Organizational Network Analysis - Market Size
While there were no precompiled industry reports available in the public domain pertaining to organizational network analysis (ONA) market size in the United States, we were able to come up with an estimated market value using a top-down market sizing analysis and triangulation through various methods, i.e. analyzing the global trend and applying it to the United States market, utilizing the broader segment of the market and assuming a similar trend in the specific segment, and using organizations' percentage adoption rate and average cost of ONA annually.
The estimated market size of organizational network analysis (ONA) in the United States is $31.7 million annually. Workforce analytics, the broader segment of ONA, was worth $194.86 million in 2016 and expected to grow at 15.3% CAGR until 2020. Below you will find detailed calculations, methodologies, and assumptions used in deriving these figures.
PEOPLE/WORKFORCE ANALYTICS MARKET SIZE
People analytics, also called talent or workforce analytics, are growing in terms of usage within organizations and undergoing a massive transformation. According to the latest Deloitte study, about 71% of organizations makes people analytics software (the broader segment of ONA) a high priority. Organizations are using "people data to understand every part of the business and embedding analytical tools into day-to-day decision-making."
Globally, workforce analytics recorded CAGR of 15.3% and this will continue until 2020. In 2015, the industry was worth $422.5 million, or about $487.14 million in 2016 [$422.5*1.153]. Of the total market size, the United States has a 40% share and is anticipated to reach over $660.0 million by 2025.
Workforce analytics market size for the United States
= $487.14 million * 40%
= $194.86 million
ORGANIZATIONAL NETWORK ANALYSIS (ONA) ESTIMATED MARKET SIZE IN THE UNITED STATES
A recent study by Deloitte reveals that "there’s been explosive growth" in the use of organizational network analysis (ONA), not just in the United States but worldwide. Organizations are using ONA to analyze "the behavior of high-performing teams, for example, generating insights that can be used to help other teams work more effectively." Key players or vendors include companies like TrustSphere, KeenCorp and Microsoft Delve.
As of 2016, 8% of companies were using ONA globally, with an additional 48% of companies experimenting with the use of ONA. If we are to assume that the adoption rate of 8% carries similar trend in the United States, and while the 8% will not provide a definitive market size for ONA as it is not clearly stated that the 8% is the share of ONA based on revenue, we will use this as a basis for an approximate estimate market size;
$194.86 million*8% = $15.60 million (estimated market size based on adoption rate and revenue)
Another way to estimate market size is to determine the number of companies using ONA and multiply it with the average annual cost of ONA per company or user.
For this research, we will only consider those companies that possibly have an HR department. According to Vault, there are currently more than 800,000 HR personnel and they generally exist in the mid-to-large organizations. According to the latest US Census Bureau report, there are about 108,943 firms belonging to the mid-to-large companies (100 employees and above) as of 2015. Since most large companies have multiple offices in various locations and assuming that every office has one representative HR department, we will consider here the total number of establishments that was created by these companies. The total number of establishments from mid-to-large organizations was 1,651,098. Using the 8% to determine figures of total ONA users;
1,651,098 * 8% = 132,088 total establishments using ONA, or total ONA users
To determine the average cost of ONA system per user, we employed TrustSphere's pricing. TrustSphere, one of the top companies in this industry, is charging its clients $20 per user per month. That translates to $240 per user annually [$20*12]. Using this price point to estimate market size;
Estimated ONA market size = 132,088 * $240 = $31.7 million
From the above findings and calculations presented, we can confidently assume that the market size for organizational network analysis in the United States is close to $31.7 million. If the additional 48% who are experimenting ONA would decide to adopt it in their organization, that would translate to about $190 million revenue.
1,651,098 * 48% * $240 = $190 million (The possible revenue that could be created from the additional 48% if they decide to adopt ONA.)
The estimated market size of ONA in the United States as of 2016 was $31.7 million. This was based on the 8% ONA adoption rate among organizations. Assuming that the additional 48% organizations would decide to adopt ONA in their system, that would roughly translate to more than $190 million revenue.