idc ibm consulting quadrant

7/30/2019 IDC IBM Consulting Quadrant

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Filing Information: March 2012, IDC #233426, Volume: 1

Business Consulting Services: Competitive Analysis

C O M P E T I T I V E A N A L Y S I S

I D C M a r k e t S c a p e : W o r l d w i d e B u s i n e s s C o n s u l t i n gS e r v i c e s 2 0 1 2 V e n d o r A n a l y s i s

Cushing Anderson

I N T H I S E X C E R P T

The content for this excerpt was taken directly from the IDC MarketScape: Worldwide

Business Consulting Services 2012 Vendor Analysis by Cushing Anderson (Doc #

233425). All or parts of the following sections are included in this excerpt: IDC

Opinion, In This Study, Situation Overview, Future Outlook, Essential Guidance, and

Synopsis. Also included are Tables 1 & 2, and Figure 1.

I D C O P I N I O NThis IDC study represents the vendor assessment model called IDC MarketScape.

This research is a quantitative and qualitative assessment of the characteristics that

explain a vendor's success in the marketplace and help anticipate its ascendancy.

This study assesses the capability and business strategy of many of the leading

business consulting firms. This evaluation is based on a comprehensive framework

and set of parameters expected to be most conducive to success in providing

business consulting services during both the short term and the long term. A

significant and unique component of this evaluation is the inclusion of the perception

of business consulting buyers of both the key characteristics and the capabilities of

these consulting providers. As one would expect of market leaders, overall, these

firms performed very well on this assessment. Key findings include:

Surprisingly, this evaluation discovered that generally buyers are disappointed

with the consulting provider's ability to deliver ROI for the project and maximize

the project's value. While all vendors state a focus on maximizing the value of

their projects, buyers believe this area is one of the weakest performance areas

for consultants overall.

Even though most firms describe themselves as capable of global delivery, an

important factor for their clients is the ability to leverage local staff and resources

on appropriate projects. Clearly, this reflects both a cost focus and a desire for

local awareness. In both cases, consulting providers must improve their ability to

exploit their local talent.

Firms are generally quite good at demonstrating their ability to apply proven

methodologies/tools and to provide a full spectrum of business consulting

services; however, neither of these capabilities resonates particularly highly

when enterprises consider selecting a firm for a particular project.

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I N T H I S S T U D Y

This IDC study uses the vendor assessment model called IDC MarketScape. This

research is a quantitative and qualitative assessment of the characteristics that

explain a firm's success in the marketplace and help anticipate its ascendancy.

This study assesses the capability and business strategy of many of the leading

business consulting firms. This evaluation is based on a comprehensive framework

and set of parameters expected to be most conducive to success in providing

business consulting services during both the short term and the long term. A

significant and unique component of this evaluation is the inclusion of the perception

of business consulting buyers of both the key characteristics and the capabilities of

these consulting providers. As one would expect of market leaders, overall, these

firms performed very well on this assessment.

This study is composed of two key sections. The first part is a definition or description

of the characteristics that IDC analysts believe make a successful business

consulting firm. These characteristics are based on buyer and vendor surveys and

key analysts' observations of industry best practices.

The second part is a visual aggregation of multiple firms into a single bubble-chart

format. This display concisely exhibits the observed and quantified scores of the

consulting providers.

The document concludes with IDC's essential guidance to support continued growth

and improvement of these firms' offerings.

M e t h o d o l o g y

IDC MarketScape criteria selection, weightings, and vendor scores represent well-

researched IDC judgment about the market and specific firms. IDC analysts tailor the

range of standard characteristics by which firms are measured through structured

discussions, surveys, and interviews with market leaders, participants, and end

buyers. Market weightings are based on user interviews, buyer surveys, and the input

of a review board of IDC experts in each market. IDC analysts base individual firm

scores and, ultimately, firm positions on the IDC MarketScape, surveys and

interviews with the firms, publicly available information, and buyer experiences in an

effort to provide an accurate and consistent assessment of each firm's characteristics,

behavior, and capability.

S I T U A T I O N O V E R V I E W

I n t r o d u c t i o n

Business consulting involves advisory and implementation services related to

management issues. It often includes defining an organization's strategy and goals

and designing and implementing the structures and processes that help the

organization reach its goals. Business consulting includes three main areas: strategy


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2012 IDC #233426 3

consulting, operational improvement consulting, and change and organization

consulting. The market is primarily served by four firm types:

"Big Four": IDC recognizes the well-known Big Four firms as the four largest

international accountancy and professional services firms Deloitte, Ernst &

Young (E&Y), KPMG, and PricewaterhouseCoopers (PwC).

Multidisciplinary: IDC describes multidisciplinary firms as large, diversified

consulting organizations that offer a range of business consulting services to

clients across a myriad of sectors. To distinguish these from other specialty firms,

services must address more than two business functional areas, in addition to

providing strategy and operational implementations.

Technology led: These are also large, multifaceted firms and are known for

deep expertise in both technology and business consulting. IDC identifies these

firms as those that expanded from IT-centric business into more broad business

consulting or vice versa.

Specialty: Specialty firms have focused areas of consulting expertise in specific

industries, functional areas, or technologies. Management and strategicconsulting specialists that offer primarily strategy consulting and business

intelligence models to specific sectors or industries including government fit into

this category of firms.

IDC MarketScape Vendor Inclusion Criteria

This research includes analysis of the five largest business consulting firms and firms

with broad portfolios spanning IDC's research coverage and with global scale. This

assessment is designed to evaluate the characteristics of each firm as opposed to

its size or the breadth of its services. It is conceivable, and in fact the case, that

specialty firms can compete with multidisciplinary firms on an equal footing. As such,

this evaluation should not be considered a "final judgment" on the firms to consider

for a particular project. An enterprise's specific objectives and requirements will play a

significant role in determining which firms should be considered as potential

candidates for an engagement.

Weighting Evaluation Criteria

The importance of a firm's characteristics to project success and relevance of the

particular issue combined with IDC's opinion about the impact those elements have

on selection of firms implies a unique weighting of these elements when evaluating a

firm's overall strategy and capability to address market opportunity and realizing

market success (see Tables 1 and 2).


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T A B L E 1

K e y S t r a t e g y M e a s u r e s f o r S u c c e s s : B u s i n e s s C o n s u l t i n g S e r v i c e s

Strategy Criteria Criteria for SuccessSubcriteriaWeighting

Offering strategy Current development of offerings will be relevant and attractive to customers over the next

three to five years.

Functionality or

offering road map

A wide variety of approaches will be employed to ensure increased functional and industry

capability, including strategic hiring and training. To ensure maximum impact,organizations will need to increase their ability to construct teams that leverage those

capabilities and provide precise value to clients.

1

Delivery model Methodologies and tools are increasingly leveraged from a single, universally accessible

source to ensure worldwide consistency. To ensure maximum use and value, tools and

methodologies must be accessible using a single library source.

4

Portfolio strategy Increasingly, relevant offerings must involve the formation of multidisciplinary teams. A

firm's increasing capability to identify potential team members, determine their fit andavailability, and leverage their talents effectively will become an essential characteristic of

successful engagements.

4

Other offering

strategies

Prioritization of new opportunities must consider demand and adjacent capabilities and

involve a tiered (regional) prioritization process.

1

Offering strategytotal

10

Go-to-market

strategy

These strategies maximize the connection between offering and customers, including

choosing to target customer segments that offer the greatest opportunity over the next

three to five years.

Pricing model Firms must focus on the performance of their clients' business, and their pricing modelsmust reflect the value of the services delivered. While contingent fees represent a strong

statement of confidence, most buyers are not fully prepared for the gain sharing (asopposed to risk sharing), making these arrangements viable in only small proportionengagements.

1

Sales/distribution

strategy

Consulting models are becoming more complex. Enterprise buyers need to consume

consultative services in increasingly diverse ways. While still dominant, traditional

engagement models are being supplemented by "microsourcing" of technically complexbut narrow tasks such as analytic processing or ongoing benchmarking, and information

services provided with less intensive "consultation" to support insourced analytical or

benchmark operations.

1

Marketing strategy Growth comes from many types of opportunities and client interactions, including temporalopportunities. Identifying areas of high demand and providing comprehensive and timelysolutions require an integrated firmwide effort but will best serve the client's most

important and immediate needs.

7

Customer servicestrategy

Consistent and innovative service delivery relies on collaborative efforts throughout anorganization. Firms must ensure a strong culture of collaboration, consistent and relevant

training, and executive oversight and support.

1

Go-to-market

strategy total

10

Business strategy Strategies to grow the business are aligned with market trends and future opportunities

over the next three to f ive years.

Growth strategy Firms poised for growth in the near term provide relevant specialized offerings thataddress specific needs, particularly for industries, geographic markets, or the size of the

4


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2012 IDC #233426 5

T A B L E 1

K e y S t r a t e g y M e a s u r e s f o r S u c c e s s : B u s i n e s s C o n s u l t i n g S e r v i c e s

Strategy Criteria Criteria for Success

Subcriteria

Weighting

client. Additionally, a consulting provider's ability to cultivate a wide range of referenceableclients ensures the provider's capabilities will get the widest exposure to opportunities.Growth strategy is measured by both the diversity of the planned dimensions of growth

and the measure of enthusiasm of client recommendation across company size andfunctional areas.

Innovation/R&Dpace and

productivity

Firms must be able to deliver innovation to their clients, in terms of both leveragingexisting experience for the unique benefit of a client and developing a truly unique

approach to solutions. Delivery of innovation is measured by client perception of the

innovation delivered on the project.

4

Employee strategy There is no simple approach to employees firms need to invest in career customization

programs to retain some advanced talent, providing for a diverse range of career tracks.Emerging market expansion requires increased focus on local capabilities and the

capability to deliver services from specialized delivery centers to provide both rewarding

opportunities and high client value. Employee strategy is evaluated by examining thetypes of career/employee management practices in place. Particular weight is given for

career customization/diversity programs that facilitate multiple paths to career success

within the firm.

2

Business strategytotal

10

Source: IDC, 2012

T A B L E 2

K e y C a p a b i l i t y M e a s u r e s f o r S u c c e s s : B u s i n e s s C o n s u l t i n g S e r v i c e s

Capabilities Criteria Criteria for Success

Subcriteria

Weighting

Offering

capabilities

The offering's capabilities align well with current market needs and demands.

Functionality/

offering delivered

Offering capability is a combination of functional (domain) knowledge, industry insights,

and technical capabilities. Higher capability reflects buyer perception of a firm's capability.

4

Delivery model

appropriateness

and execution

The appropriate delivery model must include an appropriate integration with the client

team and meet client-developed project timelines. Higher capability is reflected in higher

buyer perception of a firm's capability in both the "ability to integrate with client team" and

the "ability to meet project timelines."

3

Cost

competitiveness

Cost competitiveness can best be measured by the ability to deliver an appropriate and

sustainable return on investment. Higher capability reflects buyer perception of a firm's

capability.

2

Portfolio benefits

delivered

Evolved consulting firms will necessarily be required to provide a full range of consulting

services combined with an ability to provide specific insights related to industry, technical,

or domain issues. Higher capability reflects buyer perception of a firm's fullness and

1


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T A B L E 2

K e y C a p a b i l i t y M e a s u r e s f o r S u c c e s s : B u s i n e s s C o n s u l t i n g S e r v i c e s

Capabilities Criteria Criteria for Success

Subcriteria

Weighting

appropriateness of services offered.

Offering capabilities

total

10

Go-to-market

capabilities

These capabilities maximize the connection between offerings and customers, such as

delivery, partnerships, pricing, distribution, marketing, sales, and service.

Pricing model

options and

alignment

Contingent fee structures are a useful alternative model to help share risk and

acknowledge joint ownership of results. A moderate level of use of this fee reflects a firm's

trust in its own relevance and commitment to client success.

1

Sales/distribution

structure,

capabilities

Firms must operate by balancing both local and global requirements. Global presence

indicates a firm's ability to respond and be relevant to cross-geographic issues. Higher

capability reflects buyer perception of a firm's capability.

1

Marketing The ability of a firm to connect to its clients' issues is essential to establishing a level of

trust in the firm's ability to solve the problem. Issues are evaluated and weighted based on

regional priorities. Higher capability reflects buyer perception of a firm's capability.

7

Customer service A firm's ability to provide service to a client is contingent on the firm's ability to deploy local

resources where appropriate. Higher capability reflects buyer perception of a firm's

capability.

1

Go-to-market

capabilities total

10

Business

capabilities

Financial, employee, partner, and R&D management, among other capabilities, are in

agreement with current market opportunities.

Growth strategy

execution

Essential to a consulting firm's growth is its ability to develop "referenceable clients."

Clients that strongly believe the firm will represent their best interests are most often

referred. Growth strategy execution is measured by the degree of enthusiasm of industry-

related recommendations by clients.

8

Other business

capabilities

Also essential to a consulting firm's growth is the firm's ability to develop "referenceable

clients." Clients that strongly believe the firm will represent their best interests are most

often referred. Business capabilities are measured by the degree of enthusiasm of

recommendations by clients to enterprises of similar size.

2

Businesscapabilities total

10

Source: IDC, 2012


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F U T U R E O U T L O O K

I D C M a r k e t S c a p e W o r l d w i d e

B u s i n e s s C o n s u l t i n g S e r v i c e s M a r k e t

V e n d o r A s s e s s m e n t

The IDC vendor assessment for the business consulting services market represents

IDC's opinion on which providers are well positioned today through current

capabilities and which providers are best positioned to gain market share over the

next few years. Positioning in the upper right of the grid indicates that providers are

well positioned to gain market share. For the purposes of analysis, IDC divided

potential key strategy measures for success into two primary categories: capabilities

and strategies.

Positioning on the y-axis reflects the provider's current capabilities and menu of

services and how well aligned it is to customer needs. The capabilities category

focuses on the capabilities of the company and services today, here and now. Under

this category, IDC looks at how well a provider is building/delivering capabilities that

enable it to execute its chosen strategy in the market.

Positioning on the x-axis, or strategies axis, indicates how well the provider's future

strategy aligns with what customers will require in three to five years. The strategies

category focuses on high-level strategic decisions and underlying assumptions about

offerings, customer segments, business, and go-to-market plans for the future, in this

case defined as the next three to five years. Under this category, analysts look at

whether or not a provider's strategies in various areas are aligned with customer

requirements (and spending) over a defined future time period.

Figure 1 shows each provider's position in the vendor assessment chart. A provider's

market share is indicated by the size of the bubble, and a (+), (-), or () icon indicates

whether or not the provider is growing faster, slower, or even with overall market

growth.


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F I G U R E 1

I D C M a r k e t S c a p e W o r l d w i d e B u s i n e s s C o n s u l t i n g S e r v i c e s

V en do r A s s e s sm en t

Source: IDC, 2012

P r o v i d e r P r o f i l e s

IBM

According to IDC analysis and buyer perception, IBM is an IDC MarketScape Leader

worldwide. One example of the client feedback we received, from a manufacturing

leader, confirms this: "It is a company that puts all its resources to achieve

objectives."

IBM is one of the largest multidisciplinary consulting firms, with more than 200,000

employees globally in its combined services business, and serves clients in more

than 300 locations across 170 countries. IBM provides consulting services related to

strategy and innovation, operations management, finance, HR, change management,

and business advisory services.


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Additionally, IBM's range of IT consulting services is extremely comprehensive and is

well recognized for its industry-specific IT and business solutions. At the forefront of

IBM's consulting capabilities is its Strategy and Transformation practice. Strategy and

Transformation has five functional areas: business and customer strategy, finance

and risk, operations and supply chain, technology strategy, and organization and

people.

IBM Strategy and Transformation consultants bring IP-based assets and accelerators

to client engagements to deliver tangible benefits; provide an integrated,

collaborative, and systematic approach to accelerate transformations; and deliver

client business transformation consulting services. IBM continues to offer a range of

consulting offerings, including management consulting in GBS and technology

consulting in conjunction with GTS, demonstrating its ability to integrate and

implement IT and business consulting capabilities. Unifying market offerings from

both a technology and a business perspective benefits clients, particularly when

clients are faced with technology-rooted operational changes, such as digital

business transformation and supply chain operations optimization.

IBM has expanded its capabilities in business function and industry-specific analytics,

focusing on business and workforce improvement solutions, among other areas that

align with IBM's five Smarter Planet growth areas. These growth areas are clustered

around core themes of social business, cloud, smarter commerce, smarter cities, and

business analytics optimization and are typically paired with other relevant offerings.

IBM has also made significant investments in collaboration, knowledge management,

and assets by deliberately creating a culture of knowledge sharing and collaboration

that rewards consultants who contribute and reuse knowledge.

In November 2010, IBM launched a new consulting service focused on social

business and its implications to organizations and people strategies. This service is

targeted at helping clients shift toward a more social form of employee collaboration.

The social business consulting services will draw from experts in IBM's Strategy and

Transformation practice and with specific vertical expertise dedicated to workforce

management.

IBM has worked to extend its Smarter Planet messaging into specific industries such

as banking/financial services, food, government, oil, public safety, and healthcare.

IBM is actively marketing its Smarter Planet vision, part of which calls for eco-friendly

operational efficiencies across industries and regions, increasing its focus on

developing environmentally sustainable technologies and services. IBM has coined

the phrase "ecoefficiency" and drives its Green Sigma initiatives throughout its IT and

consulting capabilities. At the same time, IBM's Smarter Cities challenge, announced

in November 2010, is the company's largest philanthropic initiative to date, with a $50

million technology and services grant to create 100 "smarter cities."

IBM GBS is actively engaging senior business leaders through its CEO, CFO, CHRO,

and other studies that were published in 2011. The firm has deepened its executive

strategy insights and focused particularly on the new global complexities following the

economic downturn, creative leadership, and global operations and integration in

recently published reports including the 2011 IBM Global CMO Study Collective


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Intelligence: Capitalizing on the Crowd; its Supply Chain Management report Smarter

Commerce Is Redefining Value Chain Visibility: Connecting the Dots; and Enterprise

Risk Managementthought leadership studies.

IBM's growth continues to come from emerging economies such as India, China,

Latin America, and Africa, among others. IBM continues to invest in additional growth

market regions with new marketing and sales programs across Southeast Asia, Latin

America, Eastern Europe, Africa, and the Middle East. To ensure consistent delivery

to all customers, IBM has created a Strategy Consulting Center of Competence that

deploys deep, proven experts to client projects anywhere in the world. This approach

has been particularly helpful in growth markets where local talent continues to

develop.

Worldwide, IBM is seen as the most capable of all firms at applying proven

methodologies/tools and at delivering innovation in the project. IBM is also seen as

the most capable of all firms at maximizing project value. IBM is also seen as the

most capable of all firms at integrating its project team with the client's and at helping

clients drive innovation.

Additionally, IBM is seen as among the most capable at meeting the project timeline

and at providing a full spectrum of business consulting services. IBM is also seen as

among the most capable at helping clients create a more effective business and

implementing options for growth.

To continue to improve its position on this IDC MarketScape, IBM should improve

client perception of its ability to help enterprises comply with new or existing

regulations.

E S S E N T I A L G U I D A N C E

Most business consulting providers are particularly adaptive to changes in economic

or business conditions: adding or removing staff by geography, industry

specialization, or domain expertise. To remain successful, it will be important to:

Create visible links between project strategy and "business execution."

Integrate multiple disciplines throughout the project to ensure client needs are

most fully satisfied and to ensure deep multidisciplinary relationships and strong

positioning on the nextproject.

Evolve and adapt to prevail through specific periods of change by seeking to

capitalize on "temporal opportunities."

Establish deeper expertise in strategically valuable areas of growth, industries,

and geographies.

Firms that have been successful at adapting to temporal opportunities share some

common characteristics including the willingness to seek out dynamic shifts in their

clients' marketplaces, the ability to evolve their offerings based on unique experience,

and the ability to deploy a multidisciplinary team to support highly specialized client


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2012 IDC #233426 11

requirements. IDC believes these characteristics represent a core set of practices that

will enable firms to adapt quickly and service their clients most effectively.

Overall, it will be important for global, industry, and geographic leaders to create

proactive responses to clients and prospects. Our long-term guidance for providers

contained in previous documents remains consistent: Focus on regional priorities.

Functionally, consulting firms worldwide should focus on improving their ability to

meet client expectations related to the delivery of return on investment for the project.

Even though vendors focus on maximizing the value of their projects, buyers believe

this area is one of the weakest performance areas for consultants worldwide.

Additionally, consulting providers must improve their ability to exploit their local talent

in order to meet the cost and insight requirements of their clients.

Worldwide, strategies and drivers are divided between cost control, realigning, and

transforming operations. Enterprises are seeking to improve operational efficiency

and therefore their business consulting projects reflect that. While cost reduction

remains important regionally, enterprises have refocused globally. Consulting vendors

must:

Exploit technical and functional insights to attract customers.

Identify opportunities to consistently deliver on client expectations, especially

timely delivery of services.

Maximize the business value of projects, reach a common and consistent

understanding with key stakeholders on the success criteria, and publicize

successes.

Develop core messages that highlight how to improve operational efficiency and

reduce costs.

As 2012 continues, firms that can best address the regionally specific shifts in client

requirements will be best positioned to gain share.

S y n o p s i s

This IDC study uses the IDC MarketScape model to provide an assessment of a

number of providers participating in the worldwide business consulting services

market. The IDC MarketScape is an evaluation based on a comprehensive framework

and a set of parameters that assesses providers relative to one another and to those

factors expected to be most conducive to success in a given market during both the

short term and the long term.

"While consulting providers are generally perceived as capable, buyers of consulting

services believe consulting vendors are weakest at ensuring projects meet their

projected return on investment. This vendor analysis shows that some vendors are

better able to produce meaningful results than others." Cushing Anderson,

program vice president, Business Consulting Services research


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C o p y r i g h t N o t i c e

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