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Scoring results Accenture

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Application Management I UK I 2013

Leading Providers of Application Management in the UK 2013 SITSI I Vendor Analysis I PAC RADAR

SITSI I Vendor Analysis I PAC RADAR I Application Management I UK I 2013 2

© PAC 2013 – unlimited reprint rights – Accenture –

Table of contents

Objective of this report ......................................................................................................................... 4 Report license ........................................................................................................................................ 5 Introduction ........................................................................................................................................... 6 Application management – definition ................................................................................................. 7 PAC RADAR methodology ................................................................................................................... 8

Introduction to the methodology .......................................................................................................... 8 Evaluation methodology in the PAC RADAR ..................................................................................... 11 General PAC methodology ................................................................................................................ 14

PAC RADAR: the leading providers of application management in the UK 2013 ......................... 15 Positioning within the PAC RADAR ................................................................................................... 16

Scoring results Accenture .................................................................................................................. 17 “Best in Class”: Accenture (final grade: 1.59) .................................................................................... 17

About Pierre Audoin Consultants (PAC) ........................................................................................... 18 About the PAC RADAR ....................................................................................................................... 18



Document information

Author: George Mironescu

Co-authors: Nick Mayes

Publication date: September 2013

Last update: n/a

Scope ID: Application Management I UK I 2013

Portfolio ID: SITSI I Vendor Analysis I PAC RADAR

Related Reports: SITSI I Vendor Analysis I PAC RADAR | AM France/Germany

List of figures

Clusters and sub-clusters of the PAC RADAR according to which the providers are evaluated ............ 8 Description of the PAC methodology .................................................................................................... 14 The PAC RADAR for Application Management in the UK 2013 ............................................................ 15



Objective of this report

The purpose of the PAC RADAR from the market research and strategic consultancy Pierre

Audoin Consultants (PAC) is to provide a holistic evaluation and visual positioning of leading IT

providers within a defined services segment on a local market. Using predefined criteria, the

providers’ revenue volumes and development and market share are assessed and compared

alongside their performance and specific competences in the relevant market segment.



Report license

PAC RADAR “Leading Providers of Application Management in the UK 2013”

PAC RADAR report license – unlimited reprint rights

Within the framework of the license with unlimited reprint rights the customer receives a PAC

RADAR short report and a PAC RADAR graphic. Their usage and distribution to external parties

is expressly permitted, without any limitations. The customer is entitled to use the contents of this PAC

RADAR short report as well as the PAC RADAR graphic, either completely or partially (e.g. individual

text sections or graphics), for all marketing and communications purposes.

In any usage and distribution, all contents of the PAC RADAR short report and the PAC RADAR

graphic must always be marked with the “PAC” source reference. However, the contents must not be

manipulated or deployed in such a way that changes the context.

The usage rights defined within the license with unlimited reprint rights refer to the PAC RADAR short

report and the PAC RADAR graphic, however, under no circumstances include the usage of the

contents of the full version of the PAC RADAR report.

In addition, the PAC RADAR copyright terms and conditions apply (see “About the PAC RADAR” on

the last page of this document).



Introduction

Over the last years, the number of different applications used within an organization has

significantly increased. Accordingly, the number of interfaces, security patches and release

upgrades that need to be managed has increased as well. At the same time, companies need to

monitor and evaluate new innovative technologies and solutions that become available on the

market. The maintenance of such complex application landscapes with economic constraints

represents a major challenge for many companies. Furthermore, this requires matching the demands

of subject matter experts with technological progress as well as economic and legal conditions. Due to

a mostly fix allocation of resources, companies are more and more requesting support from external

service providers.

This type of service is called application management and this market has reported strong growth

rates in the UK in recent years. While in the past this sub-segment of the outsourcing market was

regarded critically by IT users and companies, cost pressure and limited availability of adequate

internal resources have meanwhile resulted in an increasing acceptance of this topic.

The market for stand-alone application management in the UK has reached a volume of

GBP 2.3 billion. This does not include those application management services that are part of more

comprehensive outsourcing agreements. PAC estimates the total market volume of application

management in the UK to amount to GBP 3.8 billion. In this highly dynamic market environment,

various service providers compete for a good positioning. The PAC RADAR “Leading Providers of

Application Management in the UK 2013” evaluates their capabilities and positions these companies in

the UK provider landscape.



Application management – definition

This PAC RADAR focuses on the topic of application management in the UK.

Application management (AM) describes the maintenance and enhancement of existing

applications, sometimes even their initial development, under a long-term (multi-year) contract

with a commitment to fulfilling pre-defined service level agreements (SLAs) on a fixed-price basis,

often complemented by a variable pricing component. Often, staff is transferred.

In this PAC RADAR, PAC considers both stand-alone application management as well as

application management embedded in application outsourcing, business process outsourcing or

complete outsourcing deals. Compared to outsourcing in general, stand-alone application

management in particular differs as to the scope: Whereas complete outsourcing, application

outsourcing and business process outsourcing (including embedded AM!) comprise the takeover of

infrastructure, applications and business processes over the entire service value chain, stand-alone

application management only covers the maintenance and enhancement of the applications in

question without taking over the infrastructure.

Unlike project services in general, the application management contracts analyzed in this PAC

RADAR do not involve pure development or implementation, but only support and further

development. In terms of duration, stand-alone application management contracts usually run for 1 to 5 years whereas embedded application management contracts typically run for more than 3 years as

part of long-term outsourcing contracts.



PAC RADAR methodology

Introduction to the methodology

The aim of the PAC RADAR is to aid the holistic evaluation of IT providers. PAC publishes the

PAC RADAR two to four times per year for different segments. Every PAC RADAR targets a

specific IT services sector, for which up to 15 leading providers in a local market are assessed.

In the PAC RADAR, the performance, competence and market position of the key providers in a

services segment are assessed and compared using approx. 50 pre-defined criteria.

The criteria are arranged according to clusters and can be assigned to the main features,

"Competence" and "Relative Market Strength" as well as the underlying clusters and sub-clusters (see

the graph below). There is an overall rating from the evaluation of the criteria as well as sub-ratings

per cluster and sub-cluster.

With the help of the weighted evaluation of all criteria and the resulting overall rating, each provider is

given a characteristic position in the PAC RADAR (see chapter “Position within the PAC RADAR). The

following applies to the PAC RADAR:

The better the evaluation for competence and relative market strength, the closer a provider is

to the center.

The closer to the center a provider is, the closer the provider is to customer requirements for that segment.

Clusters and sub-clusters of the PAC RADAR according to which the providers are evaluated

© PAC

Competence

Know-how & Expertise

Offering & Sales

Delivery & Support

Strategy & Stability

Skills & Qualifications

Experience

Value of Offering

Quality of Sales & After-Sales

Maturity & Quality of Delivery

Local & Global Support

Importance of Topic for

the Supplier

Company’s Stability

Market Power

Performance

Relative Market Strength

Main Cluster

Cluster

Sub-Cluster

Evaluation of Criteria at Cluster and Sub-Cluster Levels



SAMPLE CRITERIA FOR “APPLICATION MANAGEMENT IN THE UK 2013”

Cluster 1 “Know-how & experience”: Knowledge/ qualification

• History in application management – global & local

• Strength of resources and level of experience

• Maturity mix of consultants - global & local

Cluster 1 “Know-how & experience”: Experience

• Industry coverage – global & local

• Strength in focus industries - global & local

Cluster 2 “Offering & sales”: Value of portfolio

• Breadth of portfolio

• Ability to provide AM transformation

• Coverage of software expertise (packaged, custom-specific, ...)

Cluster 2 “Offering & sales”: Sales & after-sales quality

• Maturity of sales organization & innovation in pricing models

• Sustainability of customer relationships

• Bidding process - rating by customers

• Account management - rating by customers

Cluster 3 “Delivery & support”: Maturity and quality in delivery

• Global delivery organization - overall rating

• Maturity of GDN (virtualization, methods, processes, tools, ...)

• Ability to provide business transformation

• Industrialization of GDN (degree of shared services)

• Certifications

Cluster 3 “Delivery & support”: Local & global support

• Ability to serve global customers

• Flexibility (regarding sales & delivery)

• Focus on medium-sized customers



Cluster 4 “Strategy & stability”: Significance of the offering for the provider

• Capabilities in stand-alone & embedded AM

• R&D investments

• Significance of local AM business in WW revenues

Cluster 4 “Strategy & stability”: Company stability

• Financial stability

• Dependence of few large customers – global & local


Cluster 5 “Relative market strength”: Market position

• Revenue and market share

• Strength of references

• Strategic partnerships

Cluster 5 “Relative market strength”: Performance

• Deal track record - local

• Revenue growth over past 3 years

• Overall customer satisfaction - rating by customers



The following companies have been positioned in the PAC RADAR “Leading Providers of Application

Management in the UK 2013”:

Accenture

Atos

Capgemini

CSC

HP

IBM

CGI

Tech Mahindra

Steria

Tata Consulting Services (TCS)

Wipro

The following assessments are based on a comparison within the peer group, i.e. these leading

providers among one another.

Evaluation methodology in the PAC RADAR

The evaluation of every provider is carried out on the basis of an extensive voluntary disclosure form, an assessment of the provider by their customers, and supplementary estimates based on tried-and-tested PAC methodology.

Voluntary disclosure by the providers

In the voluntary disclosure process, the providers were asked about aspects such as topic-oriented

experience, skills and resources, portfolio, service provision, sales structures, customer focal points

and other relevant issues, such as the degree of standardization in their services.

The providers were asked to give their view on, among others:

• Their history in the AM business and partnerships

• Certifications, resources, and project experience

• Portfolio, service provision, and quality management

• Sales trends and investments

Information from the providers’ local end customers

Apart from the voluntary disclosure process, evaluations from AM customers were also considered. However, not all providers submitted four customer evaluations. As a result, for the rating we considered not only the evaluations themselves, but also the number of submitted evaluations. With fewer than four customer evaluations, the rating was set at average, i.e. with statements of “satisfactory” or “service provision in accordance with agreement.

Submitting customer evaluations thus provided an opportunity to rise above mediocrity. If more than

four customer evaluations were submitted, we used the four best grades for the final evaluation.

The providers were evaluated by their customers using the following criteria for a grading scale of 1.0

(“agreement clearly exceeded” or “extremely satisfied”) to 5.0 (“clearly fallen short of agreement” or

“very dissatisfied”):



SUBJECTS FOR CUSTOMER EVALUATION (INCL. EXAMPLE CRITERIA)

Quotation phase

• Reaction time, completeness

• Comprehensibility, transparency

• Flexibility/ innovation: Pricing structure/ models

• Level of coverage with the requirements

• Pro-active approach

• Consulting services during pre-sales phase

• General behavior/ communication

Account management

• Response to change requests

• Availability of account manager

• Reaction time of account manager

• Specialist competence of account manager

• General behavior/ communication

• Behavior in the event of escalation/ under stress

Service provision

• Budget and deadline compliance

• Realization of requirements

• Quality of results

• Specialist competence (technology & processes)

• Industry competence

• Teamwork with the customer

• Proactive approach, contributing innovation

• Implemented methods & tools

• Project management competence

• Knowledge transfer

• If applicable: Collaboration with offshore resources



Weighting of the criteria

CRITERIA FROM THE VOLUNTARY DISCLOSURE PROCESS AND CUSTOMER EVALUATION

WITH HEAVIER WEIGHTING


• Strength in focus industries - local

• Breadth of portfolio



• Bidding process - rating by customers

• Account management - rating by customers

• Maturity of global delivery network (virtualization, methods, processes, tools, …)

• Industrialization of global delivery network (degree of shared services)

• Service provision - rating by customers

• Level of attrition

• Significance of offering in local market

• Significance of local AM business in WW revenues

• Overall customer satisfaction - rating by customers



General PAC methodology

The following overview describes PAC's methodology for market analysis and key differentiation

features.

Description of the PAC methodology

Local research and face-to-face communication are two core elements of PAC’s methodology. In our

market studies, we can draw on over 35 years of experience in Europe.

SUPPLY DEMAND

Vendor database

IT user database

Market volumes

Market forecasts

Face-to-face and phone

interviews Quantitative results

Qualitative approach

Situations and trends

Quantitative approach

Situations and trends

Quantitative data

Quantitative approach

Qualitative approach Face-to-

face and phone

interviews

Bottom-up methodology Top-down methodology

PAC references 35+ years of data tracking

Macro-economic data/statistics Market modeling

Key vendors, key market segments, key success factors, key trends



PAC RADAR: the leading providers of application management in the UK 2013

The PAC RADAR for Application Management in the UK 2013



Positioning within the PAC RADAR

Positioning within the rings

Using the calculated overall grade, each provider receives a characteristic positioning within a PAC

RADAR ring. The following applies here: The closer the position is to the center, the closer the

provider is to the customer requirements for that segment.

The "customer requirements" at the center represent a cross-section of the market; the position of the

provider represents the completeness with which the provider's offerings and competence correspond

with the requirements of all potential customers; i.e. purely German clients, international key accounts

and SMBs alike.

The providers have been positioned with the 1st ring (inside) to the 4th (outside).

The PAC RADAR rings have the following attributes:

• 1st ring: "Best in Class" (grade between 1 and 1.99)

• 2nd ring: "Excellent" (grade between 2 and 2.99 )

• 3rd ring: "Strong" (grade between 3 and 3.99 )

• 4th ring: "Solid" (grade between 4 and 4.99)

Positioning around the ring

The position of a provider along a ring does not represent an evaluation but additional information. It

indicates the provider's specifications within the core business:

• National vs. international: a rather national business focus in application management vs. a

rather international business focus (referring to the share of application management

revenues in the UK in total application management revenues globally).

• Stand-alone vs. embedded application management: business focus is rather on stand-alone

application management or rather on embedded application management (referring to the

share of stand-alone application management revenues in total application management

revenues in the UK).

Size of the circles

The size of the circles denotes the market strength of the provider, i.e. the revenue and market share

of the relevant provider in terms of application management in the UK.



Scoring results Accenture

In the following, those criteria are highlighted have led to a considerably better evaluation of Accenture compared to all other providers under assessment or have led to a downgrading in comparison.

“Best in Class”: Accenture (final grade: 1.59)

ABOVE-AVERAGE EVALUATED CRITERIA


• Ability to provide business transformation

• Industry coverage – local

• Strength in focus industries – local

• Industry coverage – global


• Maturity of sales organization

• Sales organization - overall rating

• Innovation in pricing models

• Global delivery organization - overall rating

• Maturity of GDN (virtualization, methods, processes, tools, ...)

• Capability of service delivery

• Ability to deliver large deals

• Focus on large customers

• Ability to serve global customers

• Capabilities in stand-alone AM

• General company stability - PAC estimation

• Strategic partnerships

CRITERIA THAT HAVE LED TO A DOWNGRADING

• Maturity mix of consultants - global & local

• Transparency towards (local) market

• Flexibility (regarding sales & delivery)

• Ability to deliver small deals



About Pierre Audoin Consultants (PAC)

From strategy to execution, PAC delivers focused and objective responses to the growth

challenges of Information and Communication Technology (ICT) players.

Founded in 1976, PAC is a privately held research & consulting firm for the software and ICT

services market.

PAC helps ICT vendors to optimize their strategies by providing quantitative and qualitative market

analysis as well as operational and strategic consulting. We advise CIOs and financial investors in

evaluating ICT vendors and solutions and support their investment decisions. Public institutions and

organizations also rely on our key analyses to develop and shape their ICT policies.

For more information, please visit http://www.pac-online.com.

About the PAC RADAR

The PAC RADAR is protected by Pierre Audoin Consultants (PAC)’s copyright.

The PAC RADAR is a graphical representation and written analysis of the positioning of various IT

suppliers within a defined market segment at a specific point in time. The positioning and

characterization of selected companies within the PAC RADAR is conducted on the basis of an

analytical assessment of criteria which PAC previously defined for this analysis.

The selection, positioning, and characterization of companies within the PAC RADAR is not subject to

any vested interests whatsoever. PAC does not support any suppliers that are represented in the PAC

RADAR, and does not give any recommendations to technology users. The PAC RADAR represents a

result from market research only and must not be taken as a recommendation for action.

The contents of the PAC RADAR have been created with utmost diligence and care. However, PAC

cannot be held responsible for any errors or omissions.

PAC excludes all express or implied claims, also if derived from warranties with respect to the PAC

RADAR report, including any implied warranties of merchantability or fitness for a particular purpose.

The PAC RADAR may only be used for a license fee and with the consent of PAC. Moreover, the use

and publication of the contents and the results of the PAC RADAR are subject to the “Terms &

Conditions of Pierre Audoin Consultants (PAC) for the Use of PAC RADAR Licenses”.

Copyright Pierre Audoin Consultants (PAC), 2013. All rights reserved.
http://www.pac-online.com

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