The market for consultancies and CRM professional services grew by 8 percent in 2008, according to Gartner Research, but that may not continue. Today's consultancies face a changing landscape of budget cuts and software-as-a-service (SaaS) reorientations. End user organizations are scaling back and focusing more on business processes."Consulting firms are going after much more than just the low-hanging fruit and, in fact, are going after projects that were, a few years ago, deemed too small to take on," offers Leslie Ament, associate director of information technology research with Kennedy Information. "The nature of the engagement is changing from end-to-end to more strategic and up-front."
"The real differentiation...[is] being able to scale down to the size and scope of today's [SaaS] offerings and therefore being more agile in [delivering] those services," says Jeff Kaplan, founder and managing director of ThinkStrategies. Many have had to restructure their hierarchies and retrain and rethink their go-to market strategies. And software vendors are developing professional service wings of their own. Will consultancies face another round of competition? Ament says right now it doesn't seem to be an issue, since vendor-consultants mainly target implementation and integration. "A software firm isn't going to...say, ‘What's your overall strategy for consumer products?'" she notes.
Accenture, the five-time winner from 2002 to 2008, fell out of the winner's circle last year and wasn't able to reclaim the spot in 2009, despite scoring exceptionally high in terms of services offered (a hefty 4.4 this year) and analyst praise for its knack for innovation and global proficiency. Here's the rub: Accenture landed a sub-3.0 score in the area of reputation for customer satisfaction (a tad lower than its score last year). Industry analysts say that the company gets valuable customer satisfaction points docked for recent customer references. In other words, the company is plagued with inconsistency.
Capgemini trailed the winner by fractions of a point this year. Gartner analyst Matthew Goldman wrote in his 2009 Magic Quadrant report on CRM Service Providers that Capgemini's module-based approach is increasingly appealing given today's desire for phased and broken-down implementations. "I find it refreshing that they've come up with a way to address business problems using a repeatable method that does not result in repeatable solutions," Ament says. She also notes that, although the firm is best known outside of North America, it takes a highly innovative approach that clients find appealing.
Solid scores in the vicinity of 3.4 helped Hitachi Consulting, 2008's One to Watch, sneak onto this year's leaderboard. Goldman writes that although still more of a niche player, Hitachi's growth outpaced the average market rate in 2008. "Hitachi Consulting possesses a combination of skills, which, when well integrated, exceeds the expectation of the market," he states in the report.
From a functionality standpoint, Ament says, "IBM [Global Business Services] has got everything." Consulting expertise rolled up with software expertise makes GBS a force to be reckoned with, the analyst says. The services-offered field saw a significant jump, from 3.8 to 4.6, but some saw breadth of resources as a double-edged sword. "The very thing that gives [IBM GBS] a high ranking for company direction and services also contributes to confusion for the client because there are just so many resources within IBM," Ament points out.
Last year's king of consultancies, Deloitte, retains the crown. Analysts praise the company for delivering exceptional customer service, but also a commitment to furthering its vision. Ament says that Deloitte paved the way for exploration into capabilities and service-line offerings that bring decision science and business intelligence into its approach to customer management. "Deloitte still has to their credit very experienced consultants," Ament says. "They hire folks who are highly intelligent and have experience in their area, and who are nice to work with.When I interview clients, it comes across." Deloitte differs from several consultancies in that it offers tax and auditing services. "When they approach any project-CRM, pure strategy, or operational management-they bring to the table that risk and audit [knowledge]," Ament points out. "It is a different approach and if I were a client, I might consider that a value-add." -Lauren McKay
One to Watch - Consultancies
Although laggards in visibility and depth, SaaS-focused consultancies received notable mentions from analysts this year. Although not at the same level of services and execution, ThinkStrategies' Kaplan says providers such as Bluewolf and Appirio should be on the radar. "[Bluewolf] is now recognized for more than just project-based work," he says, noting that the firm is "able to offer packaged SaaS solutions to meet specific industry requirements." He notes that the other future contender, Appirio, "not only does project work but...has a licensing arrangement where it can resell a more standardized version of those solutions via the [Salesforce.com] AppExchange."
CLICK HERE to view PDF of 2009 Market Leaders comparison chart.