{"id":4003,"date":"2017-06-07T07:57:00","date_gmt":"2017-06-07T07:57:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/fractal-plugs-consulting-gap-4i-acquisition_060717\/"},"modified":"2017-06-07T07:57:00","modified_gmt":"2017-06-07T07:57:00","slug":"fractal-plugs-consulting-gap-4i-acquisition_060717","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/fractal-plugs-consulting-gap-4i-acquisition_060717\/","title":{"rendered":"Fractal plugs consulting gap with 4i acquisition"},"content":{"rendered":"<p>Fractal Analytics&rsquo; bets, on AI and machine learning as its future, are set to be bolstered with its <a href=\"http:\/\/www.prnewswire.com\/news-releases\/fractal-analytics-acquires-chicago-based-strategy--analytics-firm-4i-inc-625650084.html\" target=\"_blank\" rel=\"noopener\">new acquisition<\/a> of consulting and analytics firm 4i Inc.&nbsp;<\/p>\n<p>We noted in 2014 in <a href=\"http:\/\/www.hfsresearch.com\/pointsofview\/profiling-analytics-rising-star-fractal-analytics\" target=\"_blank\" rel=\"noopener\">Profiling An Analytics Rising Star: Fractal Analytics<\/a>, that &ldquo;Fractal is now more bullish about its analytics consulting presence onshore, and its technology investments &ndash; a clear aspiration to move away from the offshore analytics model&rdquo;. Our interactions and observations of the service provider since that time &#8211; including this latest announcement &#8211; seem to confirm our hunch about this pivot.<\/p>\n<p>As one of the last few pure-plays left in the analytics services business, Fractal has come a long way from 2000 when it was set up in Mumbai, India to tackle niche analytics projects for U.S. based banks and consumer goods companies. It now has a global presence in 12 locations, serving well-known global brands such as Philips, Kimberly Clark and P&amp;G. Fractal was already growing rapidly (e.g. it has grown at 60% CAGR over the last six years). We expect this move to add to their topline growth with an expanded base of U.S. clients and front-end consulting capabilities to aid sales efforts. In the last few years, it has aligned resources towards a long-term growth strategy focused on high-touch client interactions and machine learning and AI technology-led solutions.<\/p>\n<p><img decoding=\"async\" src=\"\/storage\/app\/media\/Reetika\/Fractal analytics.png\" \/><\/p>\n<p><strong>Increasingly high-touch local interactions supported by global network<\/strong>&nbsp;<\/p>\n<p>Along these lines, Fractal&rsquo;s acquisition of 4i is interesting because it:<\/p>\n<ul>\n<li><strong>Brings CPG consulting chops:<\/strong> Analytics consulting was the critical missing piece for Fractal as it rounded out its services portfolio. With clients like Colgate, Kraft foods, Post, and Del Monte, 4i&rsquo;s focus on CPG is evident. Its &ldquo;foresight-driven approach&rdquo; will align well with Fractal&rsquo;s focus on predictive analytics that can help clients be more proactive vs. reactive with their analyses and decision making.<\/li>\n<li><strong>Improves client collaboration:<\/strong> 4i&rsquo;s capabilities add to the high-touch client interactions that strategic analytics initiatives need to be successful. Fractal&rsquo;s clients love the attention they get from the service provider&rsquo;s management team and its long-standing relationships are a testament to this culture. 4i&rsquo;s presence in a central location in the U.S. (Chicago) will help deepen client relationships. More importantly, this onshore presence will help Fractal&rsquo;s analytics services be more impactful. A lot of analytics clients value &ldquo;high touch&rdquo; engagements where analysts can spend more time on-location to really understand business context and priorities and with the operations teams to get the best results.<\/li>\n<li><strong>Extends the delivery network:<\/strong> 4i brings operations presence in Ukraine and Mexico, which Fractal will need to build out a diversified and global delivery backbone. Analytics talent in India is increasingly in short supply as every IT service provider, analytics startup, and enterprise IT organization tries to scoop up analysts, statisticians and data scientists in the major cities. Add to it the smaller subset of machine learning and AI specializations that Fractal will need going forward, and you can see why tapping other talent hubs around the globe makes sense.<\/li>\n<\/ul>\n<p><strong>How this local\/global expertise is complemented by artificial intelligence<\/strong><\/p>\n<p>These factors will bring some significant advantages to Fractal, particularly as it rolls out its strategy for incorporating machine-learning into its analytics solutions. Fractal has spent the last two years building out its product portfolio of machine-learning solutions and even reorganized its management structure to give it more focus. Its solutions present &ldquo;here and now&rdquo; practical applications to enterprise challenges around infusing insights into every business decision. For example, Fractal Analytics&rsquo; Trial Run solution helps teams run experiments on their existing datasets, to see the potential benefits before rolling out to a wider base. Its Customer Genomics &ldquo;hyperpersonalization&rdquo; platform is helping companies target customers with more relevant and meaningful dialogues based on individual wants and needs. Enterprise clients that are working with Fractal on these solutions have mentioned to us how valuable their partnership is to access and explore machine learning technology together in these early days.<\/p>\n<p>That word &ndash; partnership &ndash; is a great way to describe the type of engagement that enterprises need with their technology and service providers to build out AI applications today. As my <a href=\"http:\/\/www.horsesforsources.com\/blog\/reetika-joshi\/Not-So-Elementary-For-IBM-Watson-Buyers_060517\" target=\"_blank\" rel=\"noopener\">recent<\/a> blog post on IBM Watson services pointed out, &ldquo;Cognitive technology falls in the &#8216;innovation&#8217; realm for most enterprises. It requires thorough experimentation, risk\/opportunity assessment, project prioritization, steep learning curves on skills development, and above all, education and change management for the employee\/customer base that is involved in the process.&rdquo; Consulting capabilities are thus a critical part of this journey for any hopeful AI service provider. With this tuck-in acquisition, Fractal is playing catch-up to its competitors such as Mu Sigma and Accenture, whose consulting capabilities are at the forefront of their analytics services businesses.<\/p>\n<p><strong>The outstanding challenge is just that: how to stand out, particularly against better-known brands with similar capabilities<\/strong><\/p>\n<p>Fractal has already made investments in the actual technology, including its own R&amp;D, and acquisitions of Imagna and Mobius Innovations in the last couple years. It has the foundational client relationships that it can leverage. 4i will help it bring all these capabilities together. However, there are several emerging AI-based personal assistants, personalization platforms, etc. that Fractal is competing with through its product group. Its key challenge will be differentiating itself in this new and increasingly crowded market.<\/p>\n<p>What Fractal needs to do next is craft a vision for its AI applications and services specifically within its key verticals of CPG and BFSI instead of the familiar trap of becoming a generalist. 4i has complementary vertical strengths and Fractal will do well to leverage these and build out what HfS calls <a href=\"http:\/\/www.horsesforsources.com\/rpa-is-dead-long-live-intelligent-automation\" target=\"_blank\" rel=\"noopener\">vertically-infused insights<\/a>. Overall, we give this acquisition a &ldquo;thumbs up&rdquo; verdict at HfS, with an eye on how Fractal articulates its value as a more comprehensive analytics services provider going forward.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fractal Analytics&rsquo; bets, on AI and machine learning as its future, are set to be bolstered with its new acquisition&#8230;<\/p>\n","protected":false},"author":11,"featured_media":4004,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[852,838],"tags":[132],"ppma_author":[21],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fractal plugs consulting gap with 4i acquisition - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/fractal-plugs-consulting-gap-4i-acquisition_060717\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fractal plugs consulting gap with 4i acquisition - 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