PDF CRM Consulting Services - IBM

12 May 2003 Professional Services Strategies

METAspectrum 21.1 Michael Doane

Performance

CRM Consulting Services

METAspectrumSM Evaluation

100

LEADER

80

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60

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EEDDS

40

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CHALLENGER

20

FOLLOWER

0

0

20

40

60

Presence

12 May 2003

80

100

META Group is a trademark, and METAspectrum is a service mark, of META Group, Inc. Copyright ? 2003 META Group, Inc. All rights reserved.

Overview

Market Definition The customer relationship management (CRM) consulting services market comprises both commercial businesses and nonprofit organizations seeking to improve client or constituent relations (loyalty/retention) and/or gain new clients or constituents. CRM services usually include strategy formulation, software selection, software implementation, business process improvement, team/end-user training, and deployment. Increasingly, CRM services are combined with enterprise resource planning (ERP) and supply chain management (SCM) services where operational CRM overlaps with these domains.

Market Forecast A major market shift occurred from mid-2001 to late 2002, wherein fewer clients invested in enterprisewide CRM endeavors. Instead, they proceeded with smaller, shorter, and more tactical projects, chaining these projects across time -- echoing the consulting industry message that CRM is a journey, not a project. Market studies indicate that clients have a low level of confidence with regard to CRM service providers, based largely on early CRM stumbles usually associated with enterprisewide projects. Nearly all the firms covered in this METAspectrum have refined their message and methods to leverage field experience and directly address client concerns. We expect more success in CRM projects through 2004 and a parallel maturation of clients' understanding of CRM. Thus, clients that deferred CRM evolution in 2001 and 2002 will be more inclined to move ahead, resulting in CRM services growth of 10%-12% in 2003 and 20% in 2004. In the near term, it is up to CRM consulting firms to capture and demonstrate business value through CRM -- not only for the duration of their engagements, but also over time.

Key Findings All service providers included in this study have refined their CRM messages from an enterprisewide scale to a more tactical, value-based approach, taking into consideration individual clients' maturity levels, short-term needs, and long-term visions. As the CRM consulting services firms mature, the greatest challenge they face is client immaturity, which leads to a higher relative importance of presence criteria (versus performance) as clients seek "known quality." The CRM service providers have evolved beyond the notion that CRM excellence can be achieved through software implementation and have focused on value creation through CRM that speaks to client needs and leads to more tactical CRM endeavors.

Results show several firms closely clustered, since each has made strides in some areas while lagging in others; therefore, strengths are often canceled out by weaknesses. Although Accenture, Deloitte Consulting, and IBM Business Consulting Services are fairly even overall (and almost identical in terms of performance scores), IBM BCS has a slight edge over Accenture in presence, which in turn enjoys somewhat greater presence than Deloitte Consulting. It is important to note, however, that even firms that are in close proximity in the METAspectrum graphic demonstrate varying strengths and weaknesses, most notably within the industry focus and business drivers criteria areas.

Criteria weightings used in this study were derived from a survey of 903 client respondents and refined by META Group. Overall, clients are demanding that vision/strategy and business drivers make up half of the presence weighting, while services and execution account for nearly half of the performance weighting (our evaluation reflects this).

Leaders CRM leadership requires an ability to move beyond value measurement and into long-term value capture for clients, while still adhering to time and cost limitations. CRM leaders can identify, define, and articulate tactical CRM strategies that lead to measurable value over time (not limited to their engagements). Deloitte Consulting, Accenture, and IBM BCS combine deep industry focus with sound methodologies and value capture to arrive at CRM success. We expect all these firms to advance along the leadership path as their refined methods and focus play out further in the market and they achieve more visible success. BearingPoint's strengths include its enterprise value creation abilities, gain-sharing focus, and positive field experiences, but the firm needs to address its messaging and continue its evolution around value creation.

Challengers Cap Gemini Ernst & Young (CGE&Y) has recently revamped its CRM vision and delivery to meet the more tactical needs of clients. CGE&Y displays a strong accent on value capture that must become more market proven. All challengers are strong at software implementation and are gaining in organizational viewpoint. Inforte has a focus on the CRM/supply chain relationship, Extraprise has immense skills at value measurement, and Headstrong (like these other two) has strong CRM core skills. However, these latter three firms all lack size (geographic reach, point reach) and a full service spectrum. EDS shows great strength in leveraging existing clients toward CRM service extensions, but needs both growth and maturity in its vision/strategy, integration services, and value capture.

208 Harbor Drive ? Stamford, CT 06912-0061 ? (203) 973-6700 ? Fax (203) 359-8066 ?

Copyright ? 2003 META Group, Inc. All rights reserved.

METAspectrum 21.1 CRM Consulting Services

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Overview

Bottom Line Clients that have deferred CRM projects due to a lack of confidence in CRM consulting firms can exploit the rising maturity of CRM consulting. Best-in-class IT organizations understand that CRM excellence is not predicated on software implementations alone. Strategy, integration, deployment, and value measurement are key issues, and our research indicates that clients can have greater success when they tap outside consulting services for these areas.

Business Impact: In all business application markets, a first phase of vendor/project maturity is software-based and a second one is business-based. The CRM services market is now in a second phase, in which value capture

and operational economies are at the heart of enlightened CRM endeavors.

208 Harbor Drive ? Stamford, CT 06912-0061 ? (203) 973-6700 ? Fax (203) 359-8066 ?

Copyright ? 2003 META Group, Inc. All rights reserved.

METAspectrum 21.1 CRM Consulting Services

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CRM Consulting Services Presence Evaluation

Our market presence evaluation includes a review of each vendor's product and service attributes -- representing vendors' ability to deliver value to customers. The following eight criteria areas provide a summary of our presence analysis. For complete details on how vendors fared with each criterion in our evaluation, visit .

Vision/Strategy IBM BCS Accenture Deloitte EDS CGE&Y BearingPoint Inforte Extraprise Headstrong

Good/Very Good Good/Very Good Good/Very Good

Good Good Fair/Good Fair/Good Fair Fair

Channels/Partners IBM BCS Accenture Deloitte BearingPoint CGE&Y Extraprise Inforte EDS Headstrong

Good/Very Good Good Good Good Good Good

Fair/Good Fair/Good

Fair

What We Evaluated Message/Positioning -- External, visible communication to the market about vision, views, expectations, priorities, and value of CRM and its position in the IT ecosystem. Customer Life-Cycle Management -- Demonstrated, tangible ability to explain and execute CRM plans that define technical and/or solution direction, emphasis, and development that best meet customer requirements. Innovation and Articulation -- Perceived and actual position within the market as a CRM trendsetter, definer of direction, and catalyst of market direction and change.

Analyst Commentary A firm's ability to grasp the CRM customer life cycle, combined with innovation and vision (and the ability to articulate it), is highly valued by clients. Indeed, companies often are confused about the value of CRM and the cost of obtaining it, and have difficulty linking CRM efforts to the rest of their IT and business processes. High marks for innovation and articulation were awarded to IBM BCS and Deloitte Consulting, while EDS, Accenture, IBM BCS, and CGE&Y excel in customer life-cycle management.

What We Evaluated Applications, Technology, and Staff Alliances -- Active and complementary relationships with third-party vendors, consultants, systems integrators, and channel partners. Training and Shared Knowledge -- Articulated partner evaluation criteria, training/retraining programs, and certification enforcement. Quality Assessment Methods -- Defined methods to ensure the quality, consistency, and value delivered by individual partners.

Analyst Commentary Because most CRM endeavors require application and technology partners, we examined the breadth and depth of those partnerships as well as the underlying shared knowledge and quality assessment methods. Accenture and IBM BCS had the strongest array and deployment of such partners, and there were few significant distinctions among the firms covered in the other areas.

208 Harbor Drive ? Stamford, CT 06912-0061 ? (203) 973-6700 ? Fax (203) 359-8066 ?

Copyright ? 2003 META Group, Inc. All rights reserved.

METAspectrum 21.1 CRM Consulting Services

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CRM Consulting Services Presence Evaluation

Awareness/Reputation Deloitte BearingPoint IBM BCS Accenture Inforte CGE&Y Extraprise Headstrong EDS

Good/Very Good Good Good Good

Fair/Good Fair/Good Fair/Good Fair/Good

Fair

Geographic Coverage Accenture IBM BCS Deloitte CGE&Y BearingPoint EDS Extraprise Headstrong Inforte

Very Good/Excellent Very Good

Good/Very Good Good Good Good

Fair/Good Fair

Poor/Fair

What We Evaluated Mind Share -- Publicity, sales, marketing, service, and development activities that build positive perception in the market and extend visibility above and beyond the organization's size and/or share. Both overall and CRMspecific mind share are considered. Reputation -- The measured achievement of visibility as demonstrated by direct and indirect activities, including publications, press engagement/coverage, and analyst/key influencer visibility (CRM only). Customer Perception -- Measured, relative awareness on the part of existing and potential customers about capabilities, offerings, vision, and focus.

Analyst Commentary In this criteria area, we assessed mind share (thought leadership, brand awareness), reputation, and customer perception. For the first subcriterion, the three second-tier firms (Extraprise, Inforte, and Headstrong) understandably did not keep pace, but they held their own in the other two. Customer perception (gleaned from direct feedback to META Group) varied for Accenture from exceptional to fair and was strongest for BearingPoint and Deloitte Consulting, for which clients provided more consistently positive feedback. CRM mind share for EDS is somewhat stifled by its overall branding, which leads clients to associate it with myriad other services. Our research has revealed that peer references are increasingly important to prospects, and we expect reputation to increase in importance during 2003/04.

What We Evaluated Point Reach -- Extension of viable fulfillment reach, availability, and delivery via directly controlled entities or partnerships. Global/International Fulfillment -- Number of regional and geographically dispersed resources to support clients.

Analyst Commentary All but the second-tier firms show strength in geographic coverage, though all three (Headstrong, Extraprise, and Inforte) have adequate point reach in North America. We define point reach as the ability to deploy consultants across a geography with agility and without excessive travel costs. Global fulfillment combines geographic presence and support. IBM BCS and Accenture are the clear leaders in geographic coverage, with Deloitte Consulting on the next shelf. BearingPoint will join these three once its new organization (Europe, Asia Pacific, and Latin America) matures, while CGE&Y is projecting consulting force growth that, if realized, would advance its position.

208 Harbor Drive ? Stamford, CT 06912-0061 ? (203) 973-6700 ? Fax (203) 359-8066 ?

Copyright ? 2003 META Group, Inc. All rights reserved.

METAspectrum 21.1 CRM Consulting Services

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