Reetika Joshi, an analyst at ValueNotes Sourcing Practice, wrote a piece last fall predicting that insurance analytics could be the a major market for business process outsourcing (BPO). Joshi's discussion of the analytics opportunity for carriers still holds, but I'm less sure that it points towards outsourcing in the traditional sense.
With the rapid evolution of cloud services, organizations looking for the storage and processing power to run large scale analytics have a growing range of on-demand services at their disposal. Analytics is a "bursty" activity, meaning that analysts focus on different data sets of different sizes and complexity on an unpredictable schedule.
Unless we're folding BPO in with the cloud services market, I see cloud operators picking up this kind of business. And I'd argue that BPO ought to be more than (and different than) the cloud. BPO providers offer expertise as well as sheer power. The question is, will those who run analytics in insurance companies believe there's unique analytics expertise to be found in BPO suppliers? Or will they see themselves as the experts in their data – experts who could use the pay-as-you-go added capacity delivered by the cloud?
It seems to me that both types of supplier need to prove their utility in the field of analytics, but that the cloud guys have the advantage. BPO providers need to be looking at how they can add value above and beyond the heavy lifting.
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