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WHY READ THIS REPOrt Today, business transformation is often about technology transformation. At the very least, business transformation is always technology-enabled, so what sort of consultants can best help clients envision and execute on their business transformation imperatives? In the past, high-level business process transformation initiatives were the domain of business consulting vendors such as McKinsey & Company, Bain & Company, and The Boston Consulting Group. Technology-focused IT services and consulting firms, many of whom used to execute on the transformation blueprints developed by the management consultants, are now starting to make a dent in that market as they begin to successfully marry their technology competency with vertical and horizontal domain and business consulting expertise. In Forresters 18-criteria evaluation of business technology transformation vendors, we identified the 10 most significant providers Accenture, Cognizant, Deloitte, HP, IBM, Infosys, KPMG, PwC, TCS, and Wipro in the category and researched, analyzed, and scored them. This report details our findings about how well each vendor fulfills our criteria and where they stand in relation to each other to help SVM professionals select the right partner for their business technology transformation engagements.
Table Of Contents
2 The Business Technology Transformation Market A Smorgasbord Of Providers Make Up The Market 3 Business Technology Transformation Evaluation Overview Forrester Evaluated Key Capabilities Of Providers Providers Have A Portfolio Of Tech-Enabled Business Transformation Projects 6 Deloitte, Accenture, And PwC Lead The Pack 8 Vendor Proles Leaders Have Business And Technology Acumen Strong Performers Have Specific Strengths Contenders Have A Strong Technology Focus 11 Supplemental Material
2012, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.
tHE bUSINESS tEcHNOlOGY trANSfOrmAtION mArKEt The business consulting market landscape continues to undergo a deep-seated shift. Business priorities are changing in the new normal, and applied technology is the answer to most business challenges, such as lowering costs, growing revenue, avoiding marginalization, improving competitiveness, and innovating. As corporate executives face a toxic mix of shrinking or stagnant IT budgets, a rapidly changing technology environment, and a multitude of business demands, they recognize that help/relief has to come from experts who are as technology savvy as they are business savvy. In looking at Deloittes definition of technology-enabled business transformation, we see that business and technology innovation are today inextricably linked: A technology-enabled business transformation is an enterprise transformation requiring an embedded IT transformation to achieve a targeted set of business benefits. And business centricity or technology centricity alone will not help companies achieve a meaningful transformation. The type of consultancies that are best poised to help their clients develop and execute on their business transformation projects are those that have equal amounts of business and technology acumen. In most cases, these projects start with a clearly identified business challenge, but the business professionals involved recognize that the solution will be enabled, in large part, by technology. Thus, the explicit focus of these projects is technology-enabled business transformation (as opposed to technology or IT transformation), because the projects start with the business. A Smorgasbord Of Providers Make Up The Market The business technology transformation market comprises a range of different providers, each approaching the market from its unique heritage and capabilities. The market can loosely be divided into two categories: 1) those coming from a management or business consulting background, or 2) those coming from a deep technology background. The classical management and business consulting firms are eager to evolve their IT capabilities, and the IT consultants and outsourcers are beefing up their business consulting units to capture market demand with:
End-to-end services, which reduce client-side complexity and avoid value leakage. In
the past, high-end consulting companies provided business strategy and domain expertise, and clients would use a more technology-centric services provider to implement the strategy. Unfortunately, when the strategy creator does not fully understand the technology landscape or the art of the possible in technology, it is impossible for it to understand what the optimal business strategy is. In addition, customers that use multiple providers for their transformation initiatives find that managing them is a significant additional effort, even if they already have strong vendor management capability. They can see the value leakage when the strategy implementer has not totally bought into or is familiar with the strategy itself. Clients understandably want to avoid the leakage associated with having to engage a separate and additional provider to implement the desired change strategy. Therefore they are increasingly looking for providers with the required business and technical capabilities to implement the transformation approach.
July 19, 2012
Business and tech capabilities, which engage new stakeholders in the transformation
process. Most transformation projects are no longer being generated by IT alone but are rather being run by a combination of IT and the business. And the business, more often than not, is the transformation driver. In fact, Phil Garland, the leader of PwCs CIO practice, confirms that more than 50% of his CIO practice customers are actually outside of IT (CFO, COO, and CMO)! And Kirk Strawser, managing partner at Wipro Consulting Services, believes that the business is spending about seven times more than IT on business/technology transformations. With the increasing involvement of the business, it is crucial that the services provider has credibility with both sets of stakeholders. To be successful, the provider may often take on the role of peacemaker or translator between different sides of the client organization, which, if done expertly, will also lead to higher levels of client satisfaction. One reason the more businessfocused providers scored so well in this Forrester Wave is because they have a historical and natural connection to business executives and have learned to engage with the IT executives over the years as their businesses became more technology-focused.
Vertical capabilities, which drive the front-end of the engagement. Vertical expertise enables
providers to take a go-to-market approach focused on client business issues. Clients want providers to fully understand their unique business pressures and concerns, and this can only be done by providers that have deep industry knowledge and insights and that are able to engage with IT and the business in a realistic solution-focused dialogue.
Deep methodological expertise, which leads to consistency and client satisfaction. Client
maturity levels have risen dramatically, and this in turn has led to new and higher expectations. Clients expect methodologies and tools to not only optimize the cost of the engagement but to guarantee a successful outcome. Clients want to make sure that they are buying the institutional and collective expertise of their services provider as opposed to just the contents of their lead consultants hard drive. Expertise in business process management, project management, change management, and technology-specific methodologies (such as Oracle Financials implementation methodology) are all now considered prerequisites from providers.
BUSINESS TEcHNOlOGY TrANSfOrmAtION EvAlUAtION OvErvIEw To assess the state of the business technology transformation market and see how the vendors stack up against each other, Forrester evaluated the strengths and weaknesses of the top business technology transformation providers. Forrester Evaluated Key Capabilities Of Providers After examining past research, user need assessments, and vendor and expert interviews, we developed a comprehensive set of evaluation criteria. We evaluated 10 vendors against 18 criteria, which we grouped into three high-level buckets (see Figure 1):
Current offering. We evaluated the transformation capability of vendors. This criterion also
addressed the balance between technology consulting and business consulting. The maturity of the providers change management skills, and, crucially, the ability to incorporate these skills in the client engagement, were key indicators as to whether the provider was really engaging in a transformation project or a point- or technology-focused project. Client references and the ability of the provider to utilize core methodologies and tools were also evaluated.
Market presence. Forrester analyzed the number of consultants who could be considered
dedicated to technology-enabled business transformation, as well as the number of purely technology-focused consultants who could be leveraged for technology-enabled business transformation.
Internal knowledge management (KM), reuse, and collaboration platform Organizational change management (OCM) capability and integration Methodology Change management methodologies Metrics and benchmarking The balance between technology consulting and business consulting revenues
Consulting engagements
Business organization
Organizational change practice Business alignment Management credentials Employee background Market presence Number of consultants
How many consultants across the company are dedicated to technology-enabled business transformation, and how many of those pure technology consultants can be leveraged for technology-enabled business transformations?
Source: Forrester Research, Inc.
Providers Have A Portfolio Of Tech-Enabled Business Transformation Projects Forrester included 10 vendors in the assessment: Accenture, Cognizant, Deloitte, HP, IBM, Infosys, KPMG, PwC, TCS, and Wipro. Each of these vendors has:
A technology-enabled business transformation or equivalent methodology. At least three references and two case studies that highlight its technology-enabled business
transformation capability.
DElOIttE, AccENtUrE, AND PWc lEAD tHE PAcK The evaluation uncovered a market in which (see Figure 2):
Vendors Deloitte, Accenture, and PwC lead the pack, combining technology and business.
These three companies stood out from the rest because of their deep vertical and business consulting capabilities combined with very strong technological competency. These three vendors have the ability to drive large-scale wholesale transformation engagements.
Vendors Cognizant, IBM, Infosys, KPMG, and Wipro offer competitive options. Although
these vendors scored in the same segment, they are each quite different in terms of their capabilities. From a similarity perspective, each had very strong client references and could demonstrate leadership in specific areas. However, they lagged in the depth and breadth of their technical competence or their business consulting competence meaning they have not yet achieved the optimal blend of technology and business capability.
Vendors HP and TCS perform strongly in technology engagements. Both HP and TCS clearly
demonstrated their technological expertise and will be considered by companies looking for more technology-led transformation engagements.
This evaluation of the business technology transformation market is intended to be a starting point only. We encourage readers to view detailed product evaluations and adapt the criteria weightings to fit their individual needs through the Forrester Wave Excel-based vendor comparison tool.
Deloitte
Infosys
KPMG
CURRENT OFFERING Tools Internal knowledge management (KM), reuse, and collaboration platform Organizational change management (OCM) capability and integration Methodology Change management methodologies Metrics and benchmarking The balance between technology consulting and business consulting revenues Client references Case studies STRATEGY Vendors vision Consulting engagements Vertical focus and capability Business organization Organizational change practice Business alignment Management credentials Employee background MARKET PRESENCE Number of consultants
50% 5% 10%
4.70 3.65 4.85 2.15 3.80 3.28 3.30 4.20 3.20 4.15 5.00 3.00 5.00 4.00 4.00 5.00 5.00 5.00 2.00 3.00 5.00 4.00 5.00 2.00 4.00 4.00 5.00 5.00 5.00 4.00
10%
5.00 3.00 5.00 2.00 3.00 3.00 4.00 5.00 2.00 4.00
5% 5% 5% 15%
5.00 3.00 5.00 3.00 3.00 4.00 5.00 4.00 3.00 3.00 5.00 3.00 5.00 2.00 5.00 3.00 4.00 5.00 4.00 4.00 5.00 2.00 5.00 2.00 5.00 2.00 4.00 5.00 2.00 3.00 5.00 3.00 4.00 1.00 3.00 3.00 2.00 4.00 2.00 3.00
30% 15% 50% 20% 10% 15% 15% 10% 10% 10% 10% 0% 100%
4.00 4.00 5.00 2.00 4.00 3.00 3.00 4.00 3.00 5.00 5.00 5.00 5.00 3.00 4.00 3.50 2.00 3.00 5.00 5.00 4.90 5.00 5.00 5.00 5.00 5.00 5.00 5.00 4.00 3.90 5.00 3.00 3.00 5.00 3.00 3.00 5.00 3.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 2.60 2.00 2.00 3.00 3.00 2.00 3.00 3.00 3.00 4.10 5.00 3.00 5.00 3.00 5.00 4.00 4.00 3.00 4.10 5.00 3.00 3.00 5.00 5.00 3.00 5.00 3.00 3.85 4.00 5.00 5.00 2.00 3.00 5.00 3.00 4.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 3.70 3.00 3.00 3.00 5.00 5.00 3.00 4.00 4.00 4.50 5.00 5.00 3.00 5.00 4.00 5.00 5.00 4.00
5.00 3.00 5.00 2.00 3.00 2.00 2.00 4.00 2.00 2.00 5.00 3.00 5.00 2.00 3.00 2.00 2.00 4.00 2.00 2.00
Source: Forrester Research, Inc.
Deloitte. Deloitte clearly understands the intersection of technology and business. Its client
references were among the best we received, with one project incorporating current and future business needs, future flexible architectures, and implementing state-of-the-art technology. The
Wipro
PwC
IBM
TCS
HP
depth of its capabilities surprised even Forrester, since Deloittes brand is so much more clearly identified with its advisory services. Clearly the importance of the business decision-maker and stakeholder in business transformation projects gives the more historically business-focused consulting firms a leg up. Deloittes approach to this practice area highlights its exemplary understanding of Fortune 500 business and technology needs.
Accenture. Accentures breadth and depth of offerings and its technology and business process
expertise placed it firmly in the Leader category. In addition, Accenture believes that business transformation is the goal of the entire organization, not just a discrete group within Accenture. Thus, its consultants are able to deal with both the technology and business stakeholders. Accenture has outstanding knowledge management capability, and Accenture consultants view the reusable methods and IP and processes as the critical success factor in their everyday activities. Its ability to leverage institutional assets and knowledge allows Accenture more time and flexibility to innovate on behalf of its clients.
PwC. PwC, since the end of its non-compete with IBM, has worked hard to develop, both
organically and inorganically (via acquisitions of Diamond Consulting, BearingPoints North American entity, and PRTM), its technological capabilities to be on par with its excellent business consulting capabilities. PwC realizes that deep technology expertise is absolutely required for business transformation. In addition, its knowledge capture and management capabilities and its change management approach are outstanding.
Wipro. Wipro Consulting Services (WCS) uses its design with a purpose approach to
provide clients with an integrated team incorporating customer insight, a target operating model, process design, business case, and a detailed implementation road map that it can either implement on its own and/or with partners. While WCS is currently relatively small in comparison with the rest of Wipro, it does report directly to Wipros CEO, indicating the seriousness with which Wipro is approaching the consulting services market.1 From the perspective of the pure-play Indian vendors, Wipro is the most advanced in terms of its approach and its vision for transformational consulting.
IBM. IBMs Strategy & Transformation practice,which has doubled in size in the past
two years,works across IBMs Global Business Services organization tointegrate business consulting capabilities.Clearly, IBM has an excellent vision for technology-enabled business transformation; however, it is more focused on the technology transformation aspects of engagements as opposed to the business process consulting aspects.Given the depth and breadth of IBMs technology capability, it is not surprising that technology and technology service consulting overshadow its business consulting expertise, though IBM points to its Business Analytics Optimization and Smarter Commerce services as evidence of its increasing business focus.IBMs client partner leaders arereally the key to its success with its large-scale clients. Reference feedback and consulting examples all underscored the importance of the client partners input and influence on making projects successful.
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Cognizant. Cognizant Business Consulting has grown rapidly in recent years. But perhaps
because of its very fast growth rate, it did not have quite the same level of depth and maturity with regard to its tools and methodologies as some of its competitors. Nonetheless, it has a very strong vision; its client references were superb both on the business and technology side and it is clear that it deeply understands technology-enabled business transformation. Cognizant is the company to watch in this space in 2012 and 2013.
Infosys. Coming from a strong technology heritage, Infosys has worked hard to shift its
focus to look more extensively at business consulting. It has made significant investments in tools and engagement aids that can now match those of longer-established consulting firms such as Deloitte or Accenture. Although Infosys has integrated its former Infosys Consulting team with the larger enterprise applications consulting practice, there are still challenges in the collaboration between the two groups, and this issue is exacerbated by the fact that not all practitioners use a common knowledge management tool set. In addition, while Infosys has the business process consulting heavyweights within its ranks, the focus of its consulting projects is much more technology-centric relative to the other players. For example, while all three of Infosys references were delighted with Infosys capability, two of the projects reviewed were more technology-centric than business-consulting-centric and were described as such by the delighted reference customers who were technology or technology-product executives as opposed to business executives.
and this is reflected by its greater strength in business consulting than in technology. It utilizes its proprietary Value Delivery Framework (VDF) when delivering transformation services, ensuring consistency and integration across engagements. It supports its knowledge management capabilities with 50 full-time professionals responsible for the upkeep and utilization of its knowledge management repository. KPMGs strong suit is definitely the strategy and business consulting required at the beginning of a technology-enabled business transformation engagement. Its technical capability from a size and variety standpoint is small. However, KPMG has outstanding program management capabilities that allow it to work effectively with technology providers that implement the strategy KPMG consultants develop.
TCS. TCS clearly has significant strengths and is doing state-of-the-art consulting work, such
as its groundbreaking transformational consulting work with the Ministry of Corporate Affairs (MCA21) in India. In pockets, given the lack of integrated consulting strategy in North America, TCS has some strong reference examples. Clearly, TCS has some work to do with regard to formulating a North American consulting strategy so that success is not dependent on individual client partners or relationships. TCS consulting partners in North America are top-notch, and some of the bleeding-edge tools that TCS has developed to support consulting engagements will set up the consulting group for success as it matures.
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HP. HP knew that it might struggle to compete with some of the consulting stalwarts
participating in this Forrester Wave given its deep focus on technology, but with its new focus on improving its business consulting capability, HP views this as an opportunity. And what we found is that HP has a strong technology transformation vision and would be a prime vendor of choice for clients looking for technology rationalization and implementation. However, it still has a way to go in terms of growing its business consulting capability and integrating that capability into the larger HP enterprise services group. It has a strong set of tools for technology analysis, and its quality management and ITSM tools will help optimize IT. Its focus is definitely on modernization and optimization of technology assets as a means to improve ITs efficiency and effectiveness. From a business innovation or business transformation standpoint, HP will need to make some inorganic investments to compete.
SUPPlEmENtAl MATERIAL Online Resource The online version of Figure 2 is an Excel-based vendor comparison tool that provides detailed product evaluations and customizable rankings. Data Sources Used In This Forrester Wave Forrester used a combination of two data sources to assess the strengths and weaknesses of each solution:
Vendor surveys. Forrester surveyed vendors on their capabilities as they relate to the evaluation
criteria. Once we analyzed the completed vendor surveys, we conducted vendor calls where necessary to gather details of vendor qualifications.
Customer reference calls. To validate product and vendor qualifications, Forrester also
conducted reference calls with three of each vendors current customers.
The Forrester Wave Methodology We conduct primary research to develop a list of vendors that meet our criteria to be evaluated in this market. From that initial pool of vendors, we then narrow our final list. We choose these vendors based on: 1) product fit; 2) customer success; and 3) Forrester client demand. We eliminate vendors that have limited customer references and products that dont fit the scope of our evaluation. After examining past research, user need assessments, and vendor and expert interviews, we develop the initial evaluation criteria. To evaluate the vendors and their products against our set of criteria,
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we gather details of product qualifications through a combination of lab evaluations, questionnaires, demos, and/or discussions with client references. We send evaluations to the vendors for their review, and we adjust the evaluations to provide the most accurate view of vendor offerings and strategies. We set default weightings to reflect our analysis of the needs of large user companies and/or other scenarios as outlined in the Forrester Wave document and then score the vendors based on a clearly defined scale. These default weightings are intended only as a starting point, and we encourage readers to adapt the weightings to fit their individual needs through the Excel-based tool. The final scores generate the graphical depiction of the market based on current offering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product capabilities and vendor strategies evolve.
ENDNOtES
1
Forrester analyzed the newly revamped WCS in August 2011 and the investments it was making in order to differentiate itself both from its traditional Indian pure-play competition and the classic management consulting firms. See the August 30, 2011, Wipro Consulting Services: Can Wipro Finally Crack The Code? report.
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Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 19 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 28 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com. 61086