“We are in the business of building [FILL IN THE BLANK], why would we build an insights platform out ourselves.”
That sentiment will drive more and more companies to explore the insights services option. Many already feel like they are chasing a moving target. Data and analytics practices are evolving quickly with new tools and techniques moving the bar higher and higher. Not to mention the explosion of data sources, and the dearth of skilled talent out there. As executives become more aware of the value of data and analytics, they become increasingly dissatisfied with what their organizations can deliver: in 2014 53% of decision-makers were satisfied with internal analytics capabilities but by 2015 those satisfied fell to 42%. These are the leaders who will look for external service providers to deliver insights. They realize they might not get there themselves.
The sentiment expressed in the quote above was actually from a consumer packaged goods company. For its execs winning in cities has become paramount. As urbanization increases, cities provide big opportunities. But not all cities are alike and differentiating what they take to a specific market requires deep local knowledge – and a lot of diverse data. To create hyperlocal, timely, and contextually relevant offers, the company needs data on local news, events, and weather as well as geo-tagged social data. All of that must be combined with its own internal and partner data.
The team also wanted to experiment with new analytical methods such as social network analysis to identify influencers in the new markets — and do all of this across cities from Singapore to London. That’s a serious undertaking. And, they quickly learned that this process — external data sourcing, new analytics methods, and insight delivery — was too much to take on themselves (see the figure to the right). In the words of its chief analytics officer, "We are in the business of building fast-moving consumer goods, why would we build this out ourselves?"
So they looked for an insights service provider. And, there are many out there. However, that brings the challenge of choosing the right provider from a broad landscape. The new insights service providers come from vastly diverse backgrounds (See the figure below).
My new report, Vendor Landscape: Insights Service Providers, provides an overview of the nascent vendor landscape for insight services, and provides recommendations for how to pick the right one. An upcoming Forrester Wave on insights service providers will offer a more formal comparison of some of the players in the new market.
I’m also looking for some case studies to help others understand just how it works, and to identify the do’s and don’ts of these new relationships.