Editor’s note: Jen Hamel is a senior analyst in TBR’s Professional Services Practice, where she is responsible for coverage of IBM Global Services, with additional focus on IBM’s healthcare IT services and management consulting businesses. Hamel also launched TBR’s Analytics & Insights Professional Services coverage, which includes customer research and market forecast reports and a vendor benchmark.
Here’s a Q&A with Hamel about trends she sees in analytics and professional services:
- TBR: What do you see as the major trends in the areas you cover?
Jen: My research focus is analytics and insights (A&I) professional services, which include consulting, integration and implementation; application development and maintenance; and managed services surrounding analytics software. The portfolio used to be called Business Intelligence, but recently, we changed the name to more accurately reflect how we look at the analytics market, including the business impact analytics technologies can have for enterprise clients.
From a professional services perspective, customers expect their vendors to go beyond implementing software to help them extract deeper business insights from their data. This reflects what I see as the end of analytics’ honeymoon period.
No longer are enterprises interested in buying analytics technology for the sake of having the latest tool or killer app; they expect their analytics investments to deliver tangible business value.
In many cases the challenges are not in the technology itself, but in determining what data is available and appropriate to generate actionable insights, reorganizing data flows and business processes to ensure data quality, and finding the right skill mix to maintain the analytics environment and interpret data insights in a business context. Without those building blocks in place, customers waste investments on analytics technology that does not deliver its promised business value, and technology vendors find themselves on the receiving end of blame and skepticism.
Due to these challenges, opportunities for professional services vendors have skyrocketed over the last couple of years. Our customer research shows increasing adoption and spending across all A&I service lines, with buyers expecting both technical and business outcomes from professional services engagements. In addition to evaluating new analytics offerings, enterprises are taking stock of prior purchases, which may have been done piecemeal, and looking to professional services vendors to help rationalize and integrate solutions.
I see customers increasingly looking to vendors to assist with application consolidation and functionality improvement, relying on vendors’ technical expertise to apply analytics to various sources. Also, with rising involvement of lines of business in the analytics purchasing process, customers want vendors to tailor analytics solutions to their industry needs to generate outcomes such as better customer engagement or regulatory compliance.
The range of expertise required to ensure analytics success draws in vendors from a broad spectrum of the IT services market, including the usual system integrator suspects such as IBM, Accenture and TCS; hardware-centric vendors such as Cisco and Hewlett Packard Enterprise; and Big Four consulting firms such as Deloitte and PwC.
- TBR: Looking ahead, where do you see analytics professional services going?
Jen: Analytics technology no longer exists in a vacuum. Over the next five years, services vendors will need to grow and maintain competency in various adjacent areas, including cloud, Internet of Things and artificial intelligence, to meet evolving customer needs. Though increasing prevalence of automation will eventually replace the need for lower-value professional services such as application and infrastructure maintenance, higher-value capabilities such as business consulting, user experience design and managed services will continue to attract customers to analytics-enabled digital transformation engagements.
We project the A&I professional services market to grow at a five-year CAGR of 11.4% through 2020. Leading vendors such as IBM, Accenture and Deloitte are the largest players in the A&I professional services space, and I expect their dominance will continue as they develop trusted, long-term customer relationships through consulting.
Note: TBR is based in Hampton, N.H.