manage the right technology stack for your goals and needs, and encourage the business to take actions from delivered insights to fully realize the impact of analytics.