managing the solutions services portfolio - a competitive analysis

Solution Integration Strategies

Managing the Solutions Services Portfolio:

A Competitive Analysis Analyst: Stephanie M. Torto

Filing Information

November 2001 IDC #25777 Volume: 1 Tab: Vendors

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Table of Contents

Page

Executive Summary................................................................................................................................... 1 Overview .............................................................................................................................................. 1 Market Dynamics................................................................................................................................. 1 Competitive Trends.............................................................................................................................. 2 Comparative Analysis .......................................................................................................................... 2 Recommendations............................................................................................................................... 3

Methodology............................................................................................................................................... 5 Vendor Selection Process .................................................................................................................... 5 Solutions Services Defined.................................................................................................................. 5 Related Research.................................................................................................................................. 6

Introduction............................................................................................................................................... 7 Market Dynamics................................................................................................................................. 7

Competitive Trends .................................................................................................................................. 11 Managing the Solutions Services Portfolio ...................................................................................... 11 Solutions Services Portfolio by Company......................................................................................... 12

Benchmarking and Analysis .................................................................................................................... 15 Definition of Leadership Grid Parameters ........................................................................................ 15 Position of Solutions Services Firms................................................................................................ 17

Recommendations and Conclusion......................................................................................................... 19 Conclusion......................................................................................................................................... 19 Recommendations............................................................................................................................. 19

Profiles...................................................................................................................................................... 21

Accenture ................................................................................................................................................. 23 Overview ............................................................................................................................................ 23 Solutions Services Portfolio.............................................................................................................. 23 Strategy.............................................................................................................................................. 25 Marketing and Sales .......................................................................................................................... 25 Service Delivery ................................................................................................................................. 25 Partnerships....................................................................................................................................... 26

Andersen................................................................................................................................................... 27 Overview ............................................................................................................................................ 27 Solutions Services Portfolio.............................................................................................................. 27 Strategy.............................................................................................................................................. 29 Marketing and Sales .......................................................................................................................... 30 Service Delivery ................................................................................................................................. 30 Partnerships....................................................................................................................................... 30

Table of Contents Continued

Page

Cap Gemini Ernst & Young...................................................................................................................... 31 Overview............................................................................................................................................. 31 Solutions Services Portfolio .............................................................................................................. 31 Strategy.............................................................................................................................................. 33 Marketing and Sales .......................................................................................................................... 33 Service Delivery ................................................................................................................................. 34 Partnerships....................................................................................................................................... 34

Computer Sciences Corporation.............................................................................................................. 37 Overview............................................................................................................................................. 37 Solution Services Portfolio................................................................................................................ 37 Strategy.............................................................................................................................................. 39 Marketing and Sales .......................................................................................................................... 39 Service Delivery ................................................................................................................................. 40 Partnerships....................................................................................................................................... 40

Deloitte Consulting .................................................................................................................................. 41 Overview............................................................................................................................................. 41 Solutions Services Portfolio .............................................................................................................. 41 Strategy.............................................................................................................................................. 43 Marketing and Sales .......................................................................................................................... 43 Service Delivery ................................................................................................................................. 43 Partnerships....................................................................................................................................... 43

EDS........................................................................................................................................................... 45 Overview............................................................................................................................................. 45 Solutions Services Portfolio .............................................................................................................. 45 Strategy.............................................................................................................................................. 47 Marketing and Sales .......................................................................................................................... 47 Service Delivery ................................................................................................................................. 47 Partnerships....................................................................................................................................... 47

IBM Global Services ................................................................................................................................. 49 Overview............................................................................................................................................. 49 Solutions Services Portfolio .............................................................................................................. 49 Strategy.............................................................................................................................................. 50 Marketing and Sales .......................................................................................................................... 51 Service Delivery ................................................................................................................................. 52 Partnerships....................................................................................................................................... 52

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Table of Contents Continued

Page

KPMG Consulting .................................................................................................................................... 53 Overview ............................................................................................................................................ 53 Solutions Services Portfolio.............................................................................................................. 53 Strategy.............................................................................................................................................. 54 Marketing and Sales .......................................................................................................................... 55 Service Delivery ................................................................................................................................. 56 Partnerships....................................................................................................................................... 56

PricewaterhouseCoopers.......................................................................................................................... 57 Overview ............................................................................................................................................ 57 Solutions Services Portfolio.............................................................................................................. 57 Strategy.............................................................................................................................................. 58 Marketing and Sales .......................................................................................................................... 59 Service Delivery ................................................................................................................................. 59 Partnerships....................................................................................................................................... 59

Unisys ....................................................................................................................................................... 61 Overview ............................................................................................................................................ 61 Solution Services Portfolio ............................................................................................................... 61 Strategy.............................................................................................................................................. 62 Marketing and Sales .......................................................................................................................... 63 Service Delivery ................................................................................................................................. 63 Partnerships....................................................................................................................................... 64

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List of Tables

Table Page

1 The Shift in Solution Services Market Dynamics ........................................................................ 7

2 Differences Across the Solutions Services ................................................................................. 13

3 Accenture Key Corporate Data ................................................................................................... 23

4 Accentures Key Partnerships and Alliances............................................................................... 26

5 Andersen Key Corporate Data..................................................................................................... 27

6 Andersens Key Partnerships ...................................................................................................... 30

7 Cap Gemini Ernst & Young Key Corporate Data ....................................................................... 31

8 Cap Gemini Ernst & Youngs Service Line and New Market Groups, 2001 .............................. 32

9 Cap Gemini Ernst & Youngs Key Partnerships ......................................................................... 35

10 CSC Key Corporate Data............................................................................................................. 37

11 CSC Consultings Services Offerings.......................................................................................... 38

12 CSCs Key Partnerships............................................................................................................... 40

13 Deloitte Consulting Key Corporate Data.................................................................................... 41

14 Deloitte Consultings Service Lines............................................................................................ 42

15 Deloitte Consultings Key Partnerships ..................................................................................... 44

16 EDS Key Corporate Data............................................................................................................. 45

17 EDS E.Solutions Service Lines.................................................................................................. 46

18 EDS Key Partnerships................................................................................................................ 48

19 IBM Global Services Key Corporate Data................................................................................... 49

20 IBM Global Services Business Innovation Services .................................................................. 50

21 IBM Global Services Key Partnerships ...................................................................................... 52

22 KPMG Consulting Key Corporate Data ...................................................................................... 53

23 KPMG Consulting Vertical Industries ........................................................................................ 55

24 KPMG Consultings Key Partnerships........................................................................................ 56

25 PwCs MCS Key Corporate Data.................................................................................................. 57

List of Tables Continued

Table Page

26 PwCs Key Partnerships............................................................................................................... 59

27 Unisys Overview .......................................................................................................................... 61

28 Unisys Services Offerings ........................................................................................................... 62

29 Unisys Key Partnerships............................................................................................................. 64

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List of Figures

Figure Page

1 Solutions Services Portfolio Share by Company, 2000.............................................................. 14

2 IDCs Leadership Grid: Solutions Services Market .................................................................... 16

3 Accentures Revenue by Solution Service, 2000 ........................................................................ 24

4 Andersens Revenue by Solution Service, 2000.......................................................................... 29

5 Cap Gemini Ernst & Youngs Service Line and New Market Groups Revenue Share, 2001 ......................................................................................... 32

6 Cap Gemini Ernst & Youngs Revenue by Solution Service, 2000 ............................................ 33

7 CSCs Revenue by Solution Service, 2000.................................................................................. 38

8 Deloitte Consultings Revenue by Solution Service, 2000......................................................... 42

9 EDS Revenue by Solution Service, 2000................................................................................... 46

10 IBM Global Services Revenue by Solution Service, 2000 ......................................................... 51

11 KPMG Consultings Revenue by Solution Service, 2000 ........................................................... 54

12 PwC MCS Revenue by Solution Service, 2000 .......................................................................... 58

13 Unisys Revenue by Solution Service, 2000................................................................................ 62

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Abstract

Managing the Solutions Services Portfolio: A Competitive Analysis

Several dynamics are converging within the solutions services market. During the last few years clients needs have transitioned from individual solutions to solutions that address the entire needs of an integrated enterprise. As a result, service providers that once went to market around segregated areas such as supply chain management (SCM) services or customer relationship management (CRM) services are being asked to tear down these marketing-related terms in favor of a holistic approach to the enterprise.

This report outlines how the leading systems integrators are responding to these challenges. It details each firms solutions services portfolio, highlights recent changes, and analyzes each firms strategy. It includes a leadership grid that evaluates the leading systems integrators against selected criteria.

The systems integrators profiled in this report are as follows:

Accenture

Andersen

Cap Gemini Ernst & Young

CSC

Deloitte Consulting

EDS

IBM Global Services

KPMG Consulting

PricewaterhouseCoopers

Unisys

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Executive Summary

Overview

The solutions services market is shifting. Driven in part by clients needs for an integrated approach to their business and IT needs, service providers that once organized themselves around a specific technology or business function are collaborating within their organization more so than ever before in order to present a unified solution to their clients overarching business problems.

Although these enhanced client demands may pose challenges for services firms that aim to execute effectively on a global basis, it also presents opportunities for firms to leverage, consolidate, and reorient their service offerings, best practices, methodologies, and expertise into tangible results.

Market Dynamics

Several fundamental shifts have occurred in the solutions services market that have resulted in the following:

Utilization of a holistic, integrated approach to the enterprise. Whereas clients previously bought solutions services around a particular business function, they are increasingly demanding a more unified approach to their customers, partners, and suppliers as well as the companys internal processes.

Inclusion of the business owner or C-level executive as a primary stakeholder. The change in the primary decision maker validates the clients need to understand the underlying business value inherent in IT projects. In many cases, service providers are making their sales pitch directly to the CEO.

Emphasis on creating business value through IT investments. Going forward, the underlying objective of IT projects will revolve around companies abilities to leverage IT investments to streamline operational processes, identify business opportunities, and manage customers, partners, and suppliers more effectively.

Focus on developing fewer relationships with service providers. As the solutions services market has started to consolidate, in part due to the softening economic environment and changing client needs for comprehensive service capabilities from one service provider, clients are turning to one partner for many of their IT needs.

Specialization in vertical industries a must have. One way in which service firms are able to differentiate themselves for competitive advantage is through specialization in a particular industry. This has become a business imperative and a mechanism for which service providers can effectively demonstrate their understanding of their clients business processes.

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Competitive Trends

IDC observed the following trends among the service providers interviewed for this research:

Maintaining transparency to the client. While maintaining individual practices areas are important from an organizational standpoint so that consultants are recognized for their distinct skill sets, it is becoming less relevant to customers who want enterprisewide solutions. It matters less and less where the entry point may be with a customer; what matters is the overriding goal of the engagement.

Merging CRM services and SCM services. Corporations are continually asking for an integrated view of their customers, be they end users, suppliers, or partners, that warrants a joint approach. As a result, some service providers have begun to merge these two previously distinct practice areas in order to fully leverage resources and bring a more unified face to their clients.

Utilizing a loose marketing approach to solutions. While systems integrators continue to see the ambiguity and risk in using such an overly used term in their marketing approaches, many are still committed to doing so because of the flexibility it allows them to constantly bend and massage their message.

Putting incentives in place to collaborate. Service firms are adapting to the markets needs by not only using incentives to ensure that separate practice areas work together but also holding practice leaders and sales personnel accountable for doing so.

Continuing to develop specialized skills. Many of the firms interviewed for this report train consultants in a particular technology or business process but do not tend to cross-train consultants. This approach ensures that consultants are experts in a particular area and, therefore, are better positioned to provide detailed, value-added advice to clients.

Comparative Analysis

In comparing the solution service areas tracked by IDC CRM services, knowledge management (KM) services, ecommerce services, SCM services, and enterprise resource management (ERM) services with those of the vendors profiled, IDC notes the following observations:

Most vendors have dedicated service lines for CRM services and SCM services, reflecting the growth potential of these two markets.

KM services and ecommerce services tend to be interwoven with other functional areas of vertical groups.

ERM services can be integrated with other functional areas and also act as a standalone offering in many cases.

Several vendors have organized around broad areas, such as buy, sell, and supply.

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One vendor has merged its CRM services and SCM services practices, a trend that IDC believes may increase.

Almost all vendors go to market by vertical industry.

Recommendations

To gain market share and align with market opportunities in the solutions services market, IDC recommends the following:

Strike a balance between specialization and being a full-service provider. Not only are service providers being asked to fully understand their clients businesses, they are also required to possess a range of service capabilities along the services continuum. In order to strike and maintain this balance, IDC recommends the following:

Implement vertically focused marketing initiatives. While the overall brand identify of a firm is critical to its ability to enhance its market position, it is also increasingly important to tailor different messages to various audiences.

Build or partner for full-service capabilities. IDC recommends demonstrating and emphasizing the companys depth of service offerings to clients. IDC believes the trend toward aggregated service delivery will continue in the solutions services market and recommends that those service providers without service capabilities across the design, build, and operate phases aggressively pursue them via acquisition or partnership.

Develop the skill sets of experts and generalists. IDC recommends that firms pursue targeted recruiting campaigns to complement any lacking skill sets. At the same time, IDC believes the role of the generalist should not be overlooked.

Maintain a dynamic organizational structure. IDC recommends adopting a more flexible organizational structure around particular themes. Although one could argue this may be transparent to the client, the de-emphasizing of such marketing-related terms as CRM and SCM may assist in keeping the emphasis on getting to a solution.

Put systems in place to accurately track joint opportunities. IDC recommends that service providers further invest in or optimize their own IT systems that can accurately measure the opportunities in a particular area and monitor pipeline generation across service areas and geographies.

De-emphasize solutions terminology. Although IDC acknowledges that the quest for solutions is a noble one, IDC recommends that service providers tone down the use of such terminology. Its continual use and omnipresence have diluted its exact intent; that is, to be a competitive differentiator.

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Methodology

This report is a product of both qualitative and quantitative information that IDC has collected from a broad spectrum of primary and secondary sources, including the following:

Comprehensive surveys and interviews with systems integrators

User surveys of IT spending, integrator usage, purchase plans, issues, and concerns

Published financial records and quarterly reports

Published news articles, press releases, and information from trade publications

IDC reports and bulletins

IDC demand-side and supply-side spending models

Historical market data

Note: All numbers in this document may not be exact due to rounding.

Vendor Selection Process

The companies that IDC selected to be included in this research met several criteria, including one of the following:

Total services revenue greater than $1 billion

Position within the top 10 spot in one or more of the five key solutions services areas identified by IDC

Significant portion of revenue derived from outside the United States

Solutions Services Defined

Solutions services include the consulting, implementation, support, operations, and training services delivered around one or more software applications either packaged or customized and related hardware platforms (e.g., deploying an ERP application, developing and managing an ecommerce site).

The parameters of solutions services include the following:

A contract must exist that defines for both parties the terms and conditions of the services to be provided.

A solutions services market includes multiple engagement types.

Solutions services exclude revenue generated from the sale of hardware and/or software.

Solutions services include spending on business activities, such as business strategy.

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A solutions services contract specifies both the solution being delivered and the engagement type.

IDC tracks and analyzes solutions services in the following areas:

CRM services

KM services

eCommerce services

SCM services

ERM services

See the individual forecast and analysis documents listed below for the definitions of these individual solutions services.

Related Research

Worldwide Solution Integration Services Forecast and Analysis, 20002005 (IDC #24803, June 2001)

Worldwide Supply Chain Management Services Market Forecast and Analysis, 20002005 (IDC #24694, June 2001)

Worldwide Internet Services Market Forecast and Analysis, 20002005 (IDC #24691, June 2001)

Worldwide ERM Services Market Forecast and Analysis, 20002005 (IDC #24645, June 2001)

Worldwide Customer Relationship Management Services Market Forecast and Analysis, 20002005 (IDC #24684, May 2001)

Knowledge Management: U.S. and Worldwide Forecast and Analysis, 20002005 (IDC #24658, May 2001)

Worldwide Systems Integration Services Market Forecast and Analysis, 20002005 (IDC #24638, May 2001)

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Introduction

Market Dynamics

Several dynamics are converging within the solutions services market. The needs of clients have evolved during the past few years from individual solutions to solutions that address all the needs of an integrated enterprise. As a result, service providers that once went to market around segregated areas, such as supply chain services or CRM services, are being asked to tear down these marketing-related terms in favor of a holistic approach to the enterprise. This has increasingly placed challenges on systems integrators to reorient their service offerings, service delivery methods, marketing strategies, and partnerships to effectively deliver services to clients.

An overview of these fundamental shifts in market dynamics are outlined in Table 1.

Table 1

The Shift in Solution Services Market Dynamics

Two to Three Years Ago Today

Discrete, functional approach to solutions

Holistic, integrated approach to the enterprise

Decisions made by IT manager Stakeholders typically include the business owner or C-level executive

Objective to solve a technical problem Emphasis on creating business value through IT investments

Multiple relationships with service providers

Focus on developing fewer relationships with service providers

Vertical industry knowledge a nice to have

Vertical industry specialization a must have

Source: IDC, 2001

Holistic, Integrated Approach to the Enterprise

Whereas clients previously bought solutions services around a particular business function, they are increasingly demanding a more unified approach to their customers, partners, and suppliers as well as the companys internal processes. During the past year, this has extended beyond the enterprise to include inter-enterprise needs.

Prior buying patterns may have been driven by the rush to implement packaged software solutions in light of Y2K uncertainty a few years ago. As a result, various departments of multinational companies invested in IT solutions that had little or nothing to do with other areas of the company.

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With the Internet continuing to raise customers expectations and competitive forces, clients are demanding a unified face to customers that is supported by a robust internal infrastructure. These systems must be able to create, disseminate, and aggregate essential data points from across the company.

Thus, service providers with discrete practices such as CRM services or ERM services are selling and delivering joint engagements more than ever before. In recognition of this trend, KPMG Consulting (KPMG) recently merged its SCM services and CRM services practices.

Stakeholder Typically Includes the Business Owner or C-Level Executive

As the relationship between IT investments and business objectives grows more intertwined, the client stakeholder of IT projects has also evolved. It is now strikingly common to have a more collaborative effort on the part of the client that brings together multiple stakeholders from both the IT and business functions. In these instances, the IT department may act as the key link between the internal stakeholders and the service provider rather than be held responsible for the technical implementation only.

The change in the primary decision maker also validates the clients need to understand the underlying business value inherent in any IT project. In many cases, service providers are making their sales pitch directly to the CEO. As a result, many service providers are adjusting their sales approach. EDS, for example, uses principals, or highly skilled business experts, to engage CEOs from the initial encounter.

Emphasis on Creating Business Value Through IT Investments

Going hand in glove with the changing nature of the primary stakeholder of IT projects, clients are demanding to know just what the return on their IT investments may be. Going forward, the underlying objective of IT projects will revolve around companies abilities to leverage IT investments to streamline operational processes, identify business opportunities, and manage customers, partners, and suppliers more effectively.

Furthermore, there has been a fundamental shift from the top line to the bottom line; that is, from not only thinking about IT as an avenue for generating business opportunities and other revenue streams but as a means to achieve cost savings as well. Additional factors may contribute to this shift, including the following:

The increased sophistication of the IT purchaser

An unwillingness to repeat past implementation mistakes

Smaller budgets due to an overall economic softening

In order to respond to this demand, many service providers now use diagnostic tools to help their clients prioritize project needs and identify areas in which they will receive the largest return on their investments. For example, IBM Global Services is utilizing an

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eBusiness Evaluation tool that assists clients in identifying the solutions services areas that have the greatest potential for their business.

Focus on Developing Fewer Relationships with Service Providers

To complement the shift from segregated functional areas that implement IT solutions to an enterprisewide approach, clients are focusing on fewer, but deeper, relationships with service providers. As the solutions services market has consolidated, in part due to the softening economic environment and changing client needs for comprehensive service capabilities from one service provider, clients want to turn to one partner for many of their IT needs.

Clients are looking to the service provider as a trusted advisor who can continue developing a deep understanding of their business, rather than switch services providers as IT projects stop and start again. Lastly, the idea of having one throat to choke may be appealing to clients who may be tired of managing many subcontractors. Instead, clients want to hold one company accountable for a successful implementation.

Vertical Industry Specialization a Must Have

Several years ago, few service providers went to market by vertical industry; today, there are few that do not. Part of this reason stems from the increased competition that larger, more established firms experienced during the late 1990s from smaller firms. One way in which these firms were able to create a competitive differentiator was through a specialization in a particular industry. This has become almost imperative due to the fact that clients require service providers to fully understand their business.

In order to achieve this goal, services providers have continued to deepen their expertise by vertical industry, and it has become an essential way in which service providers demonstrate their understanding of their clients needs and business processes.

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Competitive Trends

Managing the Solutions Services Portfolio

The current market dynamics pose challenges for service providers. Specifically, what do these changing dynamics mean for service providers that have formalized practices in the areas outlined by IDC? In addition, how are they responding to the challenges? Based on the research conducted, IDC observes several trends, which are outlined in the following sections.

Maintaining Transparency to the Client

While service providers have organized themselves over last several years around distinct areas such as CRM services or ERM services, it is becoming increasingly apparent that these marketing terms are carrying less and less meaning to clients. While maintaining individual practices areas are important from an organizational standpoint so that consultants are recognized for their distinct skill sets, it is becoming less relevant to customers that want enterprisewide solutions. It matters less and less where the entry point may be with a customer; what matters more is the overriding goal of the engagement. This may pose challenges in the future in accurately measuring revenue in these distinct areas.

In addition, putting together an appropriate service offering for a customer may involve somewhat of a juggling act. Service providers are challenged to bring together various components along industry, geographical, and functional areas to present one face to their customer. This requirement demands a constant balance between flexibility on the part of the service provider and quick responsiveness to market needs.

Merging CRM Services and SCM Services

While the majority of services providers interviewed for this research continue to organize internally by separate areas of specialization, it is important to note that KPMG Consulting is the first company to actually merge its CRM services and SCM services practices. According to KPMG Consulting, the company chose to merge the two practices as a direct response to client needs.

Clients are continually asking for an integrated view of the customer, be it an end user, supplier, or partner, that warrants a joint approach. KPMGs commitment to combining these practices attempts to address its clients business issues by better leveraging its resources to deliver a holistic solution. Furthermore, KPMG is placing less emphasis on marketing labels that may be distracting to clients. IDC expects to see a continued trend toward the merging of these two formally distinct areas.

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Utilizing a Loose Marketing Approach to Solutions

The definition of a solution remains a great mystery. While systems integrators continue to see the ambiguity and risk in using such an overly used term in their marketing approaches, many are still committed to doing so. When peeling the onion back a few more layers, it becomes apparent that the ambiguity in the term solution is an intentional one that allows service providers to bend, mold, and massage the term as needed.

However, most service providers do not place strict boundaries around the term solution, such as that it must include hardware, software, and services together or focus on a particular service offering or industry. Instead, the term is used vaguely to refer to the services wrapped around a particular industry, process, and technology, but must ultimately solve a business problem. This term undoubtedly may leave the client asking, Well, just what is not a solution? This may be a tougher question to answer, and it highlights the risk in using the term.

Putting Incentives in Place to Collaborate

Service firms are adapting to the market needs not only by using incentives to ensure that separate practice areas work together but also holding practice leaders and sales personnel accountable for doing so. For example, the practice leader for CRM services may be compensated for generating business through the supply chain services practice rather than through his or her discrete area only. However, services providers recognize the challenges in capturing the appropriate measurements accurately and in keeping client satisfaction the top priority.

Many account managers are being motivated to identify and sell collaborative engagements. For example, EDS implemented a robust, global measurement system for its client executives in order to ensure collaborative selling. Over a year ago, the company implemented a standardized selling scorecard to facilitate this process. Initial results have been positive and have contributed to the firms ability to execute effectively.

Continuing to Develop Specialized Skills

Many of the firms interviewed for this report train consultants in a particular technology or business process but do not tend to cross-train consultants. This approach ensures that consultants are experts in a particular area and, therefore, are better positioned to provide detailed, value-added advice to clients. However, consultants receive an overview of other solutions services so that additional opportunities can be identified outside their particular area of specialization.

Solutions Services Portfolio by Company

IDC recognizes that vendors utilize a variety of different approaches in organizing their services offerings. IDC has attempted to

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highlight the differences by company and by the five major solutions services areas tracked by IDC (see Table 2).

Table 2 Differences Across the Solutions Services

CRM Services KM Services

eCommerce Services SCM Services ERM Services

Accenture Standalone service line

Part of Human Performance service line

Part of Solutions Engineering service line

Standalone service line

Part of Solutions Engineering service line

Andersen Customer and Channel service line

Part of Strategy, Organization & People

Part of Technology Integration


Part of Enterprise Applications

CGE&Y Standalone service line

Embedded in other services lines




CSC Customer Solutions service line

Recently launched, focusing on the energy space

Part of SCM services


Organized by ISVs: SAP, Oracle, Peoplesoft

Deloitte Consulting Standalone offering in Sell Side

Part of Exchanges Standalone service in Buy Side

Standalone service in Inside

EDS Standalone in Digital Value Chain

Integrated with CRM services


Standalone in Digital Value Chain

Standalone in Digital Value Chain

IBM Global Services

Standalone in Sell & Support

Part of eBusiness integration

Embedded in Sell & Support and Buy & Supply

Standalone in Buy & Supply

Part of Enterprise Resources

KPMG Consulting Merging with SCM services



Merging with CRM services

Part of Enterprise Solutions

PwC Standalone service line

Embedded in other service lines



Part of SCM service line

Unisys Standalone service line



Part of industry groups

Source: IDC, 2001

It is evident from looking at Table 2 that the majority of companies have standalone offerings in CRM services and SCM services, which highlights the strong growth in these two areas. In fact, these two areas have been the least affected by the slowdown in the economy due to their focus on increasing efficiencies, cutting costs, and managing relationships with customers. In addition, relatively speaking these two areas are less mature than ERM services, for example, and may dictate the development of specific skill sets.

Conversely, ERM services, the most mature area of the five major areas, has tended to be more embedded within vertical industry groupings. Unisys, for example, has tailored its ERM services offerings to vertical industries in order to provide detailed, value-added solutions targeted at specific client needs.

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It is also interesting to note that over the past year several service providers have tended to group their offerings under looser, more fluid headings to reflect their service offerings. For example, Deloitte Consulting now organizes its practices under headings such as Buy Side, Inside, and Sell Side. IBM Global Services also uses such terminology, and EDS and Unisys are migrating toward this model.

KM services and ecommerce services tend to be more intertwined throughout other standalone offerings and is reflective of their cross-functional applicability rather than being distinct areas. KM services, in particular, represents a relatively smaller market opportunity; thus, it can be argued that KM services are more effective when integrated with other services offerings.

Figure 1 presents an overview of the worldwide solutions services portfolios by company.

Figure 1 Solutions Services Portfolio Share by Company, 2000

Source: IDC, 2001

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Benchmarking and Analysis

In an attempt to measure how well the services firms profiled in this report are aligned with the market opportunity and how well each services firm is positioned to capture market share, IDC developed the Solutions Services IDC Leadership Grid. This benchmarking analysis is meant to provide a comparative overview of vendors solutions services offerings and competitive positioning. At the same time, the IDC Leadership Grid is intended to help vendors as they position themselves in the market via marketing messages and activities.

Definition of Leadership Grid Parameters

The Leadership Grid has been constructed along two axes: alignment with market needs and ability to gain market share. The axes are intended to be treated separately. Thus, poor alignment with market needs has no bearing on how well a service provider is positioned to gain market share.

Opportunity Alignment (X-Axis)

This axis communicates how well a service firm has aligned its services with the market need. In measuring a service providers alignment with market needs, IDC evaluates a vendors ability to set standards, its market share, its potential for market dominance, and its services breadth.

Ability to set industry standards. Vendors were measured based on their ability set the standards within the services industry. Considered were dynamics such as the vendors expertise within vertical industries, cutting-edge solution development for clients, and thought leadership.

Market share. IDC evaluated vendors by their aggregate revenue in the solutions services market as defined by IDC.

Potential for market dominance. This measurement relates to a vendors potential to increase revenue and thus gain market share and overall market positioning.

Services breadth and depth. Driving the services market is the need to integrate projects with other IT systems and business needs. To do this effectively, established service firms need to offer a full set of end-to-end services in order to be aligned with market need. The established vendors ability to do so internally and with partnerships is measured.

Ability to Gain Share (Y-Axis)

This measure illustrates a companys ability to gain market share based on a broad qualitative averaging of a vendors brand recognition, its ability to manage across solutions services, and the effectiveness of a collaborative selling model.

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Brand recognition. The level of customers familiarity with

certain vendors contributes to a vendors ability to gain share. Thus, based on IDCs ongoing quantitative and qualitative research, IDC evaluated a services providers brand recognition.

Ability to manage across solutions services. The shifts in the solutions services market demand that service providers bring together resources from separate functional groups to provide holistic solutions to their clients. Thus, vendors were measured on their overall solutions services strategy as well as their joint service delivery method.

Effectiveness of collaborative selling model. Going forward, there is no question that a unified sales model will become the most

Figure 2 IDCs Leadership Grid: Solutions Services Market

Accenture

Andersen

CGE&Y

CSC

Deloitte EDS

IBM GSKPMG

PwC

Unisys

Opportunity Alignment

Abi

lity

to G

ain

Shar

e

Niche Leadership

Crisis Potential Legacy

Low High

Low

Hig

h

Source: IDC, 2001

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crucial factor in a service providers ability to gain share. IDC assesses the level to which service firms utilize various mechanisms and measurements to ensure a collaborate selling model.

Position of Solutions Services Firms

The following section provides a qualitative analysis of each services firm in the IDC Leadership Grid and summarizes each service firms competitive position. A detailed profile of each services firm appears later in this report.

IBM Global Services

IBM Global Services (GS) is well positioned to capture market share based on its strong brand recognition and its depth and breadth of services, both within the Business Innovation Services unit and its other lines of business. IBM GS recognizes the areas in which it needs to bolster its capabilities and has taken steps to do just that, as evidenced by its recent acquisition last spring of Mainspring Consulting, a strategy boutique. At the same time, IBM GS heritage in systems integration and outsourcing will bode well for the company as clients increasing look for vendors to complete the services continuum.

Accenture

Despite Accentures recent name change earlier this year, the company continues to enjoy strong brand recognition. Accenture has continued its path as a thought leader, particularly within the CRM services and SCM services arenas. The companys strong consulting heritage plays to its favor due to the current market dynamics. Accentures outsourcing capabilities is an area of strategic investment for the company and one that can nicely round out its services capabilities and diversify its revenue streams. Accentures challenge will be to smoothly transition to its new status as a public company.


PwC brings strong brand recognition with it to the solutions services market. The company is able to bring a solid blend of consulting and technical skills to the table. PwCs biggest challenge may be in understanding just want its next step will be. While many of its competitors have either spun off from their auditing parents and gone public or merged with public companies, PwCs preoccupation with its next step could cause it to lose momentum. Nonetheless, the companys thought leadership and track record serve it well.

EDS

EDS alignment with the market opportunity can be attributed to its full-scale service offerings across its four major service lines. EDS has also gained momentum over the past few years in its E.solutions business, particularly as it has more clearly articulated its relationship

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with A.T. Kearney. EDS challenge will be to further enhance its brand in order to gain market share from its competitors.

KPMG Consulting

KPMG Consulting is well aligned with the ability to gain share due to the companys progressive strategy in managing its solutions services portfolio as well as its foray into the outsourcing business, a move that may be instigated by its new status as a public company. However, KPMG has lost considerable strength overseas in going public. It is now trying to make up lost ground, and this loss could pose a challenge for the company going forward.


With CGE&Ys integration complete, the firm is able to more effectively execute and combine its strengths in systems integration from Cap Gemini with its consulting abilities at Ernst & Young. The firm has made progress in communicating its new brand, but it still lacks somewhat in this area behind its U.S. competitors. Conversely, CGE&Ys presence in Europe may give it an advantage in the emerging mobile technology and services areas.

Deloitte Consulting

IDC believes Deloittes renewed momentum from its internal reorganization as well as its marketing initiatives may benefit the firm in the future and allow it to gain market share. Deloitte has a strong and flexible structure that allows it to more effectively deliver joint engagements to its customers.

CSC

CSC has strong technical capabilities but continues to have less brand recognition than its competitors, and it is more known for its strong heritage in outsourcing than consulting. However, the companys recent reorganization, although somewhat late, may help give the company the focus and clearly articulated message it has needed over the past few years.

Unisys

Unisys position reflects the companys gradual progress within the solutions services market. At times plagued by its hardware heritage, the company lacks a certain brand cache in the solutions services space. However, the company bring strong vertical expertise that will be an asset as it further develops its capabilities and demonstrates its value to clients.

Andersen

Although Andersen has strong business consulting capabilities, the company lacks the full-scale services offerings of its larger competitors. Andersen is also somewhat hampered by its lack of brand recognition or even confusion, having been associated with

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Accenture, formerly Andersen Consulting, and recently switching its name from Arthur Andersen to simply Andersen.

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Recommendations and Conclusion

Conclusion

The solutions services market is undergoing change. Driven by companies needs for a fully integrated approach to the enterprise, service providers are enhancing their consulting capabilities, targeting high-growth vertical industries, and delivering projects jointly more than ever before.

While these enhanced client demands may pose challenges for services firms that aim to execute effectively on a global basis, it also presents opportunities for firms to leverage, consolidate, and reorient their service offerings, best practices, methodologies, and expertise into tangible results.

Recommendations

To gain market share and align with market opportunities in the solutions services market in the future, IDC recommends the following:

Strike a balance between specialization and being a full-service provider. There is no doubt that clients expectations of service providers have skyrocketed. Not only are service providers being asked to fully understand their clients businesses, but they are also required to have a wide range of service capabilities along the services continuum. In order to strike and maintain this balance, IDC recommends the following:

Implement vertically focused marketing initiatives. While the overall brand identify of a firm is critical to its ability to enhance it market position, it is also increasingly important to tailor different messages to various audiences. By targeting specific vertical industries in its marketing campaign, service firms may be able to more effectively demonstrate detailed business process knowledge and better measure itself against the competition within a specific vertical.

Build or partner for full-service capabilities. IDC recommends demonstrating and emphasizing the companys depth of service offerings to clients. IDC believes the trend toward aggregated service delivery will continue in the solutions services market and recommends that those service providers without service capabilities across the design, build, and operate phases aggressively pursue them by acquisition or partnership. For some firms that have an outsourcing background, this may mean developing consulting capabilities while others with a consulting background may do the reverse. Although these may be competing business models, the former emphasizes technology operations with less people while the latter is dependent on a highly skilled labor pool. IDC believes those

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firms that are able to diversify across these areas will be best positioned in the future in the solutions services market.

Develop skill sets of experts and generalists. IDC recommends that firms pursue targeted recruiting campaigns in order to complement those skill sets that may be lacking. At the same time, IDC believes the role of the generalist should not be overlooked. There may be a significant role for these individuals who are able to look across numerous areas to identify opportunities rather than those who are so focused solely on their area of expertise.

Maintain a dynamic organizational structure. IDC recommends adopting a more flexible organizational structure around particular themes. This may be similar to some of the structures already in place by Deloitte Consulting and IBM Global Services, which have oriented their offerings around the themes of buy, supply, and inside. While one could argue this may be transparent to the client and thus irrelevant, the de-emphasizing of such marketing-related terms as CRM and SCM may assist in getting to the heart of the matter. Similarly, as KPMG Consulting is attempting, a more integrated approach may result in increased efficiencies, better utilization of consultants, and, ultimately, an increase in revenue.

Put systems in place to accurately track joint opportunities. While it may have been easier a few years ago to identify and resource opportunities by discrete areas, it is now a challenge given the nature of joint engagements. Thus, IDC recommends that service providers further invest in or optimize their own IT systems that can accurately measure the opportunities in a particular area and monitor pipeline generation across service areas and geographies. Without these mechanisms in place, opportunities may be obscured and resources inefficiently allocated.

De-emphasize solutions terminology. Although IDC acknowledges that the quest for solutions is a noble one, IDC recommends that service providers tone down the use of such terminology. Its continual use and omnipresence have diluted its exact intent (i.e., to be a competitive differentiator).

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Profiles

Each company listed in this report has a section covering the following topics as they pertain to their solutions services portfolio:

Company overview

Solutions services portfolio

Service offerings

Revenue

Vertical industries

Strategy

Marketing and sales

Service delivery

Partnerships

The following 10 companies are profiled:

Accenture

Andersen


CSC

Deloitte Consulting

EDS

IBM Global Services

KPMG Consulting


Unisys

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Accenture

Overview

Accenture is a management and technology consulting organization that earned revenue of $11.44 billion in fiscal 2001 and employs more than 75,000 people in 46 countries. The firm delivers a broad range of services and solutions through its network of businesses, including its consulting and outsourcing businesses, its operating companies, and its alliances and investments in new ventures. Accentures long-term quest for independence from its former parent company, Andersen, culminated in the companys debut on the New York Stock Exchange in July 2001.

Accenture goes to market through five global market units, which together comprise 18 industry groups. More than half of Accentures clients are Fortune Global 500 companies. Table 3 summarizes key data for the company.

Table 3 Accenture Key Corporate Data

Category Data

Founded 1989

Headquarters (key locations) New York, London, Tokyo

Office locations 110 in 46 countries

Number of services employees 75,000

FY01 worldwide services revenue $11.44 billion

Source: IDC, 2001

Solutions Services Portfolio

Accenture currently has eight major services lines through which it delivers business and information technology solutions. These services lines are as follows:

Strategy & Business Architecture. This practice provides a variety of strategic planning and design services.

Customer Relationship Management. The practice focuses on helping companies increase the value of their customer relationships.

Human Performance. This practice provides services to help clients solve human performance issues, such as recruiting and motivating employees. It also develops outsourced processes and training.

Finance & Performance Management. These services provide consulting regarding the design and structure of the finance function.

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Supply Chain Management. This practice helps clients optimize their supply chains and supplier and business partner networks.

Technology Research & Innovation. This group researches and commercializes solutions using new and emerging technologies.

Solutions Engineering. This practice focuses on designing, building, and deploying complex solutions that, in many cases, integrate business processes and technology.

Solutions Operations. This practice provides a range of outsourcing solutions for managing technology infrastructure, applications, and business processes.

Accentures KM services capabilities are part of its Human Performance service line, which focuses on workforce transformation, such as elearning and collaboration and communities. ERM services and ecommerce services fit within Accentures Solutions Engineering group.

According to Accenture, the firm is currently experiencing strong demand in a few areas: marketing services, ucommerce (i.e., ubiquitous commerce), and enterprise application integration (EAI) services. The growth in EAI services can be attributed largely to the need to tie together disparate legacy and packaged applications as well as the demand to Web-enable legacy systems to support ebusiness initiatives.

IDCs estimates for Accentures CY00 revenue in the five areas tracked by IDC are depicted in Figure 3.

Figure 3 Accentures Revenue by Solution Service, 2000

Source: IDC, 2001

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Accenture delivers its services through five global market units, which further breakdown into 18 industry groups. Accentures five global market units are as follows:

Communications and high technology

Financial services

Products

Resources

Government

Strategy

Accenture has witnessed several shifts in its clients demand over the past few years. First, clients are focusing on deeper relationships with service providers as they implement mission-critical business processes and technologies. Clients are turning to service providers as advisors while they undergo significant transformations to their businesses. Furthermore, clients are looking to service providers for capabilities throughout the services life cycle, from business strategy and processes to operations.

Accenture acknowledges that the shift in clients demands now requires joint service delivery across its service lines. For example, it is quite common for any client engagement to now include capabilities from three to five service lines. While the company sees synergies between its CRM services and SCM services practices, it is committed to managing these areas separately in order to properly manage skill sets and distinct business process requirements.

Marketing and Sales

Accenture uses the terminology solution within its marketing strategy in order to simply convey the message that Accenture is dedicated to helping clients solve their business problems. Solutions may cut across any of Accentures eight service lines. These solutions also possess a number of services capabilities and consist of an industry-specific context.

Accenture has client relationship partners dedicated to client accounts. The role of these individuals is to bridge the clients needs with Accentures range of services to develop a solution for the client. While these individuals possess specific industry and functional expertise, their primary responsibility is to shape a holistic solution for the client.

Service Delivery

According to Accenture, the firms client-oriented culture has contributed positively to its joint engagement delivery. In addition, its single, consistent methodology across multiple disciplines, its large knowledge base, and its strong technical capabilities combine to create an effectively networked organization.

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Accentures newer employees receive broad foundation training so that they may gain exposure to other areas before deciding where to specialize. Thus, Accenture prefers its consultants to develop deep expertise in a particular area rather than be a group of generalists.

Partnerships

Table 4 lists some of Accentures key partnerships and alliances.

Table 4 Accentures Key Partnerships and Alliances

Solutions Service Partnerships

CRM services Siebel Systems, Kana, AKQA, Blue Martini, Seisint

KM services Docent, Corporate Yahoo!, Indelig, Workbrain, SAP Portals

eCommerce services Broadvision, Calico, Vignette

SCM services Commerce One, Ariba, i2, Yantra

ERM services PeopleSoft, SAP, Oracle

Other Microsoft, Hewlett-Packard, Sun Microsystems, Avanade, Novient, SeeBeyond, Imagine Broadband Limited, epeopleserve, ICG Commerce

Source: IDC, 2001

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Andersen

Overview

Founded in 1913 as Arthur Andersen, the firm announced that as of March 5, 2001, it would be known simply as Andersen. As a consulting firm that aims to plan and develop solutions that create organizational value, Andersen employs over 88,000 people in more than 380 offices worldwide. While Andersens total revenue for FY01 was $9.3 billion, its Business Consulting practice contributed approximately $1.7 billion of total revenue and has more than 11,000 employees.

Andersen is committed to keeping its consulting and tax and audit businesses together, despite potential SEC resistance, and it has not indicated that it plans to go public or separate its businesses like several of its competitors did. Table 5 summarizes key data for the company.

Table 5 Andersen Key Corporate Data

Category Data

Founded 1913

Headquarters Chicago, Illinois

Office locations 380 worldwide

Number of Business Consulting employees 11,000

FY01 worldwide Business Consulting revenue $1.7 billion

Source: IDC, 2001


Andersens Business Consulting practice consists of the following two major lines of business:

Enterprise Solutions

Market Solutions

According to Andersen, the primary focus of Enterprise Solutions is inside the enterprise, such as HR, finance, and operations. The focus of Market Solutions is outside, as in a clients relationship with its partners, suppliers, and customers. Andersen is also investigating the emerging area of mobile services, determining where it will fit into its mix of service offerings.

A further description of these two lines of business is as follows:

Enterprise Solutions

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Enterprise Applications. Solutions related to information technology strategies, selection, and implementation of enterprise resource planning (ERP)

Finance and Operations. Solutions related to the innovation and transformation of the finance function

Strategy, Organization, and People. Solutions related to the executive suite and business unit management, in the fields of strategy, organization, change, and people

Market Solutions

Customer & Channel. Solutions related to the evaluation, design, and implementation of processes and technologies for customer management activities

Supply Chain. Solutions related to the evaluation, design, and implementation of supply chain strategies, processes, and technologies

Technology Integration. Solutions that link the consulting services by integrating the applications that support individual client processes, such as CRM, supply chain, and ERP

Until recently, the Business Consulting practices lines of business also included Strategy and Value Solutions, which had four distinct offerings: Strategy Development, Economic Consulting, Intellectual Asset Management, and Claims & Disputes. Strategy development was moved to the Enterprise Solutions line of business to be better aligned with the Strategy, Organization, and People solution. The remainder of this line was moved to Andersens Audit & Business Advisory practice in order to fully leverage the complementary skill sets that existed in that unit.

IDCs estimates for Andersens CY00 revenue in the five areas tracked by IDC are depicted in Figure 4.

Andersens primary go-to-market vertical industries are:

Products

Energy and utilities

Technology, media, and communications

Financial services

Pharmaceuticals, biomedicine, and health

Real estate and hospitality

Government services

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Strategy

Andersen acknowledges the thin walls that exist between its various services offerings within and between Enterprise Solutions and Market Solutions. Andersen has traditionally gotten its bread-and-butter from high-end, business process consulting, and it continues to do so. As a result, Andersen has benefited from clients need to realize the business value of IT investments.

Conversations with clients now extend across the enterprise and are reflected in Andersens flexible solution service delivery, the cornerstone of which is its market integration strategy. Andersen is committed to its current organizational structure and will keep its service offerings distinct in order to leverage the expertise of its consultants.

Andersen believes it derives a competitive advantage from its relationship with the other three practices that make up Andersen, namely the following:

Audit & Business Advisory

Tax, Legal & Business Advisory

Global Corporate Finance

Contrary to many of its competitors that have spun off from their auditing arms over the past few years either to merge with another company, like Cap Gemini Ernst & Young, or to spin off and go public, such as Accenture and KPMG Consulting Andersens Business Consulting practice is committed to its relationship with Andersen.

Figure 4 Andersens Revenue by Solution Service, 2000

Source: IDC, 2001

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By leveraging Andersens other practices, the Business Consulting practice feels it is able to provide more valuable business insight to its clients. For example, Andersen is working with a North American led firm that has a supply chain issue in Brazil. Andersen is providing supply chain expertise as well as advice on dealing with taxation issues.

Marketing and Sales

Andersens current iteration of its go-to-market strategy and its support of internal organization is a reflection of the changing needs of its clients. Specifically, during the 1980s, the focus of client engagements revolved around a functional or process area. In the 1990s, the focus turned to business integration (i.e., integrating separate functional areas to operate as a cohesive unit). In 2000, the emphasis has been on enabling different organization to work together, or what Andersen calls Market Integration, which is the foundation of its strategy.

Service Delivery

In light of its practice of managing across different solution services areas, Andersen believes in creating deep skill sets in certain areas in order to maintain a competitive advantage. Although a consultants primary focus is in his or her area of expertise, consultants have a high-level understanding of Market Integration as well.

To facilitate collaboration across the service areas, Andersen has both group- and individual-level measures. This ensures that partners are motivated to meet their own revenue goals as well as those of their counterparts in the other service practices.

Partnerships

Table 6 lists some of Andersens key partnerships.

Table 6 Andersens Key Partnerships


CRM services Siebel Systems, Blue Martini

KM services Microsoft, Vignette

eCommerce services Vignette, IBM

SCM services Ariba, i2 Technologies

ERM services SAP, Oracle, J.D. Edwards, PeopleSoft

Other services IBM, Sun, Microsoft

Source: IDC, 2001

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Overview

Cap Gemini Ernst & Young is a global IT services company that was formed as a result of Cap Geminis acquisition of Ernst & Young Consulting in May 2000. The two companies have combined FY00 revenue of $7.75 billion, or 8.45 billion euro (based on the 2000 average exchange rate of 1 euro = $1.09), and employ about 60,000 people. Its global reach includes offices in more than 30 countries. Its client base contains two-thirds of global Fortune 500 companies.

Cap Gemini Ernst & Young is a publicly traded company. It is traded on the Paris Bourse, and its symbol is CAP. Table 7 summarizes key data for the company.

Table 7 Cap Gemini Ernst & Young Key Corporate Data

Category Data

Founded 2000

Headquarters Paris, France

Office locations Over 30 worldwide



Source: IDC, 2001


CGE&Ys four major service lines are listed in Figure 5. These four service lines are further segmented, as shown in Table 8.

The New Market Group focuses on incubating service offerings in new markets that eventually become standalone offerings. Mobile commerce is an example of a service that will eventually be embedded into all of CGE&Ys service lines. The B2B Marketplaces service will merge with its Supply Chain service, a trend validated by the convergence of these two areas in the market. Lastly, its DareStep practice is focused on usability and user experience and will be rolled into its CRM services line, although it will maintain its brand name. In 4Q01, the company will identify and formalize new areas of development that will be incubated in the New Market Group.

IDCs estimates for CGE&Ys CY00 revenue in the five areas tracked by IDC are depicted in Figure 6.

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Table 8 Cap Gemini Ernst & Youngs Service Line and New Market Groups, 2001

Business Consulting and Systems Technology Outsourcing Strategy and New Market Groups

Customer Relationship Management

Technology Consulting Application Management Strategy and Transformation

Supply Chain Advanced Development and Integration

Infrastructure Management/BPM

New Market Groups:

B2B Marketplaces

Support Services Network Infrastructure Services DareStep User Experience

EEA/ERP Mobile Commerce

Source: CGE&Y, 2001

CGE&Ys primary vertical industries are as follows:

Financial services

Telecom media networks

Consumer products, retail, and distribution

High technology and automotive

Healthcare, public sector, and other services

Energy and utilities

Life sciences and chemicals

Figure 5 Cap Gemini Ernst & Youngs Service Line and New Market Groups Revenue Share, 2001

Source: CGE&Y, 2001

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Strategy

A fundamental change in CGE&Ys approach over the past 18 months has been a shift from discrete service offerings to a more holistic portfolio. The focus has turned toward the linkages across its service lines for several reasons. The first is driven by an increase in value to clients, who are now demanding services across the portfolio and within it. As a result, CGE&Y has increased its internal collaboration and cross-service line delivery, which ultimately allows it to be more effective and to presents one face to the customer.

Although CGE&Y has witnessed a merging of supply chain services and CRM services in the marketplace, it is committed to operating these two services closely but not as one unit. CGE&Y sees more blending at the technical level, such as common application architectures, rather than at the business level. Therefore, it believes a delineation between the two is necessary for staffing purposes in order to ensure that the necessary specialist experience and content is delivered on engagements.

Marketing and Sales

At Cap Gemini Ernst & Young, a solution addresses a business issue by bringing together the appropriate service offering and industry expertise. A solution does not end after the identification of a problem, but rather it is tracked until a problem is solved.

CGE&Y believes it differentiates itself by starting at the strategic level with its clients and intertwining the technology and strategy

Figure 6 Cap Gemini Ernst & Youngs Revenue by Solution Service, 2000

Source: IDC, 2001

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together in a continually iterative approach to implement a successful business transformation. Furthermore, CGE&Y also has strong internal knowledge management and elearning capabilities that allow it to effectively disseminate information and best practices on a global basis.

Service Delivery

CGE&Y currently has discrete worldwide practice leaders in each of its major services, such as a global director of CRM services and supply chain services. In addition, the company has lines of business that are integrated across the major areas. These executives are chartered with business development for the practice and focus not only on identifying discrete opportunities but also on those that foster the linkage to other areas as well.

CGE&Y has designed its service portfolio to highlight the linkages between the service offerings; engagement teams are challenged to look more broadly across the portfolio and identify areas to increase value in how they are addressing the client business issue. However, according to CGE&Y, one of the challenges in this approach is ensuring that consultants are aware of the breadth of offerings available in a rapidly changing environment. Although hard measures are difficult to track in this area, engagement teams are encouraged to continually review their projects to identify areas of additional client value.

CGE&Y has common global standards and project management methods for delivery in a platform called DELIVER. Within these standards each consultant is trained to suit their level of expertise and skill focus, for example, ERP implementation or architecture design. In addition to specific skills, consultants receive awareness training for other key skills pertaining to their particular engagement or service offer to ensure they can link effectively across the project teams. Webcast awareness and training sessions are widely used by the service line teams to share lessons learned from successful engagements.

Partnerships

Table 9 lists some of Cap Gemini Ernst & Youngs key partnerships.

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Table 9 Cap Gemini Ernst & Youngs Key Partnerships


CRM services Siebel Systems

KM services Microsoft

eCommerce services Broadvision, ATG, iPlanet, BEA, SAP Markets, IBM

SCM services Commerce One, i2, Manugistics

ERM services Oracle, mySAP.com, PeopleSoft, J.D. Edwards

Other Cisco, Sun, Microsoft, IBM

Source: IDC, 2001

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Computer Sciences Corporation

Overview

Founded in 1959 and headquartered in El Segundo, California, Computer Sciences Corp. (CSC) offers a broad array of professional services to clients in the global commercial and government markets. Its service offerings include outsourcing, systems integration, and IT and management consulting, among others. CSC has a long heritage in the public sector, especially within outsourcing.

CSC is publicly traded on the NYSE under the ticker symbol CSC. The company had $10.5 billion in revenue in FY01, with about 70% of it derived from North America and Europe. Table 10 summarizes key data for the company.

Table 10 CSC Key Corporate Data

Category Data

Founded 1959

Headquarters El Segundo, California

Office locations Over 600 worldwide



Source: IDC, 2001

Solution Services Portfolio

CSC Consultings service offerings are organized around the Plan, Build, Manage IT life cycle.

This is reflected in Table 11.

Comparing this hierarchy against IDCs tracking of major solutions services, CSC includes ecommerce services within its Supply Chain services practice. In addition, CSC recently launched a Knowledge Management services practice that focuses on the energy industry.

One area in which CSC is investing in order to fill out its strategy is in the aggregation and extraction of data, also referred to as business intelligence. CSC believes the ability to clean, aggregate, and analyze data to make strategic business decisions is becoming increasingly important. Due to heightened expectations as a result of ebusiness, clients demand data that is accurate and useful almost immediately. It is also driving a significant demand for integration in order to enable the aggregation.

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Table 11 CSC Consultings Services Offerings

Plan Build Operate

Fused IT-Business Strategy Customer Solutions Web Hosting

Business Strategy for Todays Economy ERM: SAP, Oracle, PeopleSoft Outsourcing

Shared Services and Process Re-engineering

Supply Chain AVM

IT Management for Mergers and Acquisitions

Catalyst 4D

Business Intelligence Enterprise Application Integration (EAI)

Customer Design Package Implementation

Custom Development

Enterprise Architecture and Performance Engineering

Organizational Transformation and Change

Source: CSC, 2001

IDCs estimates for CSCs CY00 revenue in the five areas tracked by IDC are depicted in Figure 7.

Figure 7 CSCs Revenue by Solution Service, 2000

Source: IDC, 2001

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Primary vertical industries for CSCs Consulting group are as follows:

Financial services

Information, communications, and entertainment (ICE)

Energy

Products and emerging markets

Healthcare, including payer, provider, and life sciences

Strategy

CSC recently underwent a restructuring of its solutions offerings. In order to more articulately streamline its message to clients as well as make it easier for its sales force to sell these solutions by industry, CSC dramatically reduced and simplified its packaging of solutions. As a result, it now has less than 20 solutions and has trimmed down its vendor alliances as well. Within these broad families, clients are able to drill down by indus