Market research often provides corporations with an intangible, competitive advantage, yet such initiatives are often among the first items slashed from budgets in a downturn.
While no one tracks what percentage of corporate decisions are made on gut instinct rather than on hard facts, the good news is that the quest for measurement is forcing many executives to document or justify their decisions. Gut instinct may never go out of style, but research and analytics are becoming much more commonplace.
Consider the mobile-handset industry with its heated competition between players such as Nokia, Motorola and Samsung. Each company offers leading-edge features. So, as competitors they have to come up with strategies to maintain the one-upmanship. Undoubtedly, this requires new measures, which, without market research would be almost impossibly risky to implement. Given the cost of developing a new technological feature, which company can afford to miss more often than get it right?
While working with market-research firms has long been a common, corporate practice, these brainy service providers are going global in their quest to keep costs down and quality high. “Outsourcing laborious low-end jobs frees up associates in the home countries to focus on the high-end work of providing insights and value addition, which helps our firm compete in the market,” says Partha Rakshit, MD, AC Nielsen, South Asia.
As market-research firms expand their global operations, the governance responsibility swells just as quickly. “My organization has been outsourcing for probably about four years now. And, each year I can only see the market and the complexities growing,” says Jisoon Barton, SVP, Head of ViewsNet Operations, Synovate. “With the result, we are going beyond the basic level of data collection to include high-end analytics,” she says. (See Box titled In Conversation with Barton).
Ahoy! Going offshore
To some extent, market research has been a trailing-edge adopter of globally delivered services. “We started offshoring with a couple of basic areas, because of the increasing cost pressures from our clients and the industry as a whole,” says Clive Gibbins, Global Operations Director, GFK Custom Research. The bulk of work offshored has been low-value activities, including coding of master files and data processing.
However, with rapid change sweeping across every domain, market-research firms realize that there’s more to offshoring than vanilla labor-cost arbitrage. “It’s interesting to see the number of firms going offshore, not because it is cheaper, [but because] it changes the way you work,” says Gibbins. “There’s a scope to work 24x7 as clients need yesterday’s results for today’s work — almost as quick as that,” he adds. The share of value-added activities in TNS India’s Offshore Research Services Centre (ORSC), a captive of Taylor Nelson Sofres, for instance, is expected to peak to 50% from 20% in 2006, over a three-year period.
“No research company has won business from clients by showcasing its operational efficiency. For a market research company, the value lies in the front-end framing of the problem and analysis of data, to offer insight that commands value,” says Sunil P. Mirani, CEO, Ugam Solutions, an outsourcing market-research firm based in Mumbai, India.
