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Next For India? Business Analytics

Accenture is adding 8,000 positions to its Indian operations, a move that will push the outsourcer's total headcount on the subcontinent to about 50,000. Many of the new employees will work on business analytics tools. Last week, IBM opened a biz analytics lab in the country. Smell a trend yet?

"We are 42,000 right now and we imagine we will be about 50,000 by the end of 2010," said Accenture chairman and CEO William Green on Monday, according to national news agency Press Trust of India. PTI quoted Green while he attended this week's India Economic Summit, in New Delhi.

Accenture already employs more workers in India than at any of its other worldwide locations, including the U.S.

Green told PTI the bulk of the new hires would focus on developing solutions for the business analytics software market. Business analytics draws upon a mix of database tools and statistical packages to help companies identify important trends in areas like consumer demand and customer retention.

Accenture isn't the only Western outsourcer looking to India as a hub for business analytics development. IBM said Friday it opened a research center in the country dedicated to the creation of such tools.

IBM's Business Analytics Center of Competency, headquartered in the tech center of Bangalore, will employ more than 200 consultants skilled in applying business analytics and data mining techniques to complex information challenges and opportunities, IBM said.

Make no mistake--this isn't low-margin, end-of-life commodityware Big Blue is tossing over the border. IBM CEO Sam Palmisano last week told my colleagues Bob Evans and Rob Preston that the business analytics wave "is just at the beginning" and that the technology, along with cloud computing, will have a profound impact on the IT segment in the years ahead.

The reasons behind vendors' rush to India for their business analytics needs are pretty straightforward. The country offers an abundant supply of low-cost, highly skilled labor, and geographic proximity to growing emerging markets--including India's own burgeoning domestic economy.

To boot, the creation of business analytics tools takes more than just traditional software development skills, it also calls for high-end math capabilities given the emphasis on data mining, statistical sampling and forecasting. India produces about 690,000 math and sciences graduates each year, according to a study released Friday. The comparable number for the U.S. is 420,000.

It doesn't take a sophisticated business analytics package to predict those kinds of numbers will make India a destination of choice for high-end product development in the years ahead. "We think India is going to be a great place for us," said Green. "We have some core centers of excellence in the analytics space in the country."

It appears India Inc., like many of the vendors it hosts, is moving up the value chain.

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