The 2007 Market Awards: Consultancies

The Market
Demand for CRM professional services remains strong -- and steadily increasing. In 2006, the North American CRM services market grew 9.2 percent (up from 6.2 percent growth in 2005), according to Gartner. Tighter integration with ERP and supply chain management software, the shift toward services-oriented architecture (SOA), the need to deliver a better "branded" customer experience, and the expansion of offshoring operations continue to drive this market. In addition, the deployment of software-as-a-service (SaaS) solutions within enterprise departments is pushing clients toward consultants, who "are staffing up to help companies tackle this hybrid approach by partnering with the Salesforce.coms of the world," says Bill Band, a principal analyst with Forrester Research.

The consulting landscape itself is changing, as the full-service global firms like Accenture and IBM Global Business Services are beginning to feel the pressure from the Asian offshore providers, such as Infosys Technologies, Tata Consultancy Services, and Wipro Technologies. These offshore pure-play service providers continue to grow their CRM service revenues at rates exceeding the market average, a disparity that can be traced to a deepening focus on vertical expertise, cost savings, and CRM domain know-how. This trend has left its mark on our results, because for the first time since 2003, our leaderboard has a new entry.

Consultancies: The Chart

One to Watch
BearingPoint has borne the brunt of Tata's success on our leaderboard, dropping out of the top five after three consecutive years. But its fall to this year's One to Watch could be as much its own fault, as BearingPoint "has been fading," according to one analyst. While the company continues to focus its services on specific verticals and the North American market, it still does not offer any CRM outsourcing services, and its CRM service growth rate for 2006 was below the market average, according to Gartner.

The Leaders
If consistency were the contest, then Capgemini would be the winner, as the company scored a 3.5 across all categories, guaranteeing it a spot in the top five. Capgemini expanded its North American practice in June by announcing its first dedicated BPO unit, based in Chicago, while the acquisition of Kanbay in October bolstered its CRM practice in the financial services sector. On the downside, some clients have reported inconsistent depth of skill in specific CRM technologies, processes, and industries, says Frances Karamouzis, a research vice president at Gartner.

Deloitte Consulting's hallmark signature has been customer service, and this year is no different, as the consulting arm of Deloitte Touche Tohmatsu scored a perfect 5 in customer satisfaction, obviously outpacing the rest of the leaders. Deloitte is the only large consultancy integrated with a global audit and tax firm to offer a full range of CRM services. This linkage provides "strong financial skills and a deep understanding of clients," Band says. Though Deloitte still isn't in the CRM offshoring business, its CRM revenue growth was above the market's average, and clients value the "customer value mapping" methodology Deloitte uses to guide engagements.

IBM Global Business Services remains a shortlist mainstay, despite receiving--for the second year in a row--the lowest score among the top five finishers in customer satisfaction. IBM says its strength in outsourcing means it can offer comprehensive CRM "business transformation outsourcing" for clients looking for transformative, not just operational, outsourcing solutions. In addition to its size, depth of skill, and global reach -- which rivals Accenture's -- IBM GBS can capitalize on its parent company's ongoing technology research and development efforts, Band says.

Tata Consultancy Services becomes the first offshore service provider ever to make the top five. The Indian giant's CRM offerings include strategy, implementation, and applications management--with particular strength in the latter two areas. "Tata's overall enterprisewide core revenue has reached critical mass," says Matthew Goldman, a research vice president at Gartner. "Its ability to capitalize on its reach by upselling and cross-selling CRM is at a healthy level." Its strength in implementation and application management could also be its weakness, however, as client feedback indicates Tata's industry knowledge and business process skills are below average, Goldman says.

The Winner
Accenture takes its fourth consecutive title, driven by global scale and reach, and industry-specific expertise--which, aside from IBM, is unrivaled in the industry, Band says. Consider its stout score of 4.5 in services offered and ability to execute, both highest among the leaders. The consultancy continues to capitalize on its nearly limitless channel power with technology vendors--on-demand providers now among them--and beefed up its Marketing Sciences practice with the acquisition of Mediasenz in May. If Accenture has a weakness, the only possible place for it lies with its willingness to tackle large, complex initiatives. That big-picture view tends to deter clients with smaller or more-focused projects, Karamouzis says.

--Colin Beasty

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