forrester swot the evolution of it service providers

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Making Leaders Success ul Every Day

Ju e 22, 2009 | Updated: Ju 16, 2009

SWOT: The Evo utio O IT Se viceP ovide s To Busi ess Tech o ogCo petito sb Ch is A d ews

o Ve do St ateg P o essio a s
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2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. In ormation is based on best availableresources. Opinions refect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar,and Total Economic Impact are trademarks o Forrester Research, Inc. All other trademarks are the property o their respective companies. To purchase reprints o this document, please email clientsupport@ orrester.com . For additional in ormation, go to www. orrester.com.

Fo Ve do St ateg P o essio a s

ExECUTIVE SUmmAryTe market or traditional I services will change dramatically over the next ve years as more vendorsrealize the bene ts o aligning their technology solutions with the needs o business customers. Unlikeother technology trends that come and go, the emergence o a di erentiated business technology (B )marketplace will be characterized by evolution involving power ul longtermtechnology trends andnear-term technology disruptions. In the next ve years, the market or such services will becomeincreasingly competitive as more I vendors seek to push themselves deeper into the core processeso their customers by aligning with business needs. Our study o our leading I services rms thathave adopted a business ocus in their strategies, products, and go-to-market approaches reveals thatcompanies are nding new ways to create alignment with business customers and in the process,expanding the de nition and limits o the technology marketplace.

TABlE O F COnTEn TSThe Evolution Of IT Services To BusinessServices Continues

The Co pa ies At A G a ceB oade ma ket T e ds

Accenture Creates Business Value Through AConsulting Driven A roach

Ca gemini Focuses On The CollaborativeBusiness Ex erience

Cogni ant Is Moving U In The Mar etThrough A Vertical Mar et Focus

IBM Brings Scale And A Full Set Of Ca abilitiesTo The Business Customer

Su lemental Material

nOTES & rESOUrCESFo este i te viewed a d co ected i o atio

o the ou ve do s p ese ted i this

docu e t: Acce tu e, Capge i i, Cog iza t Tech o og So utio s, a d IBm.

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The Th ee A chet pes O Se vice P ovide sSepte be 5, 2008

Ju e 22, 2009 | Updated: Ju 16, 2009

SWOT: The Evo utio O IT Se vice P ovide s ToBusi ess Tech o og Co petito s

The Busi ess Tech o og O e i gs O Acce tu e, Capge i i, Cog iza t, A d IBm This is the f st docu e t i the Evo utio O IT Se vices se ies.by Chris Andrewswith Jo atha Pe , Pasca matzke, a d Edwa d radc i e

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2009, Fo este resea ch, I c. rep oductio P ohibitedJu e 22, 2009 | Updated: Ju 16, 2009

SWOT: The Evo utio O IT Se vice P ovide s To Busi ess Tech o og Co petito s Fo Ve do St ateg P o essio a s

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THE EVOLUTION OF IT SERVICES TO BUSINESS SERVICES CONTINUES

Forrester sees an important trend in the evolution o the technology market: I service providers areincreasingly concentrating on providing business- ocused solutions to their customers. 1 While Idepartments still play the primary role in the purchase o technology, several vendors havedeveloped o erings around the act that line-o -business input is what drives many purchasingdecisions and technology is most e ective when it enables business results. Tese companies areengaging more requently in business services including process consulting, trans ormationservices, system integration, business process management, and business process outsourcing (BPO)

and in the process are making technology more strategic or businesses (see Figure 1). 2

For years, leading companies in the I services marketplace like Accenture, Capgemini, and IBMhave based their value propositions on the ability to provide comprehensive technology solutions.While many I service providers o er complete technology services, these three rms distinguish

themselves through their end-to-end technology services and their proactive business- ocusedmarketing approach. At the same time, these companies are acing new competition rom muchsmaller I companies like Cognizant that recognize that perhaps the best opportunity to createdi erentiation and value amid a new wave o global competition is through increased businessalignment. In the uture, we expect these traditional I services players to compete moreaggressively with more traditional business service companies like Deloitte.

o explore how these our companies are pursuing a strategy based on alignment with business needs,Forrester has prepared an overview o each companys strengths, weaknesses, opportunities, andthreats (SWO ). We explore actors related to each companys strategy, solutions, and go-to-marketapproach. We also review how each company is reacting to key market trends, competitive dynamics,and customer perception. Tis analysis is intended to be a qualitative review o general capabilitiesand di erentiation in the I services marketplace, rather than a directly comparative determination o which vendor is best and di ers signi cantly rom other Forrester methodologies like the ForresterWave in this regard.3 It places ocus on each vendors unique characteristics, which we hope willlead to a more in ormed understanding o how leading vendors are expanding the market or theirtechnology services.


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2009, Fo este resea ch, I c. rep oductio P ohibited Ju e 22, 2009 | Updated: Ju 16, 2009


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Figure 1 The Busi ess Se vices la dscap

Source: Forrester Research, Inc.47073

Source: September 5, 2008, The Three Archetypes Of Service Providers Forrester report

Business process design andtransformation services

Business processmanagement

Enterprise architecture designand transformation services

Systems integrationservices

StandardBPO

Appsdevelopment

Apps testing services

Appsintegration

Appsmanagement

Apps hosting

Operationalprocess

consulting

IT strategyconsulting

Consult and plan Architectand developImplement and

integrate Run and manage

S e c u r i t y

s e r v

i c e s

R i s k m a n a g e m e n t a n

d

c o m p

l i a n c e s e r v

i c e s

Business

services

ITservices

The Com anies At A Glance

A snapshot view o the marketplace highlights the distinctions among the leading market players(see Figure 2). Each company engages business customers with an approach that is rooted in itshistory and culture. For example:

Accenture has deep consulting expertise, which contributes to strengths in strategictrans ormational projects.

Capgemini has strong relationships in the European market, enabling it to gain the con denceand trust o European business pro essionals while expanding its Rightshore value proposition.

Cognizants clear ocus on vertical market expertise is helping it drive deeper into businessprocesses in an attempt to move up the value chain.

IBM leverages its scale and global capabilities to provide global end-to-end business solutionsor its clients.


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Figure 2 Ove view SWOT A a sis

Broader Mar et Trends

Te analysis o these companies highlights a ew key similarities. In particular, all our vendors are:

Adapting their o erings to new technology trends. Each o the companies realizes that trendsrelated to service-oriented architecture (SOA), virtualization, and cloud computing create threats

and opportunities regarding their traditional business models. Tey are adjusting to the rapidly changing technology market by exploring how and why these new technology trends matter tobusiness clients and how they can help their clients with strategy and integration. For example,Capgeminis echnoVision 2012 product helps clients align the needs o business customers withemerging technologies. Accenture uses its High Per ormance I research to identi y and sharehow leading companies (identi ed as high per ormers) adjust to technology change.


Accenture It has consulting-drivenexpertise, particularlyon strategic projects.Partner-driven marketapproach facilitatesrelationships withC-level decision-makers.

Strong presence inEuropean marketplaceenables expansion of the Rightshore model.

It heavily focuses onkey vertical marketsand strong clientrelationships and hasreputation forreliability and lowcost.

Depth of capabilitiesand o erings isimmense. It is buildingglobal alignment withbusiness based onbig-picturetechnology themes.

Capgemini

Cognizant

IBM GlobalBusinessServices

It has a comparativelyheavy reliance onconsulting. It is notknown for its ability totake on bite-sizedservice projectcapabilities.

Struggles in mid-2000s, particularlyin North America,have hurt theglobal brand.

The focus on reliabilityand cost may notmatter as much as softskills (like exibility andcreativity) to a businessaudience.

Scale and breadthof o erings presentschallenges: Globalintegration will be anever-ending process.

Brand value, reputationfor businessperformance, andstability will resonatewith customers in weak economic conditions.

As part of itsCollaborativeExperience strategy, itsaggressively partneringwith cloud computingleaders to adapt tonew IT ecosystems.

It has clear opportunityto move up the valuechain into businessservices with a uniquevalue proposition.

IBM continues toleverage its globalstrength and end-to-end capabilitiesto maintain itsstrong brand andmaintain thecustomer experience.

Premium o eringmay not resonate withmidmarket customers,creating opportunityfor midtier of serviceproviders.

It has weaker globalbrand recognitionthan US-basedcompetitors.

It is a small player ina market marked bylarge, globallyintegrated competitionand a new wave of low-cost competitors.

Process-drivenculture means lessagility and morebarriers to innovationin a rapidly changingtech market.

Strength Weakness Opportunity Threat


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Focusing on vertical market alignment. All o the companies reviewed align their strategies by vertical markets in their go-to-market approaches. For example, Cognizant believes its verticalmarket approach is a key di erentiator in its ability to drive deeper into business process, andIBM creates thought leadership on 11 key verticals. Despite this ocus, most o the leadingcompanies have at least some horizontal capabilities to generate ideas, share best practices, and

oster continuity across verticals.

Expanding the boundaries o business technology. Te market leaders are committed tobringing their technology solutions in line with long-term big-picture technology trends. Tey recognize that as technology becomes ubiquitous, it can help clients address social challengesrelated to border security, climate change, and productivity. For example, IBMs Smarter Planetcampaign links to its new Business Analytics and Optimization service line and helps thecompany identi y opportunities or its Intelligent ransportation System, which in turn helps

cities lower tra c congestion and carbon-dioxide emissions.4

Capgemini is meanwhile drivingits smart metering services in the utilities market as well as solutions related to e-Borders as parto its government practice.5

ACCENTURE CREATES BUSINESS VALUE THROUGH A CONSULTING-DRIVEN AppROACH

Accenture (NYSE: ACN) is a publicly traded company ocused on consulting, technology, andoutsourcing solutions (see Figure 3). Te company was ormed when the consulting arm o Andersen Worldwide broke rom its parent company. Following this break, the company went publicin 2001. Accenture had revenues o $23.3 billion in 2008 and pro t margins o 6.7%. Te company enhanced its strategy consulting capabilities with the acquisition o the George Group in 2007, acompany that provides operational and process consulting. 6


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Figure 3 SWOT A a sis: Acce tu e


Corporate/portfoliostrategy

Solution alignment

Sales and go-to-market strategy

Delivery andexecution strategy

Sustainability andviability

Market dynamics

Competitive position

Client perceptionand adoption

Market attribute Opportunity Threat

Company attribute Strength Weakness

It is known for its consulting-drivenapproach and end-to-end servicedelivery capabilities. It has a coherentstrategy from strong thought leadership toconsulting and delivery.

Integrated, end-to-end approach mayresult in less exibility with smallercustomers and fewer bite-sized projects. The companys approach favors largetransformational projects.

The business is structured around vevertically focused operating groups(comprising 17 industry groups).Horizontal platforms in managementconsulting and system integration feedinnovation capabilities.

History as a consulting organization hasled to one of its key strengths: a partner-driven approach to sales that ensuresthe development of businessrelationships. The company has strongmarketing programs aimed at businesscustomers.

The heavy partner-driven approach tosales does not scale easily to themidmarket.

The companys consulting base drivesstrengths in its overall design andimplementation strategy. Its HighPerformance Business focus brings adata-driven approach to identifying andimplementing best practices.

The company has a long history of focusing on the intersection of technologyand business. The company grew stronglyin 2008 despite the economic crisis.

The company continues to leverage itshigh-performance research to identifynew opportunities in hot tech marketslike SOA, SaaS, and cloud computing.

The company holds a leadership position,particularly in the North American market,and its consulting expertise sets it apartfrom smaller competitors.

It will always compete against the scaleand geographic diversity of the larger IBMGlobal Business Services.

Accentures strong brand and reputationfor stability and thought leadershipshould serve it well in the weak economic environment.

The current cost-cutting environmentdoes not lend itself to the companyknown for its premium services andpricing.


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An analysis o Accentures ocus and capabilities shows that the company:

Uses its consulting expertise to drive system integration opportunities. Accenture hasinvested heavily in its High Per ormance Business strategy, which allows it to drive a cohesivetheme through its consulting, technology, and outsourcing services. Te strategy relies on globalsurveys and research that identi y the best practices o high-per ormance companies acrossindustries, the ndings o which help establish its thought leadership and in orm its services.Te High Per ormance strategy builds a power ul knowledge repository or Accenture toleverage: It can complement its technology expertise with quantitative data and use key ndingsin its go-to-market approach.

Has not lost sight o horizontal market opportunity. Although Accenture approaches themarket with a vertical ocus consisting o ve operating groups and 17 industries, it still placesemphasis on the value o its horizontal capabilities. Te company uses its growth plat orms(management consulting, system integration, and outsourcing) as a way to leverage itshorizontal expertise, drive innovation, and share best practices across verticals. Furthermore, itleverages expertise rom its echnology Labs to integrate new technologies into vertical markets.

Views technology benefts as inseparable rom business results. In virtually all o itsmarketing and messaging, Accenture conveys its belie that its individual technology expertisematters less than the business value it provides. Tis message is consistent in its public lings, itsproduct o erings, and its marketing materials. Tis ocus is most likely a result o the companyshistory in consulting and its partner-driven approach to sales and marketing. Tis approach willserve it well as the landscape evolves its partner-level relationships create power ul barriers to

entry that I companies will nd di cult to replicate.

May ace challenges in this economic climate. Preliminary eedback rom services vendorsand clients indicates that many companies have reacted to this recession, to date, by cuttingdiscretionary spending, reducing strategy consulting work, and putting large trans ormationalprojects on hold. Tese market changes could a ect Accenture more than other companies since the company is less known or its ability to handle bite-sized projects. Some o thesechallenges could be mitigated by the act that customers will revert to a strong brand likeAccentures in these market conditions, and 2008 was a strong year or the company. But well haveto watch or 2009 operating results to see how Accenture weathers the current economic storm.


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CApGEMINI FOCUSES ON THE COLLABORATIVE BUSINESS EXpERIENCE

Capgemini is primarily known or its expertise in serving the European market. Te companyshistory goes back to the 1960s and 1970s when the so ware company Sogeti acquired the EuropeanI services company CAP. Since then, the company has undergone several structural and brandingchanges, including the acquisition o Ernst & Youngs consulting division in 2000. While thecompanys North American operations su ered in the early 2000s, the companys recent turnaroundbased on its Rightshore model has largely been viewed as a success. Te company had revenues o 8.7 billion in 2008 and an operating margin o 8.5% (see Figure 4).

Figure 4 SWOT A a sis: Capge i i


Corporate/portfolio

strategy

Solution alignment




Market dynamics





It maintains a strong position in business

process and consulting expertise. ItsRightshore model proposition is focusedon cost reduction, the ability to outsourceIT operations, and business value.

The companys strategy is not highly

di erentiated from its larger, NorthAmerican competitors.

It focuses on transformation of businessoperations. Its country-broads in keycountries favor cross-service line work.

It relies on dedicated business consultingrelationships to reach business customers.It has done well with its CollaborativeExperience messaging an appropriatetopic for bridging IT and business needs.

The company places less emphasis onvertical-market business knowledge thanother vendors. Clear links betweenthought leadership, strategy, marketing,and sales approach are less clear.

It leverages repeatable frameworks aimedat bringing value to business customerssuch as ASE, RAIN, and TechnoVision.

Strong relationships in the Europeanmarketplace provide barriers to entry andopportunities, with European outsourcingremaining strong.

It is pursuing partnerships to ful ll a cloudvalue proposition, in partnership withleading market players. Smart metering,e-Borders, and virtual mobility telecom areexamples of new capabilities.

It is strongly positioned in the Europeanmarketplace. It does not have the global brandrecognition that other tier-one competitorshave.

It believes hot areas exist in userexperience, business intelligence anddata management, business processmodeling and management, andwireless/mobility.

Capgemini will have to make thetransition from traditional systemintegration focus to a balance of vertical and horizontal capabilities andbusiness process standards.

Recent history includes some nancialstumbles in the US market.


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An analysis o Capgeminis ocus and capabilities shows that the company:

Is enhancing its Rightshore strategy with more business consulting. In the early 2000s,Capgemini underwent a strategy trans ormation based on its Rightshore global delivery modelthat has helped the company emerge rom some struggles to become a leading contenderin global I services.7 Going orward, the company is ocusing its e orts on increasing therelationship between its global capabilities, its business process expertise, and its businesstechnology rameworks.

Continues to create unique business technology methodologies. Capgemini relies on a seto proven methodologies and products designed to align the business needs o its clients withtechnology solutions. In particular, the companys echnoVision 2012 product helps clients mapnew technologies and innovations (like so ware-as-a-service [SaaS] and mashups) to businessdrivers. A key goal o the product is to shed light on which technology trends will be mostrelevant and strategic to industry-speci c business operations and help drive Capgeminisrole in implementation.

Has a go-to-market approach ocused on connecting I to business. Capgeminis strategy isocused on providing a wider set o solutions to business managers pushing the companysront-o ce value. Te companys marketing campaign ocused on the Collaborative Business

Experience highlights its e orts to bridge the I /business technology (B ) gap and its goalto develop stronger partnerships in the new I ecosystem. 8 In November 2008, Capgeminiannounced a partnership with Amazon.com to run applications in remote data services,highlighting its commitment to partnerships as a way to succeed in the new I ecosystem

de ned largely by cloud computing. 9

Is heavily reliant on the European marketplace. Approximately 79% o Capgeminis revenues arerom Europe a act that can be viewed as a positive and a negative.10 While Capgeminis strong

presence and relationships in this market will help it sustain growth in a market that has been slowto embrace o shore work, the current recession highlights some o the challenges companies can

ace without geographic diversi cation. Furthermore, Capgeminis presence in Asia a aster-growing market than the West where competitors have greater share is limited. 11

COGNIzANT IS MOVING Up IN THE MARkET THROUGH A VERTICAL MARkET FOCUS

Cognizant echnology Solutions (NASDAQ: C SH) is a publicly traded provider o I , consulting,and business process outsourcing. Te company was ounded as the I development andmaintenance arm o Dun & Bradstreet in 1994 and was spun o as an independent company shortly therea er. While Cognizant has its headquarters in New Jersey, the majority o the companysdevelopment centers and employees are in India. Cognizant reported $2.8 billion in annual revenuesin 2008, with operating margins o approximately 18% or the past three years (see Figure 5).


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Figure 5 SWOT A a sis: Cog iza t



Solution alignment


Delivery and

execution strategy


Market dynamics





It is moving deeper into vertical markets inorder to provide higher levels of service tobusiness customers and is usingacquisitions to ll vertical service gaps.

Companys overall culture, focus, and valuepropositions are mostly in the realm of IT,not business customers.

Vertical market approach is consistentand straightforward, with stronggrowth from nancial services, healthcare,and retail manufacturing.

It is building on its value proposition of process-expertise reliability and low costin key verticals. The market focus is clearand consistent.

Two-in-a-Box model leverages the global

delivery model (on-site and o shore),designed to develop strongerrelationships with clients.

Business consulting revenue is growingstrongly, with positive results frompreliminary business focus. It has highlevels of client satisfaction.

Cognizant has a clear opportunity tomove up the value chain into businessservices with a unique value propositionversus Western market leaders, but it mustdi erentiate.

Share of business services market to begained by India-centric players, likeCognizant, is immense.

It is a much smaller player in a market of large companies, which are replicating theIndian low-cost value proposition.

Reputation for reliability, processexpertise, and service will resonate withbusiness customers.

Heavy focus on vertical market solutionshas the potential to limit cross-verticalexpertise and may make it di cult forsome verticals to grow/expand.

Selling new value-added business servicesin a recession (when cost is key) willbe di cult.

Cognizants process expertise may not

matter as much as soft skills (like exibilityand creativity) to a business audience. Thought leadership for businesscustomers is limited.

Comparatively, there is still a largeperception gap to overcome before thecompany is viewed as a value-addstrategic partner for business customers.


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An analysis o Cognizants ocus and capabilities shows that the company:

Is heavily ocused on its vertical market strategy. While Cognizant has traditionally beenocused on serving the needs o I pro essionals, it expects business consulting to grow

as a percentage o overall revenue. Its history o serving vertical markets will help it here:Te company has ocused on a core set o vertical markets ( nancial services, healthcare,manu acturing/logistics, and retail) or years, and its expertise in these markets will help itexpand its value-added services. Te company plans to continue to build its vertical marketexpertise through select acquisitions, like its recent retail- ocused acquisition o Canada-basedActive Intelligence.12

Wants to bring more value to the o shoring model. Cognizant believes that the cost savingsits clients have recognized rom o shoring create the oundation or long-term strategicrelationships. Te companys wo-in-a-Box methodology o putting two managers on eachproject one at the client site and one with the delivery capabilities helped its clientsmitigate the operational risks associated with global sourcing strategies, even though it createda heavier personnel cost structure or Cognizant. Now, the company is using the relationshipsdeveloped in this program to make its o erings deeper and more strategic to the business.For example, the company is currently ocused on building new capabilities in post-mergerintegration and long-term sourcing strategy.

Has an opportunity to di erentiate based on its process ocus, reliability, and value. Perhaps the best option or service providers like Cognizant is not to try to replicate the valueproposition o the largest tier-one market players and instead build unique services based on

strengths in process and reputation or reliability and value. I Cognizant can do this, it can pullaway rom other I service providers, while distinguishing itsel rom its much larger NorthAmerican competitors.

Still aces challenges related to culture and perception. Perhaps the biggest barriers to thegrowth o Cognizants business solutions may be related to its own culture and client perception:A value proposition based on low cost, reliability, and process expertise may not resonate withbusiness customers seeking creative solutions rom thought partners. Furthermore, a culturebased on process controls and heavy management oversight may be di cult to trans orm into a

value-added partner.

IBM BRINGS SCALE AND A FULL SET OF CApABILITIES TO THE BUSINESS CUSTOMER

IBM Global Services provides business consulting, application services, and outsourcing toorganizations worldwide. Although IBMs roots in services go back to the 1980s, they grewsubstantially when ormer chie executive o cer (CEO) Louis Gerstner ocused the companysturnaround strategy on its ability to provide business clients with comprehensive system integration


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and pro essional services.13 Gerstners successor, Sam Palmisano, bolstered the companys servicescapabilities in 2002 with the acquisition o PricewaterhouseCoopers consultancy business or $3.5billion (see Figure 6).

Figure 6 SWOT A a sis: IBm G oba Busi ess Se vices



Solution alignment




Market dynamics





Known for its global scale and strongexecution capabilities, it has a broadportfolio of solutions comprisingend-to-end capabilities. Focus is ondeepening customer relationships andcontinued global integration.

End-to-end focus may be less attractive tocompanies looking for very speci csolutions or smaller-sized engagements.

The company builds business expertisethrough thought leadership (four GlobalC-Suite Studies) and guides on the newparadigm of business and IT. It has speci cmarketing programs for 17industries.

It has strong mindshare with both businessand IT buyers and fosters a relationship-driven approach with the C-Suite.

It brings together its Smarter Planetthemes and component business modelsto deliver value to business customers.New metrics focus on key agilityindicators (in addition to KPI's) willbe intriguing to business customers.

It based its turnaround, in part, on thevalue of technology-related businessservices, and Sam Palmisano has continuedthe evolution of the successful strategy.

Tackling a range of emerging technologyopportunities like cloud and SOA, it isalso focused on big-picture issues relatedto topics like sustainability, intelligence,and bringing agility to global businesses.

It can be competitive with virtually everyservice provider but distinguishes itself inits broad capabilities and reach.

Nobody gets red for hiring IBM is thecommon phrase that is more relevantthan ever in this economy. Clientsatisfaction is high.

Scale and breadth of o erings presentschallenges: Vast amount of integration hasto take place to bring together IBMsresearch, services, messaging, and valueproposition on a global scale.

Despite its vast improvements, the cultureis very process-driven. This may re ect alack of exibility.

A layered matrix of organization andmarketing strategies can make it di cultto identity the clear market approach andfocus. Messages can be diluted amongmultiple audiences.

As business demands for new technologysolutions accelerate, the largest playerswill face their own agility challenges. Sofar, IBM has done a nice job of buildinginnovation based on tech market changes.


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An analysis o IBMs ocus and capabilities shows that:

Te company has a clear ocus on delivering integrated business value. IBMs businesssolutions o erings highlight how the companys value proposition fows rom thoughtleadership to its consulting rameworks and per ormance metrics. Te company uses its

Smarter Planet theme and its C-Suite studies to provide the market with thought leadershipand give ocus to its vertical market services o erings. It uses its component business models tohelp clients align their business needs with I systems by connecting their business architecture,process models, and I implementation capabilities. Finally, IBM uses key agility indicators(KAIs) as well as key per ormance indicators (KPIs) to measure the business value that itstechnology solutions can achieve.

Continued global integration remains an opportunity. More than its smaller competitors,IBM has to strive to keep its global services fexible and agile in a rapidly changing competitivemarketplace. Te company continues to invest in its global delivery model, managing its globalcapabilities with its strong process expertise. It has adopted a competency-based approach orprovisioning services, like enterprise resource planning (ERP) or industry skills, while ensuringthat these competencies are in close geographic proximity to demand. IBM clearly has anopportunity to continue to lead as the global business operations o clients expand.

Te company is showing clear commitment to its B capabilities. IBM recently strengthenedits business capabilities with the announcement o its Business Analytics and Optimizationservice line a practice designed to help business executives leverage data and analytics tomake more in ormed business decisions. Te announcement ts well with the companys brand

image, global capabilities, and Smarter Planet marketing campaign. Te announcement showsthat the company is committed to the alignment between technology and business strategy andits staying consistent in its market approach.

Te companys go-to-market approach may be overly complex. Unlike some o itscompetition, getting a clear understanding o IBMs capabilities and ocus can be a di cultendeavor the organization is simply very large, and its breadth o capabilities is immense.Tis will remain a challenge, particularly or the companys marketing organization. Forexample, the company segments its markets by vertical, solutions, unctional roles, titles, andmarket themes. Te complexity can be viewed as either a positive its breadth o expertisebeing impressive or a barrier to a streamlined go-to-market strategy.


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SUppLEMENTAL MATERIAL

Methodology

Forrester invited the companies in this SWO analysis to participate in the research by answeringa set o 21 questions related to their companys strengths, weaknesses, opportunities, and threats.Each vendor had the opportunity to provide Forrester with in ormation and discuss the resultswith Forrester analysts be ore publication. However, only a small subset o the responses has beenrepresented here, and in most cases, in ormation has been modi ed to suit an abbreviated ormatalong with additions rom Forrester. Te nal analysis o these companies is the work o Forrester.

ENDNOTES1 As technology becomes embedded in lines o business and business increasingly relies on technology, a

new market opportunity is emerging or I service providers. Tis market which Forrester calls the

business services market is supported by power ul market trends that will dramatically increase thepace o technology-enabled innovation. Te market will be partially de ned by its o erings technology solutions that pull together the best o business strategy, I integration, and delivery. See the January 22,2009, Market Overview: Te ech-Enabled Business Services Market Opportunity report.

2 Te trans ormation o I to B is one o three megatrends that we think will shape the technology marketplace over the next ew years. See the November 21, 2008, Te Hour O Te Vendor Strategist:Tree Mega Business rends Will Reshape Te ech Sector report.

3 Te Forrester Wave is a detailed analysis o vendors products and services based on transparent, ully accessible criteria. Please re er to Forresters description o the Wave. Source: (http://www. orrester.com/wave).

4 IBM created an Intelligent ransportation System or the City o Stockholm, which it claims has resulted ina 25% reduction in tra c, a 15% reduction in carbon dioxide, and $120 million per year in revenue, with apayback in our years.

5 Capgemini partnered with Raytheon to provide e-border security or the UK. Source: rusted Borderssigns contract with UK Home O ce or e-Borders contract Capgemini to provide business architecture

or the project, Capgemini press release, November 14, 2007 (http://www.uk.capgemini.com/news/pr/pr1585/).

6 According to Accenture, George Group helps companies with complexity reduction, lean manu acturingand operations, process innovation, strategic cost reduction, and growth through innovation. Source:

Accenture (http://www.georgegroup.com/).7 Capgeminis Rightshore model helped it make the trans ormation to a global services company. See the

April 28, 2006, Capgeminis Rightshore rans ormation report.

8 In November 2008, Capgemini announced a partnership with Amazon to run applications in remote dataservices. Source: Capgemini (http://www.uk.capgemini.com/news/capgemini_in_the_news/capgemini-and-amazon-bond-in-the-cloud/).
http://www.forrester.com/go?docid=47072&src=47073pdfhttp://www.forrester.com/go?docid=47710&src=47073pdfhttp://www.forrester.com/go?docid=47710&src=47073pdfhttp://www.forrester.com/go?docid=39369&src=47073pdfhttp://www.forrester.com/go?docid=39369&src=47073pdfhttp://www.forrester.com/go?docid=47710&src=47073pdfhttp://www.forrester.com/go?docid=47710&src=47073pdfhttp://www.forrester.com/go?docid=47072&src=47073pdf


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9 Forrester de ned the importance o partnerships in the new I ecosystem. See the January 2, 2007, TeEmerging I Ecosystem report.

10 2008 annual revenues had not been released at the time o this publication, so this is based on 2007numbers. Source: Annual Report 2007, Capgemini (http://www.capgemini.com/m/en/doc/2007_re erence_document_-_annual_ nancial_report.pd ).

12 Te Asia-Paci c region as a whole is only projected to grow in line with the North American marketplace,but pockets o opportunity in countries like China could be strong in coming years. See the January 12, 2009, Global I Market Outlook: 2009 report.

13 Active Intelligence is ocused on providing consulting, implementation, and support services around theOracle Retail Merchandising and Optimization suite. Source: SiliconIndia (http://www.siliconindia.com/shownews/Cognizant_acquires_Canada_based_Active_Intelligence-nid-52392.html).

13 Gerstner notes that under his direction, he took a big bet that: Over the next decade, customers would

increasingly value companies that could provide complete solutions solutions that integrated technology rom various suppliers and, more important, integrated technology into the process o an enterprise.

Source: Louis Gerstner, Jr., Who Says Elephants Cant Dance? Collins, 2002.
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