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7/30/2019 IDC IBM Consulting Quadrant
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Filing Information: March 2012, IDC #233426, Volume: 1
Business Consulting Services: Competitive Analysis
C O M P E T I T I V E A N A L Y S I S
I D C M a r k e t S c a p e : W o r l d w i d e B u s i n e s s C o n s u l t i n gS e r v i c e s 2 0 1 2 V e n d o r A n a l y s i s
Cushing Anderson
I N T H I S E X C E R P T
The content for this excerpt was taken directly from the IDC MarketScape: Worldwide
Business Consulting Services 2012 Vendor Analysis by Cushing Anderson (Doc #
233425). All or parts of the following sections are included in this excerpt: IDC
Opinion, In This Study, Situation Overview, Future Outlook, Essential Guidance, and
Synopsis. Also included are Tables 1 & 2, and Figure 1.
I D C O P I N I O NThis IDC study represents the vendor assessment model called IDC MarketScape.
This research is a quantitative and qualitative assessment of the characteristics that
explain a vendor's success in the marketplace and help anticipate its ascendancy.
This study assesses the capability and business strategy of many of the leading
business consulting firms. This evaluation is based on a comprehensive framework
and set of parameters expected to be most conducive to success in providing
business consulting services during both the short term and the long term. A
significant and unique component of this evaluation is the inclusion of the perception
of business consulting buyers of both the key characteristics and the capabilities of
these consulting providers. As one would expect of market leaders, overall, these
firms performed very well on this assessment. Key findings include:
Surprisingly, this evaluation discovered that generally buyers are disappointed
with the consulting provider's ability to deliver ROI for the project and maximize
the project's value. While all vendors state a focus on maximizing the value of
their projects, buyers believe this area is one of the weakest performance areas
for consultants overall.
Even though most firms describe themselves as capable of global delivery, an
important factor for their clients is the ability to leverage local staff and resources
on appropriate projects. Clearly, this reflects both a cost focus and a desire for
local awareness. In both cases, consulting providers must improve their ability to
exploit their local talent.
Firms are generally quite good at demonstrating their ability to apply proven
methodologies/tools and to provide a full spectrum of business consulting
services; however, neither of these capabilities resonates particularly highly
when enterprises consider selecting a firm for a particular project.
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I N T H I S S T U D Y
This IDC study uses the vendor assessment model called IDC MarketScape. This
research is a quantitative and qualitative assessment of the characteristics that
explain a firm's success in the marketplace and help anticipate its ascendancy.
This study assesses the capability and business strategy of many of the leading
business consulting firms. This evaluation is based on a comprehensive framework
and set of parameters expected to be most conducive to success in providing
business consulting services during both the short term and the long term. A
significant and unique component of this evaluation is the inclusion of the perception
of business consulting buyers of both the key characteristics and the capabilities of
these consulting providers. As one would expect of market leaders, overall, these
firms performed very well on this assessment.
This study is composed of two key sections. The first part is a definition or description
of the characteristics that IDC analysts believe make a successful business
consulting firm. These characteristics are based on buyer and vendor surveys and
key analysts' observations of industry best practices.
The second part is a visual aggregation of multiple firms into a single bubble-chart
format. This display concisely exhibits the observed and quantified scores of the
consulting providers.
The document concludes with IDC's essential guidance to support continued growth
and improvement of these firms' offerings.
M e t h o d o l o g y
IDC MarketScape criteria selection, weightings, and vendor scores represent well-
researched IDC judgment about the market and specific firms. IDC analysts tailor the
range of standard characteristics by which firms are measured through structured
discussions, surveys, and interviews with market leaders, participants, and end
buyers. Market weightings are based on user interviews, buyer surveys, and the input
of a review board of IDC experts in each market. IDC analysts base individual firm
scores and, ultimately, firm positions on the IDC MarketScape, surveys and
interviews with the firms, publicly available information, and buyer experiences in an
effort to provide an accurate and consistent assessment of each firm's characteristics,
behavior, and capability.
S I T U A T I O N O V E R V I E W
I n t r o d u c t i o n
Business consulting involves advisory and implementation services related to
management issues. It often includes defining an organization's strategy and goals
and designing and implementing the structures and processes that help the
organization reach its goals. Business consulting includes three main areas: strategy
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consulting, operational improvement consulting, and change and organization
consulting. The market is primarily served by four firm types:
"Big Four": IDC recognizes the well-known Big Four firms as the four largest
international accountancy and professional services firms Deloitte, Ernst &
Young (E&Y), KPMG, and PricewaterhouseCoopers (PwC).
Multidisciplinary: IDC describes multidisciplinary firms as large, diversified
consulting organizations that offer a range of business consulting services to
clients across a myriad of sectors. To distinguish these from other specialty firms,
services must address more than two business functional areas, in addition to
providing strategy and operational implementations.
Technology led: These are also large, multifaceted firms and are known for
deep expertise in both technology and business consulting. IDC identifies these
firms as those that expanded from IT-centric business into more broad business
consulting or vice versa.
Specialty: Specialty firms have focused areas of consulting expertise in specific
industries, functional areas, or technologies. Management and strategicconsulting specialists that offer primarily strategy consulting and business
intelligence models to specific sectors or industries including government fit into
this category of firms.
IDC MarketScape Vendor Inclusion Criteria
This research includes analysis of the five largest business consulting firms and firms
with broad portfolios spanning IDC's research coverage and with global scale. This
assessment is designed to evaluate the characteristics of each firm as opposed to
its size or the breadth of its services. It is conceivable, and in fact the case, that
specialty firms can compete with multidisciplinary firms on an equal footing. As such,
this evaluation should not be considered a "final judgment" on the firms to consider
for a particular project. An enterprise's specific objectives and requirements will play a
significant role in determining which firms should be considered as potential
candidates for an engagement.
Weighting Evaluation Criteria
The importance of a firm's characteristics to project success and relevance of the
particular issue combined with IDC's opinion about the impact those elements have
on selection of firms implies a unique weighting of these elements when evaluating a
firm's overall strategy and capability to address market opportunity and realizing
market success (see Tables 1 and 2).
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T A B L E 1
K e y S t r a t e g y M e a s u r e s f o r S u c c e s s : B u s i n e s s C o n s u l t i n g S e r v i c e s
Strategy Criteria Criteria for SuccessSubcriteriaWeighting
Offering strategy Current development of offerings will be relevant and attractive to customers over the next
three to five years.
Functionality or
offering road map
A wide variety of approaches will be employed to ensure increased functional and industry
capability, including strategic hiring and training. To ensure maximum impact,organizations will need to increase their ability to construct teams that leverage those
capabilities and provide precise value to clients.
1
Delivery model Methodologies and tools are increasingly leveraged from a single, universally accessible
source to ensure worldwide consistency. To ensure maximum use and value, tools and
methodologies must be accessible using a single library source.
4
Portfolio strategy Increasingly, relevant offerings must involve the formation of multidisciplinary teams. A
firm's increasing capability to identify potential team members, determine their fit andavailability, and leverage their talents effectively will become an essential characteristic of
successful engagements.
4
Other offering
strategies
Prioritization of new opportunities must consider demand and adjacent capabilities and
involve a tiered (regional) prioritization process.
1
Offering strategytotal
10
Go-to-market
strategy
These strategies maximize the connection between offering and customers, including
choosing to target customer segments that offer the greatest opportunity over the next
three to five years.
Pricing model Firms must focus on the performance of their clients' business, and their pricing modelsmust reflect the value of the services delivered. While contingent fees represent a strong
statement of confidence, most buyers are not fully prepared for the gain sharing (asopposed to risk sharing), making these arrangements viable in only small proportionengagements.
1
Sales/distribution
strategy
Consulting models are becoming more complex. Enterprise buyers need to consume
consultative services in increasingly diverse ways. While still dominant, traditional
engagement models are being supplemented by "microsourcing" of technically complexbut narrow tasks such as analytic processing or ongoing benchmarking, and information
services provided with less intensive "consultation" to support insourced analytical or
benchmark operations.
1
Marketing strategy Growth comes from many types of opportunities and client interactions, including temporalopportunities. Identifying areas of high demand and providing comprehensive and timelysolutions require an integrated firmwide effort but will best serve the client's most
important and immediate needs.
7
Customer servicestrategy
Consistent and innovative service delivery relies on collaborative efforts throughout anorganization. Firms must ensure a strong culture of collaboration, consistent and relevant
training, and executive oversight and support.
1
Go-to-market
strategy total
10
Business strategy Strategies to grow the business are aligned with market trends and future opportunities
over the next three to f ive years.
Growth strategy Firms poised for growth in the near term provide relevant specialized offerings thataddress specific needs, particularly for industries, geographic markets, or the size of the
4
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T A B L E 1
K e y S t r a t e g y M e a s u r e s f o r S u c c e s s : B u s i n e s s C o n s u l t i n g S e r v i c e s
Strategy Criteria Criteria for Success
Subcriteria
Weighting
client. Additionally, a consulting provider's ability to cultivate a wide range of referenceableclients ensures the provider's capabilities will get the widest exposure to opportunities.Growth strategy is measured by both the diversity of the planned dimensions of growth
and the measure of enthusiasm of client recommendation across company size andfunctional areas.
Innovation/R&Dpace and
productivity
Firms must be able to deliver innovation to their clients, in terms of both leveragingexisting experience for the unique benefit of a client and developing a truly unique
approach to solutions. Delivery of innovation is measured by client perception of the
innovation delivered on the project.
4
Employee strategy There is no simple approach to employees firms need to invest in career customization
programs to retain some advanced talent, providing for a diverse range of career tracks.Emerging market expansion requires increased focus on local capabilities and the
capability to deliver services from specialized delivery centers to provide both rewarding
opportunities and high client value. Employee strategy is evaluated by examining thetypes of career/employee management practices in place. Particular weight is given for
career customization/diversity programs that facilitate multiple paths to career success
within the firm.
2
Business strategytotal
10
Source: IDC, 2012
T A B L E 2
K e y C a p a b i l i t y M e a s u r e s f o r S u c c e s s : B u s i n e s s C o n s u l t i n g S e r v i c e s
Capabilities Criteria Criteria for Success
Subcriteria
Weighting
Offering
capabilities
The offering's capabilities align well with current market needs and demands.
Functionality/
offering delivered
Offering capability is a combination of functional (domain) knowledge, industry insights,
and technical capabilities. Higher capability reflects buyer perception of a firm's capability.
4
Delivery model
appropriateness
and execution
The appropriate delivery model must include an appropriate integration with the client
team and meet client-developed project timelines. Higher capability is reflected in higher
buyer perception of a firm's capability in both the "ability to integrate with client team" and
the "ability to meet project timelines."
3
Cost
competitiveness
Cost competitiveness can best be measured by the ability to deliver an appropriate and
sustainable return on investment. Higher capability reflects buyer perception of a firm's
capability.
2
Portfolio benefits
delivered
Evolved consulting firms will necessarily be required to provide a full range of consulting
services combined with an ability to provide specific insights related to industry, technical,
or domain issues. Higher capability reflects buyer perception of a firm's fullness and
1
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T A B L E 2
K e y C a p a b i l i t y M e a s u r e s f o r S u c c e s s : B u s i n e s s C o n s u l t i n g S e r v i c e s
Capabilities Criteria Criteria for Success
Subcriteria
Weighting
appropriateness of services offered.
Offering capabilities
total
10
Go-to-market
capabilities
These capabilities maximize the connection between offerings and customers, such as
delivery, partnerships, pricing, distribution, marketing, sales, and service.
Pricing model
options and
alignment
Contingent fee structures are a useful alternative model to help share risk and
acknowledge joint ownership of results. A moderate level of use of this fee reflects a firm's
trust in its own relevance and commitment to client success.
1
Sales/distribution
structure,
capabilities
Firms must operate by balancing both local and global requirements. Global presence
indicates a firm's ability to respond and be relevant to cross-geographic issues. Higher
capability reflects buyer perception of a firm's capability.
1
Marketing The ability of a firm to connect to its clients' issues is essential to establishing a level of
trust in the firm's ability to solve the problem. Issues are evaluated and weighted based on
regional priorities. Higher capability reflects buyer perception of a firm's capability.
7
Customer service A firm's ability to provide service to a client is contingent on the firm's ability to deploy local
resources where appropriate. Higher capability reflects buyer perception of a firm's
capability.
1
Go-to-market
capabilities total
10
Business
capabilities
Financial, employee, partner, and R&D management, among other capabilities, are in
agreement with current market opportunities.
Growth strategy
execution
Essential to a consulting firm's growth is its ability to develop "referenceable clients."
Clients that strongly believe the firm will represent their best interests are most often
referred. Growth strategy execution is measured by the degree of enthusiasm of industry-
related recommendations by clients.
8
Other business
capabilities
Also essential to a consulting firm's growth is the firm's ability to develop "referenceable
clients." Clients that strongly believe the firm will represent their best interests are most
often referred. Business capabilities are measured by the degree of enthusiasm of
recommendations by clients to enterprises of similar size.
2
Businesscapabilities total
10
Source: IDC, 2012
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F U T U R E O U T L O O K
I D C M a r k e t S c a p e W o r l d w i d e
B u s i n e s s C o n s u l t i n g S e r v i c e s M a r k e t
V e n d o r A s s e s s m e n t
The IDC vendor assessment for the business consulting services market represents
IDC's opinion on which providers are well positioned today through current
capabilities and which providers are best positioned to gain market share over the
next few years. Positioning in the upper right of the grid indicates that providers are
well positioned to gain market share. For the purposes of analysis, IDC divided
potential key strategy measures for success into two primary categories: capabilities
and strategies.
Positioning on the y-axis reflects the provider's current capabilities and menu of
services and how well aligned it is to customer needs. The capabilities category
focuses on the capabilities of the company and services today, here and now. Under
this category, IDC looks at how well a provider is building/delivering capabilities that
enable it to execute its chosen strategy in the market.
Positioning on the x-axis, or strategies axis, indicates how well the provider's future
strategy aligns with what customers will require in three to five years. The strategies
category focuses on high-level strategic decisions and underlying assumptions about
offerings, customer segments, business, and go-to-market plans for the future, in this
case defined as the next three to five years. Under this category, analysts look at
whether or not a provider's strategies in various areas are aligned with customer
requirements (and spending) over a defined future time period.
Figure 1 shows each provider's position in the vendor assessment chart. A provider's
market share is indicated by the size of the bubble, and a (+), (-), or () icon indicates
whether or not the provider is growing faster, slower, or even with overall market
growth.
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F I G U R E 1
I D C M a r k e t S c a p e W o r l d w i d e B u s i n e s s C o n s u l t i n g S e r v i c e s
V en do r A s s e s sm en t
Source: IDC, 2012
P r o v i d e r P r o f i l e s
IBM
According to IDC analysis and buyer perception, IBM is an IDC MarketScape Leader
worldwide. One example of the client feedback we received, from a manufacturing
leader, confirms this: "It is a company that puts all its resources to achieve
objectives."
IBM is one of the largest multidisciplinary consulting firms, with more than 200,000
employees globally in its combined services business, and serves clients in more
than 300 locations across 170 countries. IBM provides consulting services related to
strategy and innovation, operations management, finance, HR, change management,
and business advisory services.
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Additionally, IBM's range of IT consulting services is extremely comprehensive and is
well recognized for its industry-specific IT and business solutions. At the forefront of
IBM's consulting capabilities is its Strategy and Transformation practice. Strategy and
Transformation has five functional areas: business and customer strategy, finance
and risk, operations and supply chain, technology strategy, and organization and
people.
IBM Strategy and Transformation consultants bring IP-based assets and accelerators
to client engagements to deliver tangible benefits; provide an integrated,
collaborative, and systematic approach to accelerate transformations; and deliver
client business transformation consulting services. IBM continues to offer a range of
consulting offerings, including management consulting in GBS and technology
consulting in conjunction with GTS, demonstrating its ability to integrate and
implement IT and business consulting capabilities. Unifying market offerings from
both a technology and a business perspective benefits clients, particularly when
clients are faced with technology-rooted operational changes, such as digital
business transformation and supply chain operations optimization.
IBM has expanded its capabilities in business function and industry-specific analytics,
focusing on business and workforce improvement solutions, among other areas that
align with IBM's five Smarter Planet growth areas. These growth areas are clustered
around core themes of social business, cloud, smarter commerce, smarter cities, and
business analytics optimization and are typically paired with other relevant offerings.
IBM has also made significant investments in collaboration, knowledge management,
and assets by deliberately creating a culture of knowledge sharing and collaboration
that rewards consultants who contribute and reuse knowledge.
In November 2010, IBM launched a new consulting service focused on social
business and its implications to organizations and people strategies. This service is
targeted at helping clients shift toward a more social form of employee collaboration.
The social business consulting services will draw from experts in IBM's Strategy and
Transformation practice and with specific vertical expertise dedicated to workforce
management.
IBM has worked to extend its Smarter Planet messaging into specific industries such
as banking/financial services, food, government, oil, public safety, and healthcare.
IBM is actively marketing its Smarter Planet vision, part of which calls for eco-friendly
operational efficiencies across industries and regions, increasing its focus on
developing environmentally sustainable technologies and services. IBM has coined
the phrase "ecoefficiency" and drives its Green Sigma initiatives throughout its IT and
consulting capabilities. At the same time, IBM's Smarter Cities challenge, announced
in November 2010, is the company's largest philanthropic initiative to date, with a $50
million technology and services grant to create 100 "smarter cities."
IBM GBS is actively engaging senior business leaders through its CEO, CFO, CHRO,
and other studies that were published in 2011. The firm has deepened its executive
strategy insights and focused particularly on the new global complexities following the
economic downturn, creative leadership, and global operations and integration in
recently published reports including the 2011 IBM Global CMO Study Collective
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Intelligence: Capitalizing on the Crowd; its Supply Chain Management report Smarter
Commerce Is Redefining Value Chain Visibility: Connecting the Dots; and Enterprise
Risk Managementthought leadership studies.
IBM's growth continues to come from emerging economies such as India, China,
Latin America, and Africa, among others. IBM continues to invest in additional growth
market regions with new marketing and sales programs across Southeast Asia, Latin
America, Eastern Europe, Africa, and the Middle East. To ensure consistent delivery
to all customers, IBM has created a Strategy Consulting Center of Competence that
deploys deep, proven experts to client projects anywhere in the world. This approach
has been particularly helpful in growth markets where local talent continues to
develop.
Worldwide, IBM is seen as the most capable of all firms at applying proven
methodologies/tools and at delivering innovation in the project. IBM is also seen as
the most capable of all firms at maximizing project value. IBM is also seen as the
most capable of all firms at integrating its project team with the client's and at helping
clients drive innovation.
Additionally, IBM is seen as among the most capable at meeting the project timeline
and at providing a full spectrum of business consulting services. IBM is also seen as
among the most capable at helping clients create a more effective business and
implementing options for growth.
To continue to improve its position on this IDC MarketScape, IBM should improve
client perception of its ability to help enterprises comply with new or existing
regulations.
E S S E N T I A L G U I D A N C E
Most business consulting providers are particularly adaptive to changes in economic
or business conditions: adding or removing staff by geography, industry
specialization, or domain expertise. To remain successful, it will be important to:
Create visible links between project strategy and "business execution."
Integrate multiple disciplines throughout the project to ensure client needs are
most fully satisfied and to ensure deep multidisciplinary relationships and strong
positioning on the nextproject.
Evolve and adapt to prevail through specific periods of change by seeking to
capitalize on "temporal opportunities."
Establish deeper expertise in strategically valuable areas of growth, industries,
and geographies.
Firms that have been successful at adapting to temporal opportunities share some
common characteristics including the willingness to seek out dynamic shifts in their
clients' marketplaces, the ability to evolve their offerings based on unique experience,
and the ability to deploy a multidisciplinary team to support highly specialized client
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requirements. IDC believes these characteristics represent a core set of practices that
will enable firms to adapt quickly and service their clients most effectively.
Overall, it will be important for global, industry, and geographic leaders to create
proactive responses to clients and prospects. Our long-term guidance for providers
contained in previous documents remains consistent: Focus on regional priorities.
Functionally, consulting firms worldwide should focus on improving their ability to
meet client expectations related to the delivery of return on investment for the project.
Even though vendors focus on maximizing the value of their projects, buyers believe
this area is one of the weakest performance areas for consultants worldwide.
Additionally, consulting providers must improve their ability to exploit their local talent
in order to meet the cost and insight requirements of their clients.
Worldwide, strategies and drivers are divided between cost control, realigning, and
transforming operations. Enterprises are seeking to improve operational efficiency
and therefore their business consulting projects reflect that. While cost reduction
remains important regionally, enterprises have refocused globally. Consulting vendors
must:
Exploit technical and functional insights to attract customers.
Identify opportunities to consistently deliver on client expectations, especially
timely delivery of services.
Maximize the business value of projects, reach a common and consistent
understanding with key stakeholders on the success criteria, and publicize
successes.
Develop core messages that highlight how to improve operational efficiency and
reduce costs.
As 2012 continues, firms that can best address the regionally specific shifts in client
requirements will be best positioned to gain share.
S y n o p s i s
This IDC study uses the IDC MarketScape model to provide an assessment of a
number of providers participating in the worldwide business consulting services
market. The IDC MarketScape is an evaluation based on a comprehensive framework
and a set of parameters that assesses providers relative to one another and to those
factors expected to be most conducive to success in a given market during both the
short term and the long term.
"While consulting providers are generally perceived as capable, buyers of consulting
services believe consulting vendors are weakest at ensuring projects meet their
projected return on investment. This vendor analysis shows that some vendors are
better able to produce meaningful results than others." Cushing Anderson,
program vice president, Business Consulting Services research
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C o p y r i g h t N o t i c e
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Copyright 2012 IDC. Reproduction is forbidden unless authorized. All rights reserved.