State of analytics in domestic firms in India 2017 - by AIM & Cartesian Consulting

STATE OF ANALYTICS IN DOMESTIC FIRMS IN INDIA

2017

By Analytics India Magazine & Cartesian Consulting

State of Analytics in Domestic Firms in India 2017

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CONTENT

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13

07

21

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27

Introduction

Indian Firms- Key Metrics

For Analytics Function

Types Of Analytics Firm

In India

Analytics Penetration vs.

Maturity

Key Findings

Banking- Analytics

Penetration vs. Maturity

31 Ecommerce- Analytics


11 Analytics At Indian Firms-

Key Trends

17 Industry View- State Of

Analytics in HDFC Bank

25 Sector View- Analytics


29 Conglomerates- Analytics


33 Telecom- Analytics


35 Industry View- State Of

Analytics in YES Bank

State of Analytics in Domestic Firms in India 2017 By Analytics India Magazine & Cartesian Consulting

54

According to a recent study, the analytics industry in India is expected to almost double by the year 2020 and ~4% of revenues are expected to come from the domestic market. This data re-affirms the fact that analytics industry in gaining importance in India and is being deployed across industries, including banking, finance, e-com-merce, retail, and telecom.

The study gives us a quick insight into how the analytics scenario is constantly changing and the rapid evolution that all the major segments of Indian analytics market is witnessing-- namely service providers, captive centres and domestic market.

Last year’s study suggested that mostly B2C companies were interested in analytics. Let’s find out if the scenario has changed and how has ana-lytics managed to penetrate the domestic market.

This year’s study has been sponsored by Cartesian Consulting, a global analytics servic-es firm specializing in customer, marketing, and business analytics. We looked at 20 large Indian firms across industries that have adopted analyt-ics to improve business.

introduction


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types of analytics firm inindiaThere are three major players — service provid-ers (who provide analytics services to the end consumer), captive centres (back offices that do outsourced work) and the domestic market. Service providers have been dominating the ana-lytics market (their share of the market is ~75%) for quite some years and it is only now that the other two players are becoming equally competent. In fact, the domestic market accounts for just 5% of the Indian analytics market. Armed with their own analytics team, these firms use analytics for their internal processes.

Service Providers

Captive Centres

Domestic Market

1.

2.

3.


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keyfindingsLike last year, it is the private banks such as Kotak Mahindra Bank, Axis Bank, ICICI, HDFC, Yes Bank that are deploying analytics extensively. Among the public banks, SBI is the most analytics savvy. In the insurance space, Max Life Insurance leads the pack.

Among the ecommerce players, the frontrunners are Flipkart and Ola, while Patym and Zomato lag substantially.

In telecom, Idea Cellular has embraced analytics faster than big players like Bharti Airtel.

In the automobile sector, Mahindra Group and TATA Motors are upping the game.

Considering the relative focus on advanced analytics by other conglomerates, Aditya Birla Group, Reliance Industries, L&T, ITC have a de-cent focus on analytics.


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Percentage Of Analytics Function across Various Cities In India

50%

40%

30%

20%

10%

0%Mumbai Bengaluru Delhi/

NCRHyderabad Chennai Kolkata Pune

44%

25%

16%

4% 4% 4% 3%

of all analytic functions for Indian firms are based inMumbai

analytics atindian firms- key trends

• 44% of all analytic functions for Indian firms are based out of Mumbai.

• Almost 85% of analytics functions are based out of just three cities – Mumbai, Bangalore & Delhi/NCR.

• The top 10 schools from which Indian firms recruit their analytics teams are: University of Mumbai, Delhi University, NMIMS, IIM Calcutta, The Institute of Chartered Accountants of India, IIM Lucknow, IIM Bangalore, IIM Ahmedabad & ISB Hyderabad.

44%


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othe

rs

Larson & Toubro

SBI

Tata Motors

Reliance Industries

HDFC Bank

Airtel

ICICI Bank

Aditya Birla Group

Kotak Mahindra

Idea Cellular

Max Life Insurance

Axis Bank

Mahindra GroupITC

Yes Bank

Tata Communications

Flipkart

relative average tenure of analytics professionals in indian firms

BANK

ING

OlaPaytm

Zomatoe-co

mm

erce

cong

lom

erat

este

leco

m

indian firms-key metrics for analyticsfunction

• On an average, Indian firms have an analytics penetration of 1.7%. This essentially implies that for every 59 employees in the organization, one employee is associated with data and analytics.

• Analytics penetration is typically higher in new age ecommerce firms and lower in traditional businesses.

• The average tenure of analytics professionals in Indian firms is 3.4 years.

• TATA Motors boasts the highest tenure among India firms, whereas new age ecommerce start-ups have a much lower analytics tenure.

• On the other hand, advanced analytics/ data science as a percentage of total analytics function is higher in new age ecommerce firms in India and lower in traditional firms.

• On an average, analytics professionals in Indian firms have 8 years of work experience.

• Zomato has the lowest seniority in terms of analytics professionals in India firms.

• TATA Communications has the highest seniority.


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relative focus on advanced analytics/ data science by indian firms

Axis Bank

HDFC Bank

ICICI Bank

Kotak Mahindra

Max Life Insurance

SBI

Yes Bank

Flipkart

Ola

Paytm

Zomato

Aditya Birla Group

ITC

Larson & Toubro

Mahindra Group

Tata Motors

Reliance Industries

Airtel

Idea Cellular

Tata Communications

BANK

ING

e-co

mm

erce

cong

lom

erat

este

leco

mot

hers

Larson & Toubro

SBI

HDFC Bank

Airtel

ICICI Bank

Aditya Birla Group

Kotak Mahindra

Idea Cellular

Max Life Insurance

Axis Bank

Mahindra GroupITC

Yes Bank

Tata Communications

Flipkart

Ola

Paytm

Zomato

relative seniority of analytics professionals at indian firms

Tata Motors

Reliance Industries

BANK

ING

e-co

mm

erce

cong

lom

erat

este

leco

mOT

HERS


171616

Industry view- state of analytics in HDFC bankWhile analytics has made a headway to all the major industries, banking sector has made a fast progress in adopting analytics and other technologies such as artificial intelligence and chatbots. In addition to regular predictive analytics for driving customer life cycle management, an-alytics also drives customer experience, product design, resource level efficiencies and geo-loca-tional intelligence for sales force deployment.

Analytics India Magazine caught up with Kaushik Ghate, Marketing Analytics at HDFC Bank, one of the leading private banks in the coun-try, to understand the state of analytics adoption in the bank, and the ways that it has affected the overall functioning of the bank.

HDFC bank is the pioneer in using unstructured and nonnumeric data for enhancing custom-er experience and channel efficiencies, for which they have even won external recognition. The bank has also deployed the first ever AI based email subject line optimization tool in Banking industry giving 28% lift in email opens. The adoption of arti-ficial intelligence by the bank could also be seen


in the AI based self learning models for driving channel usage and arriv-ing at next best recommendation at a customer level. “This not only save costs but enhances customer experience”, claims Ghate.

“The extent of analytics engage-ment in the bank can be gauged by the fact that the cutting edge work being done by the team finds mention in the bank’s annual re-port”, says Ghate on being asked how well infused is analytics at their organization.

On Analytics driven approaches at HDFC:

The bank which adopted analytics in 2004 has since been carrying out all its central marketing campaigns driven by analytics. It has been delivering an average of 3x-4x lift over BAU (business as usual con-version rates) since then. “HDFC was the first bank to implement 10

second personal loan, 10 second Auto loan and Two wheeler loan”, he says.

Adoption of analytics has also streamlined the overall functional-ity of the organization as follows:

• Marketing efforts of the sales channel and relationship managers have been optimized as all marketing recommenda-tions are now available to them at a customer level along with pointers and context for those recommendations.

• All central marketing campaigns (SMS/E-mailers) are triggered only to the high propensity customers thereby ensuring relevance of marketing commu-nication at a customer level.

• It has ensured meaningful bank-ing interventions based on event based triggers are being deliv-ered to relationship managers

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The extent of analytics engagement in the bank can be gauged by the fact

that the cutting edge work being done by the team finds mention in the

bank’s annual report. Also, 95% of all marketing efforts and activities done

by bank are analytically driven.

- Kaushik Ghate, Marketing Analytics at HDFC Bank

“

on a T+1 day basis for a focussed and optimized sales efforts.

• For key products like personal loan, auto loan and credit cards, analytics has enabled setting up of an end to end fulfilment process.

On Analytics Maturity at HDFC:

The bank that boasts an analytics and business intelligence team of around 265 employees has a ratio of 0.004 of analytics team personnel vs. other employees of all other departments. Further cut out explains a strength of 27 peo-ple from marketing analytics, 65 from risk analytics unit and 173 from business intelligence. This explains the importance that analytics plays in day to day working of the bank. “Analytics staff strength is 0.40% of the overall staff strength”, says Ghate.

With an average experience of 15 years in predictive analyt-ics domain and average of 11 years of experience with HDFC bank, the unit head at HDFC are at a task of deploying analytics and generating better analytics driven output. “Around 80% of all predic-tive solutions being developed at HDFC are based on advanced an-alytical algorithms, which explains the depth of analytics function at the organization”, he adds.

As already highlighted, in addi-tion to predictive analytics we also drive product design, resource level efficiencies, customer expe-rience and geo-locational intelli-gence for sales force deployment. “The depth of analytics function in the bank can be gauged by the fact that 95% of all marketing ef-forts and activities being done by the bank are analytically driven”, concludes Ghate.

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State of Analytics in Domestic Firms in India 2017

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analyticspenetrationvs. maturityWe looked at organizations on the basis of analyt-ics penetrations and analytics maturity. Analytics penetration is a metric that denotes the degree of infusion of analytics function in an organiza-tion. Analytics maturity, on the other hand, is the metric to quantify the quality and depth of ana-lytics adopted within an organization. Maturity is a combination of employee tenure, percent-age of data science in the analytics function and employee seniority in the organization.

It is important to note that these are relative metrics and the organizations as plotted here are based on a comparative study with respect to each other and should not be compared to organizations outside this study. Also, the values may differ in terms of global standards.

By Analytics India Magazine & Cartesian Consulting


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Flipkart

Ola

Paytm

Zomato

Tata Communications

Reliance Industries

Max Life Insurance

Tata Motors

L&T Airtel

Mahindra Group

SBI

ITC Limited

Yes Bank

ICICI BankIdea CellularHDFC Bank

Axis BankKotak Mahindra Aditya Birla

ANALYTICS maturity

ANALYTICS penetration

IVIII

IIIQuadrant Quadrant

QuadrantQuadrant

Conclusions that can be made from the graph

• Like last year, there is a slight negative correlation between maturity and penetration.

• Flipkart is the only company in the first quadrant, which implies it is both high on penetration and maturity. Given Flipkart was amongst the first companies in the ecommerce space to adopt analytics, it has ramped up its practice both in terms of size and quality of work.

• Most companies seem to lie in quadrant III. This could be attributed to how just few analytics companies have aggressively adopted analytics. Mostly, the new age ecommerce firms like Ola, Paytm & Zomato took a very aggressive stance on their analytics function last year, also coupled by large funding budget they had.

• Zomato tops in analytics penetration and is lowest in analytics maturity.

• Sitting at the bottom of quadrant III, SBI’s analytics penetra-tion and maturity profile suggests the bank needs to push itself harder if it is to compete with private banks in ranking.

• TATA Communications has the highest analytics maturity of all domestic firms in India.

• Quadrant III has many banks - Kotak Mahindra, ICICI, Yes Bank, HDFC and Axis Bank. It would have been great to see them building their analytics capabilities quicker than their older peers in quadrant II.


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ANALYTICS maturity


Telecom

Utilities

Conglomerates

Banking

Ecommerce

AutomotivesSector view - Analytics Penetration vs. Maturity

• While ecommerce firms have the highest analytics penetration of all sectors, they have the lowest maturity.

• Analytics build-up for ecommerce is so high that it makes other sectors appear in an almost vertical line (having the same penetration).

• Massive analytics build-up by mostly new age firms also means that the focus on maturity in terms of tenure, seniority and advanced ana-lytics is yet to kick in.

• Automobile firms have the highest maturity and banking firms the lowest.


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Yes Bank

SBI

Max Life Insurance

Axis Bank

Kotak MahindraICICI BankHDFC Bank

ANALYTICS maturity


Banking– Analytics penetration vs. maturity

• Max Life Insurance has emerged as one of the largest adopters of analytics since last year’s list.

• It ranks highest in terms of analytics maturity, higher than most private sector banks.

• Axis Bank has higher analytics maturity compared to ICICI, HDFC and Kotak Mahindra.

• SBI has the lowest analytics maturity and analytics penetration.


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ITC

Aditya Birla Group

Mahindra Group

Reliance Industries

ANALYTICS maturity


Conglomerates– Analytics penetration vs. maturity

• ITC has the highest analytics penetration of all other companies in the domain, yet it has the low-est maturity.

• Reliance Industries leads in terms of analytics maturity whereas ITC is the lowest.

• Mahindra Group has a relatively higher analyt-ics maturity than Aditya Birla Group but lower analytics penetration.

• In terms of focus on advanced analytics and data science, Reliance Industries is ahead of the pack.


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Zomato

Ola

Flipkart

ANALYTICS maturity


Paytm

ecommerce–Analytics penetration vs. maturity

• Ecommerce firms are biggest adopters of analytics and they are focussed on hiring senior analytics professionals.

• Flipkart is a leader in the ecommerce segment with a significantly high analytics maturity. It, however, lacks in terms of analytics penetration, which is led by Zomato followed by Ola.

• Zomato, however, lacks in analytics maturity.

• The analytics build up is highest in Flipkart.


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Tata Communications

Airtel

Idea

ANALYTICS maturity


telecom–Analytics penetration vs. maturity

• Both in terms of analytics maturity and penetration, TATA Communications is ahead of big players such as Airtel and Idea.

• This can be attributed to the fact that the compa-ny boasts the highest number of senior analytics professionals and also to their focus on advanced analytics and data science.

• Idea has the lowest analytics maturity.


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Industry view- state of analytics in YEs bankYES BANK is new age Bank and Analytics adoption by users within all business groups has been phenomenal. The Bank has the culture of making informed decision basis available data & information. Analytics works as catalyst providing them the right information using statistical tools which helps the central teams to take appropri-ate decisions. There is a significant demand in all business groups to get maximum information be-fore making strategic decisions.

“Our Analytics Team still is at nascent stage of existence since last 2 years; however it has infused its presence significantly in the Retail banking space which is now mainly driven by an-alytics. The journey of analytics from MI visualis-ation to Machine learning is growing in significant pace here at YES BANK”, says Anand K Sundaram, Head - Credit Intelligence & Analytics, YES BANK, while interacting with Analytics India Magazine.


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Starting with a 5 member analytics team to a 20 member team, Sun-daram says that it is still a small unit compared to 21,000 employ-ees of the bank, but largely the us-ers of analytics would be the cen-tral teams within different groups, which would be ~100 staff. “Hence, a 20 member team is mainly cater-ing to about 100 central team us-ers”, he marks.

Analytics adoption and maturity:

While basic analytics existed in the Bank , a dedicated central analyt-ics team was built two years ago. The team has added to the bottom line through various projects, which were implemented successfully. It used a mix of traditional & latest technologies along with statistical

tools. Some of statistical tools used include logistic regression, RFM, Clustering, Segmentation, Random forest, Scoring algorithm and some of the technology tools includes SQL, R, Tableau, etc.

Analytics has slowly started trans-forming manual process and deci-sioning to digital algorithm based execution. Several digital changes have streamlined multiple areas within the Bank. “We have adopted analytics in all our marketing cam-paigns, strategic policy decision-ing, simple excel MI to visualisation applications, credit underwriting to scorecard and so on”, he adds.

Talking about analytics maturity at Yes Bank, Sundaram says “Analytics has still a long way to go within the

organisation where almost every action is driven basis data & infor-mation. Analytics would also help the Bank in driving Digital Transfor-mation with the use of algorithms and converting several manual pro-cesses to rule based processes”.

“The team has made a great start and has made its presence felt, but it has a significant task ahead to support our CEO’s vision of becom-ing finest quality large Bank in India by 2020”, he says in the concluding.

Our Analytics Team still is at nascent stage of existence since last 2 years; however it has infused its presence significantly in the Retail banking space which is now mainly driven by analytics. The journey of analytics from MI visualisation to Machine learning is growing in significant pace here at YES BANK.

“

- Ananad K Sundaram, Head- Credit Intelligence & Analytics,YES Bank

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aboutanalytics indiamagazine

Founded in 2012, Analytics India Magazine has since been dedicated to passionately champi-oning and promoting the analytics ecosystem in India. It chronicles the technological progress in the space of analytics, artificial intelligence, data science, big data by highlighting the innovations, players in the field, challenges shaping the future, through the promotion and discussion of ideas and thoughts by smart, ardent, action-oriented individuals who want to change the world.

Analytics India Magazine has been a pre-emi-nent source of news, information and analysis for the Indian analytics analytics ecosystem by covering opinions, analysis and insights on the key breakthroughs and developments in data-driven technologies as well as highlighting how they are being leverages for future impact.

With a dedicated editorial staff and a network of more than 250 expert contributors, AIM’s stories are targeted at futurists, AI researchers, Data sci-ence entrepreneurs, analytics aficionados and technophiles.

www.analyticsindiamag.com

aboutcartesianconsulting

www.cartesianconsulting.com

Cartesian Consulting is a global analytics servic-es firm specializing in customer, marketing and business analytics. They help brands across the world improve revenues and margins by helping them with data driven decisions, and utilization of machine learning and AI algorithms in their oper-ations.

Cartesian’s ability to put advanced analytics quickly into a business context and create impact from it is what sets them apart. They work in three modes where they, analyze data, act on it, and put it into an Industrialized “always on” solution, dive deep into a specific business problem and solve it and work to create a culture in an organization that is data driven and customer obsessed.

Their work has helped brands in Retail, QSR, Fi-nancial Services, Telecom, eCommerce, and Hos-pitality improve their toplines by 5-10%, Founded in India in 2009, and with offices in India, Singa-pore and North America, Cartesian today is a rap-idly growing 180 person organization working for over 50 brands in 10 countries.

This is an independent Study by Analytics India Magazine and Cartesian Consulting, and is based on

data publicly available or from sources considered reliable. The study is based on secondary data and

hence it does not represent that it is accurate or complete and hence should not be relied upon as such.

The opinions expressed herein are our current opinions, as on the date of this Report, and the data/

Report are subject to change without any prior notice. Nothing in this Study constitutes investment, legal,

accounting or tax advice or any solicitation, whatsoever. The subscriber/user assumes the entire risk of

any use made of this data/Report. The Report is for the personal information only of the authorised recip-

ient in India only, and holds no financial liability. Permission may be required from either or at least one of

the parties for reproduction of the information on this Report. All right reserved with the aforementioned

parties.

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State of analytics in domestic firms in India 2017 - by AIM & Cartesian Consulting

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