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Gartner Names the Top Service Providers
Magic Quadrant '07: This year's North American CRM service provider quadrant reveals Accenture and IBM GBS as the strongest implementation partners.
Posted May 17, 2007
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Accenture, Capgemini, Deloitte, and IBM Global Business Services were named the leaders in Gartner's "Magic Quadrant for CRM Service Providers, North America, 2007." While market share and strong revenue numbers continue to propel the North America-headquartered consultants, Asian providers like Infosys and Wipro continue to make inroads into the CRM market as vertical expertise, cost savings, and CRM domain know-how continue to propel their revenue rates above the market average, according to the report.

Of the leaders, Accenture continues to set the pace; the report cites the provider's higher-than-average growth rate in North America and its industry depth and process-specific focus in CRM. IBM Global Business Services lead all providers in completeness of vision, or the ability to understand buyers' needs and translate those needs into related services. Gartner noted IBM's breadth of CRM-specific expertise and technology/application services as attributes clients have found impressive. Capgemini's acquisition of Kanbay was noted for bolstering its financial services sector and received good marks for its industry expertise and business consulting. Deloitte rounded out the leaders quadrant, receiving kudos for its development and integration of methodologies that link the use of CRM software to business objectives.

With the exception of Bearing Point, Cognizant, and Hitachi Consulting, the challengers quadrant was lead by providers headquartered in Asia: Infosys Technologies, Tata Consultancy Services, and Wipro Technologies. Many of these offshore pure-play service providers continue to grow their CRM service revenue at rates exceeding the market average, although from smaller--yet not insignificant--revenue bases, according to the report. This growth comes as a result of a deepening focus on specific services, by industry or CRM domain, which is producing a greater value proposition to end-users, says Matthew Goldman, a Gartner research vice president, in the report.

Overall, the market experienced stronger annual growth (9.2 percent) in 2006 than it did in 2005 (6.2 percent). Although visible growth was more consistent, some consultants and systems integrators failed to take advantage of market conditions, as evidenced by small and large organizations failing to achieve average market growth rates, according to the report. "CRM solution implementation services are often the most expensive components of a CRM solution implementation," Goldman says in the report.

To help mitigate this, buyers continue to leverage global delivery models when shopping and purchasing consulting services, blending onsite, nearshore, and offshore capabilities, the report says. A recent Gartner study of 149 CRM initiatives in North America revealed that 46 percent of projects involve the use of offshore resources, up from 33 percent from a similar study in 2006. Although global delivery offers potential savings, Goldman says leveraging low-cost resources from offshore destinations for labor is not the only answer.

In related news, Accenture expanded its Marketing Sciences practice with the acquisition on Tuesday of MediaSenz, a media auditor based in Australia, for an undisclosed amount. As part of the deal, Accenture is also acquiring MediaSenz's proprietary software, MediaBiz, which lets companies track ad campaign performance without the help of a media agency.

The acquisition will help provide media auditing services in emerging markets like China, India, Mexico, and Russia, in which there is little or no reliable data on the effectiveness of ad spending, according to Accenture. "The acquisition of MediaSenz will allow us to reach leading markets in the Asia Pacific region and other emerging markets and help them benchmark the quality and cost of their media investments in a fragmenting yet rapidly growing communication landscape," says Jeffrey Merrihue, CEO of Accenture Marketing Sciences. "With markets in Asia--particularly in China and India--recording double-digit compound growth rates in advertising, we look forward to helping companies realize the value of marketing analytics in this fast growing region."


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