Salaries for data scientists and analytics professionals in Australia surged 14%, from AU$110,000 to $125,000, in 2014. And for those alchemists with core skills in social data, the mean salary tipped the scales at $200,000, more than three times the national average wage Down Under.
These figures for Asia-Pacific’s most advanced digital market, revealed in a recent study by the Institute of Analytics Professionals of Australia (IAPA), are indicative of a broader issue in the region: Demand for data scientists is outstripping supply, driving costs through the roof and stymying the uptake of data-driven decision-making.
The surge in wages, however, may be short-lived as it hastens a switch to outsourcing, which “is seeing more and more requests from businesses for data collection, analytics, and visualization,” according to Anna Frazzetto, senior vice president and managing director for international technology solutions at global executive recruiter Harvey Nash.
“[The] offshoring of data science and analytics is a rapidly rising trend in the outsourcing and offshoring industry, and it’s a direct result of the push in recent years by businesses worldwide to collect, analyse, and make the very most of their big data,” Frazzetto said. “In fact, if you have data science skills and experience, you can just about write your own ticket when it comes to finding a great job.”
Tracking The Trend
Other industry analysts concur. In the report “Market Trends: Pressure to Achieve High Performance and Lack of Talent Drive Managed Analytic Service Adoption,” for example, Gartner stated: “Skills are ... more readily available in mature countries, such as Australia and Singapore. Organisations in these countries are more focused on building strong IT architecture and leveraging new technologies as enablers for enhanced data insights and analytic capabilities.”
However, Gartner reported, “Emerging markets, such as China, India and South-east Asia (with the exception of Singapore), may leapfrog [mature countries] in adopting new technologies to mine and make use of diverse sets of data from multiple sources, but they are more constrained by a lack of skills.”
Sri Annaswamy, founder and director of Sydney-based Swamy and Associates, also recognised the surging demand.
“Analytics outsourcing is the fastest-growing part of the outsourcing industry,” Annaswamy said. The early impetus came from markets such as the U.S. and the U.K., he added, where companies have been experimenting with analytics outsourcing for up to three years.
While cost is a driver for growth, it is not the only—or necessarily the main—one, he said. “It's about finding people with sufficient skills to deliver this on a large scale,” Annaswamy explained.
The outsourcing trend is still in its early days, added Evan Stubbs, a director on the IAPA board. “There’s an understandable hesitation around handing one of your biggest differentiators to someone else,” Stubbs said. “However, that needs to be balanced against the skills shortage. There isn’t a company out there that’s doing everything they’d like to, and skills-based services, like outsourcing or partnerships, are attractive shortcuts to new opportunities.”
Searching For Value
As with anything, finding good value will be critical.
“The single thing to remember,” Stubbs said, “is that differentiation comes from three places: creativity, cost, and quality. Without creativity, you’re missing the disruptive opportunity of analytics. Without competitive cost, you’re reducing your return. And without quality, your customer experience will suffer. Outsourcing is an option, but know what you’re looking for.”
Walter Adamson, general manager of specialist digital strategy company KINSHIP digital in Victoria, echoed those sentiments. “There’s no doubt that major workloads of data analytics can be offshored, but it’s important to understand the different types of data analytics and also to have a proper outsourcing strategy,” he said.
Adamson cited three “key forms” of data analytics: descriptive, predictive, and prescriptive, with descriptive analytics being the largest segment and especially important for marketers. He identified countries such as India and Vietnam as well-suited to be major descriptive analytics offshoring centres.
For the analytics outsourcing market as a whole, Adamson cited India, China, and Eastern Europe as the main contenders, although some emerging destinations, such as the Philippines, Vietnam, Russia, Ukraine, and China, could severely test this dominance.
“India has many of the dominant outsourcers, who have grown their business significantly over the last decade,” he explains. “Important names like Wipro, Infosys, TCS, HCL, HP, Genpact, Evalueserve, and J.P. Morgan are now providing holistic solutions for business problems via combining analytics and market research.”