Market Leaders: Consultancies

The Market

Busy. That’s the first word Jim Dickie, managing partner of CSO Insights, uses to describe consultancies today. After a recession-related dip in growth, consulting firms are now gaining momentum due to a newfound awareness among potential clients that cutting services does not breed success. “Pent-up demand is now turning into active projects,” Dickie says, “and those firms are looking for help.” With big-bang deployments now a thing of the past, consultancies can no longer rely on coding and implementation expertise alone. Going forward, analysts cite software-as-a-service agility, event-driven pricing, and knowledge of social CRM as differentiators in this space. Increasing investment in services doesn’t equate to an easy sell for consultancies, however, which will continue to be competitive. Paul Greenberg, president of The 56 Group (and this year’s Hall of Fame inductee; see page 25), says that companies looking to hire will now “look twice instead of once.” 

The Leaders

Once the perennial winner here, Accenture has been edged out by Deloitte in each of the past three years. In 2010, the two consulting giants were neck-and-neck once again, with Accenture just barely missing out on reclaiming the crown. The company continues to extend its massive reach, however, as exemplified by the recent partnership with business intelligence leader SAS Institute and the purchase of CadenceQuest, a provider of retail customer data and analytics. While analysts praise Accenture for its exceptional breadth of capabilities, the firm continues to struggle with customer satisfaction. Leslie Ament, research director and managing partner at Hypatia Research, says that the firm can commit a cardinal sin: “CRM consultants tend to learn on the client’s dime.”

Capgemini, a familiar face on our leaderboard, thrived in 2010, announcing a 3.3 percent increase in its consultancy services in the first quarter. Ray Wang, partner with Altimeter Group, says, “Capgemini is…not trying to be the biggest body shop, but the smartest advisor.” The French consultancy expanded its repertoire last year through a widespread investment in business information management, nearly doubling the number of its consultants in that space. Yet Capgemini, one analyst says, may be doomed to remain always a bridesmaid, never a bride. This analyst adds that, to reach the top spot, Capgemini needs better brand clarity to combat a “perception that [its] brand is all over the place,” a view clearly detrimental in attracting new clients. 

One of the highest-revenue-grossing arms of one of the world’s most powerful technology companies, IBM Global Business Services (GBS) is a force to be reckoned with. Analysts praise GBS for its vast resources, industry expertise, and rich service portfolio, and credit its forward-thinking, software-supported focus on social networking for helping the firm stay relevant. “They understand the social world very well,” Greenberg says. “The Lotus division has really risen to the forefront as far as technology goes.” Yet GBS’s technological know-how is not always a plus, Ament notes. “IBM generates most of its CRM revenues from implementation of packaged software solutions,” she says, “rather than from depth of customer management consulting expertise.” 

Infosys makes its official leaderboard debut this year. Named our One to Watch in 2007, this Asian provider of offshore services broadened its North American footprint to become a stakeholder formidable enough to earn a spot as a Challenger in Gartner’s 2009 Magic Quadrant for CRM Service Providers. (The research firm praised Infosys for “one of the highest percentages in on-time, on-budget project delivery” and “above-average client satisfaction scores.”) The provider’s international presence won points from analysts, while Wang lauded in particular the firm’s “broad range of services that are well organized in industry offerings.”

The Winner

Deloitte sits atop the leaderboard for the third year in a row—but only by the slimmest of margins. The New York–based firm benefited from its 2009 purchase of BearingPoint’s North American Public Services practice after BearingPoint—itself a 2007 leader in this category—filed for bankruptcy. Deloitte’s crisp CRM capabilities garnered the firm a 4.5 rating for ability to execute—the highest in the category by half a point. One analyst says Deloitte is a shortlist fixture because “customers assume they can solve almost any problem.” Ament agrees: “Clients consistently praise Deloitte…for depth of expertise, comprehensive offerings, and value of services delivered. In addition, its consultants are recognized as dedicated, collaborative, and easy to work with.”  

One to Watch

Innoveer has been in the customer management consulting space for over a decade—and was named a One to Watch in 2008—but this provider is currently gaining mindshare due to recent expansion. A focus on CRM and a holistic approach to implementation helped the consultancy win high praise for ability to execute. “Innoveer built its reputation in CRM for high-tech and healthcare,” Altimeter’s Wang says. “It’s [now] moving beyond those verticals and brings a strong reference base of global customers.” With growing toeholds in the sectors of banking and consumer goods and well-developed vendor partnerships, Innoveer will only intensify its pressure on the leaderboard in 2011. 

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