June 22, 2009 | Updated: July 16, 2009

SWOT: The Evolution Of IT Service Providers To Business Technology Competitors
by Chris Andrews for Vendor Strategy Professionals

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2009 “The Three Archetypes Of Service Providers” September 5. All other trademarks are the property of their respective companies. TechRadar. For additional information. 2008 © 2009.For Vendor Strategy Professionals June 22. Inc. H2 2008” march 17. Capgemini. expanding the definition and limits of the technology marketplace. Forrester Wave. Related Research Documents “market momentum: Tech-Enabled Business Services market Activity. and Edward radcliffe SWOT: The Evolution Of IT Service Providers To Business Technology Competitors ExECUT I V E S U m mA ry The market for traditional IT services will change dramatically over the next five years as more vendors realize the benefits of aligning their technology solutions with the needs of business customers. To purchase reprints of this document. 2009 The Business Technology Offerings Of Accenture. products. Unauthorized reproduction is strictly prohibited. Unlike other technology trends that come and go. Forrester Research. RoleView. the emergence of a differentiated business technology (BT) marketplace will be characterized by evolution — involving powerful longtermtechnology trends and near-term technology disruptions. by Chris Andrews with Jonathan Penn. 2009 | Updated: July 16.com. and IBm. Our study of four leading IT services firms that have adopted a business focus in their strategies. Technographics®. TABl E O F CO n TE nTS 2 The Evolution Of IT Services To Business Services Continues The Companies At A Glance Broader market Trends 5 Accenture Creates Business Value Through A Consulting-Driven Approach 8 Capgemini Focuses On The “Collaborative Business Experience” 9 Cognizant Is Moving Up In The Market Through A Vertical Market Focus 11 IBM Brings Scale And A Full Set Of Capabilities To The Business Customer 14 Supplemental Material n OT E S & rE S O U rCE S Forrester interviewed and collected information from the four vendors presented in this document: Accenture. and Total Economic Impact are trademarks of Forrester Research. Inc.com. the market for such services will become increasingly competitive as more IT vendors seek to push themselves deeper into the core processes of their customers by aligning with business needs. Information is based on best available resources. . All rights reserved. Cognizant. Capgemini. Forrester®. go to www.forrester. and go-to-market approaches reveals that companies are finding new ways to create alignment with business customers— and in the process. please email clientsupport@forrester. 2009 “market Overview: The Tech-Enabled Business Services market Opportunity” January 22. Opinions reflect judgment at the time and are subject to change. Pascal matzke. And IBm This is the first document in the “Evolution Of IT Services” series. Cognizant Technology Solutions. In the next five years.

business process management. We explore factors related to each company’s strategy. To explore how these four companies are pursuing a strategy based on alignment with business needs. and IBM have based their value propositions on the ability to provide comprehensive technology solutions. leading companies in the IT services marketplace like Accenture. competitive dynamics. these companies are facing new competition from much smaller IT companies like Cognizant that recognize that perhaps the best opportunity to create differentiation and value amid a new wave of global competition is through increased business alignment. Capgemini.2 For years. weaknesses. rather than a directly comparative determination of which vendor is best — and differs significantly from other Forrester methodologies like the Forrester Wave™ in this regard. Inc. 2009 | Updated: July 16. This analysis is intended to be a qualitative review of general capabilities and differentiation in the IT services marketplace.2 SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals THE EVOLUTION OF IT SERVICES TO BUSINESS SERVICES CONTINUES Forrester sees an important trend in the evolution of the technology market: IT service providers are increasingly concentrating on providing business-focused solutions to their customers.3 It places focus on each vendor’s unique characteristics.1 While IT departments still play the primary role in the purchase of technology. June 22. several vendors have developed offerings around the fact that line-of-business input is what drives many purchasing decisions and technology is most effective when it enables business results. In the future. transformation services. solutions. these three firms distinguish themselves through their “end-to-end” technology services and their proactive business-focused marketing approach. opportunities. and business process outsourcing (BPO) — and in the process are making technology more strategic for businesses (see Figure 1). and go-to-market approach. we expect these traditional IT services players to compete more aggressively with more traditional business service companies like Deloitte. While many IT service providers offer complete technology services. which we hope will lead to a more informed understanding of how leading vendors are expanding the market for their technology services. At the same time. Forrester research. We also review how each company is reacting to key market trends. These companies are engaging more frequently in business services — including process consulting. and customer perception. reproduction Prohibited . 2009 © 2009. system integration. and threats (SWOT). Forrester has prepared an overview of each company’s strengths.

2008. · IBM leverages its scale and global capabilities to provide global end-to-end business solutions for its clients. Each company engages business customers with an approach that is rooted in its history and culture. Forrester research. Inc. 2009 | Updated: July 16. The Companies At A Glance A snapshot view of the marketplace highlights the distinctions among the leading market players (see Figure 2).SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals 3 Figure 1 The Business Services landscap Operational process consulting Business services Security services IT services Business process Business process design and management transformation services Enterprise architecture design Systems integration Standard and transformation services services BPO Apps Apps Apps development integration management IT strategy Apps testing services Apps hosting consulting Architect and develop Implement and integrate Consult and plan Run and manage Source: September 5. enabling it to gain the confidence · Cognizant’s clear focus on vertical market expertise is helping it drive deeper into business processes in an attempt to move up the value chain. Inc. © 2009. and trust of European business professionals while expanding its Rightshore value proposition. reproduction Prohibited June 22. “The Three Archetypes Of Service Providers” Forrester report 47073 Source: Forrester Research. which contributes to strengths in strategic transformational projects. For example: · Accenture has deep consulting expertise. 2009 Risk management and compliance services . · Capgemini has strong relationships in the European market.

Weakness It has a comparatively heavy reliance on consulting. They are adjusting to the rapidly changing technology market by exploring how and why these new technology trends matter to business clients — and how they can help their clients with strategy and integration. IBM continues to leverage its global strength and endto-end capabilities to maintain its strong brand and maintain the customer experience. Threat Premium o ering may not resonate with midmarket customers.4 SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals Figure 2 Overview SWOT Analysis Strength Accenture It has consulting-driven expertise. Forrester research. As part of its “Collaborative Experience” strategy. 2009 | Updated: July 16. It is not known for its ability to take on bite-sized service project capabilities. Accenture uses its “High Performance IT” research to identify and share how leading companies (identified as “high performers”) adjust to technology change. have hurt the global brand. Each of the companies realizes that trends related to service-oriented architecture (SOA). and cloud computing create threats and opportunities regarding their traditional business models. June 22. In particular. Opportunity Brand value. Struggles in mid2000s. Inc. Capgemini’s TechnoVision 2012 product helps clients align the needs of business customers with emerging technologies. Partner-driven market approach facilitates relationships with C-level decisionmakers. particularly on strategic projects. It is a small player in a market marked by large. and stability will resonate with customers in weak economic conditions. particularly in North America. all four vendors are: · Adapting their offerings to new technology trends. globally integrated competition and a new wave of low-cost competitors. It has clear opportunity to move up the value chain into business services with a unique value proposition. creating opportunity for midtier of service providers. Broader Market Trends The analysis of these companies highlights a few key similarities. It is building global alignment with business based on big-picture technology themes. Process-driven culture means less agility and more barriers to innovation in a rapidly changing tech market. reproduction Prohibited . 47073 Source: Forrester Research. Scale and breadth of o erings presents challenges: Global integration will be a never-ending process. reputation for business performance. It has weaker global brand recognition than US-based competitors. it’s aggressively partnering with cloud computing leaders to adapt to new IT ecosystems. Inc. 2009 © 2009. Capgemini Strong presence in European marketplace enables expansion of the Rightshore model. The focus on reliability and cost may not matter as much as soft skills (like exibility and creativity) to a business audience. IBM Global Depth of capabilities Business and o erings is Services immense. virtualization. Cognizant It heavily focuses on key vertical markets and strong client relationships and has reputation for reliability and low cost. For example.

IBM’s “Smarter Planet” campaign links to its new Business Analytics and Optimization service line and helps the company identify opportunities for its Intelligent Transportation System. and productivity.7%. technology. They recognize that as technology becomes ubiquitous. For example. The company enhanced its strategy consulting capabilities with the acquisition of the George Group in 2007. Accenture had revenues of $23. 2009 . and foster continuity across verticals. The company was formed when the consulting arm of Andersen Worldwide broke from its parent company.3 billion in 2008 and profit margins of 6.4 Capgemini is meanwhile driving its smart metering services in the utilities market as well as solutions related to e-Borders as part of its government practice. it can help clients address social challenges related to border security. Inc. Following this break. The market leaders are committed to bringing their technology solutions in line with long-term big-picture technology trends. share best practices.5 ACCENTURE CREATES BUSINESS VALUE THROUGH A CONSULTING-DRIVEN AppROACH Accenture (NYSE: ACN) is a publicly traded company focused on consulting. a company that provides operational and process consulting. 2009 | Updated: July 16. · Expanding the boundaries of business technology. reproduction Prohibited June 22. Forrester research. All of the companies reviewed align their strategies by vertical markets in their go-to-market approaches.6 © 2009. most of the leading companies have at least some horizontal capabilities to generate ideas. climate change. Despite this focus. which in turn helps cities lower traffic congestion and carbon-dioxide emissions. the company went public in 2001. and outsourcing solutions (see Figure 3). For example. Cognizant believes its vertical market approach is a key differentiator in its ability to drive deeper into business process.SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals 5 · Focusing on vertical market alignment. and IBM creates thought leadership on 11 key verticals.

SaaS. Source: Forrester Research. reproduction Prohibited . and geographic diversity of the larger IBM and its consulting expertise sets it apart Global Business Services. end-to-end approach may result in less exibility with smaller customers and fewer bite-sized projects. Client perception Accenture’s strong brand and reputation and adoption for stability and thought leadership should serve it well in the weak economic environment. 2009 © 2009. It has a coherent strategy from strong thought leadership to consulting and delivery. Competitive position The company holds a leadership position. It will always compete against the scale particularly in the North American market. Inc. The company has strong marketing programs aimed at business customers. The company grew strongly in 2008 despite the economic crisis. Delivery and The company’s consulting base drives execution strategy strengths in its overall design and implementation strategy. 2009 | Updated: July 16. The company’s approach favors large transformational projects. Solution alignment The business is structured around ve vertically focused operating groups (comprising 17 industry groups). from smaller competitors. June 22. Sales and go-to. Threat Market dynamics The company continues to leverage its high-performance research to identify new opportunities in hot tech markets like SOA. Forrester research. Horizontal platforms in management consulting and system integration feed innovation capabilities. 47073 The current cost-cutting environment does not lend itself to the company known for its premium services and pricing. Sustainability and The company has a long history of viability focusing on the intersection of technology and business. Market attribute Opportunity The heavy partner-driven approach to sales does not scale easily to the midmarket. Inc. Corporate/portfolio It is known for its consulting-driven strategy approach and end-to-end service delivery capabilities.6 SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals Figure 3 SWOT Analysis: Accenture Company attribute Strength Weakness Integrated. and cloud computing.History as a consulting organization has market strategy led to one of its key strengths: a partnerdriven approach to sales that ensures the development of business relationships. Its “High Performance Business” focus brings a data-driven approach to identifying and implementing best practices.

Preliminary feedback from services vendors and clients indicates that many companies have reacted to this recession. · May face challenges in this economic climate. reducing strategy consulting work. But we’ll have to watch for 2009 operating results to see how Accenture weathers the current economic storm. and outsourcing services. Accenture conveys its belief that its individual technology expertise matters less than the business value it provides. technology. and outsourcing) as a way to leverage its horizontal expertise.SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals 7 An analysis of Accenture’s focus and capabilities shows that the company: · Uses its consulting expertise to drive system integration opportunities. to date. · Has not lost sight of horizontal market opportunity. Accenture has invested heavily in its “High Performance Business” strategy. Although Accenture approaches the market with a vertical focus consisting of five operating groups and 17 industries. · Views technology benefits as inseparable from business results. 2009 . it still places emphasis on the value of its horizontal capabilities. The “High Performance” strategy builds a powerful knowledge repository for Accenture to leverage: It can complement its technology expertise with quantitative data and use key findings in its go-to-market approach. Furthermore. and putting large transformational projects on hold. it leverages expertise from its Technology Labs to integrate new technologies into vertical markets. which allows it to drive a cohesive theme through its consulting. This focus is most likely a result of the company’s history in consulting and its partner-driven approach to sales and marketing. Forrester research. In virtually all of its marketing and messaging. drive innovation. the findings of which help establish its thought leadership and inform its services. These market changes could affect Accenture more than other companies — since the company is less known for its ability to handle “bite-sized” projects. and 2008 was a strong year for the company. The strategy relies on global surveys and research that identify the best practices of high-performance companies across industries. and share best practices across verticals. The company uses its growth platforms (management consulting. Some of these challenges could be mitigated by the fact that customers will revert to a strong brand like Accenture’s in these market conditions. This approach will serve it well as the landscape evolves — its partner-level relationships create powerful barriers to entry that IT companies will find difficult to replicate. © 2009. reproduction Prohibited June 22. by cutting discretionary spending. and its marketing materials. This message is consistent in its public filings. 2009 | Updated: July 16. its product offerings. system integration. Inc.

2009 © 2009. the ability to outsource IT operations. e-Borders. Its country-broads in key countries favor cross-service line work. Competitive position It is strongly positioned in the European marketplace. business intelligence and data management.5% (see Figure 4). and virtual mobility telecom are examples of new capabilities. Smart metering. RAIN. Inc. North American competitors. Its Rightshore model proposition is focused on cost reduction. marketing. opportunities. Figure 4 SWOT Analysis: Capgemini Company attribute Strength Weakness The company’s strategy is not highly di erentiated from its larger. Capgemini will have to make the transition from traditional system integration focus to a balance of vertical and horizontal capabilities and business process standards.7 billion in 2008 and an operating margin of 8. and wireless/mobility. Forrester research. Inc. and TechnoVision. Clear links between thought leadership. 47073 Source: Forrester Research. The company’s history goes back to the 1960s and 1970s when the software company Sogeti acquired the European IT services company CAP. Market attribute Opportunity Threat Market dynamics It is pursuing partnerships to ful ll a cloud value proposition. the company has undergone several structural and branding changes. Since then. June 22. Corporate/portfolio It maintains a strong position in business strategy process and consulting expertise. business process modeling and management. strategy.It relies on dedicated business consulting market strategy relationships to reach business customers. The company places less emphasis on vertical-market business knowledge than other vendors. Sustainability and Strong relationships in the European Recent history includes some nancial viability marketplace provide barriers to entry and stumbles in the US market. the company’s recent turnaround based on its Rightshore model has largely been viewed as a success. Delivery and It leverages repeatable frameworks aimed execution strategy at bringing value to business customers such as ASE. including the acquisition of Ernst & Young’s consulting division in 2000. and business value. and sales approach are less clear. The company had revenues of €8. in partnership with leading market players. While the company’s North American operations suffered in the early 2000s. 2009 | Updated: July 16. It does not have the global brand recognition that other tier-one competitors have.8 SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals CApGEMINI FOCUSES ON THE “COLLABORATIVE BUSINESS EXpERIENCE” Capgemini is primarily known for its expertise in serving the European market. Sales and go-to. Client perception It believes hot areas exist in user and adoption experience. with European outsourcing remaining strong. Solution alignment It focuses on transformation of business operations. It has done well with its “Collaborative Experience” messaging — an appropriate topic for bridging IT and business needs. reproduction Prohibited .

reproduction Prohibited June 22. · Has a go-to-market approach focused on connecting IT to business.7 Going forward. Approximately 79% of Capgemini’s revenues are from Europe — a fact that can be viewed as a positive and a negative. 2009 . In the early 2000s. Capgemini relies on a set of proven methodologies and products designed to align the business needs of its clients with technology solutions. Forrester research. Cognizant reported $2. Capgemini announced a partnership with Amazon. the majority of the company’s development centers and employees are in India. In particular. The company’s marketing campaign focused on the “Collaborative Business Experience” highlights its efforts to bridge the IT/business technology (BT) gap and its goal to develop stronger partnerships in the new IT ecosystem. While Cognizant has its headquarters in New Jersey. the current recession highlights some of the challenges companies can face without geographic diversification.com to run applications in remote data services. highlighting its commitment to partnerships as a way to succeed in the new IT ecosystem defined largely by cloud computing. Capgemini’s strategy is focused on providing a wider set of solutions to business managers — pushing the company’s front-office value. Capgemini underwent a strategy transformation based on its Rightshore global delivery model that has helped the company emerge from some struggles to become a leading contender in global IT services.9 · Is heavily reliant on the European marketplace. Furthermore. with operating margins of approximately 18% for the past three years (see Figure 5). and its business technology frameworks. the company’s TechnoVision 2012 product helps clients map new technologies and innovations (like software-as-a-service [SaaS] and mashups) to business drivers. © 2009. The company was founded as the IT development and maintenance arm of Dun & Bradstreet in 1994 and was spun off as an independent company shortly thereafter. consulting.SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals 9 An analysis of Capgemini’s focus and capabilities shows that the company: · Is enhancing its Rightshore strategy with more business consulting. Capgemini’s presence in Asia — a fastergrowing market than the West where competitors have greater share — is limited.11 COGNIzANT IS MOVING Up IN THE MARkET THROUGH A VERTICAL MARkET FOCUS Cognizant Technology Solutions (NASDAQ: CTSH) is a publicly traded provider of IT. 2009 | Updated: July 16.8 In November 2008.8 billion in annual revenues in 2008. its business process expertise. the company is focusing its efforts on increasing the relationship between its global capabilities. and business process outsourcing.10 While Capgemini’s strong presence and relationships in this market will help it sustain growth in a market that has been slow to embrace offshore work. A key goal of the product is to shed light on which technology trends will be most relevant and strategic to industry-specific business operations — and help drive Capgemini’s role in implementation. · Continues to create unique business technology methodologies. Inc.

June 22. Inc.10 SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals Figure 5 SWOT Analysis: Cognizant Company attribute Strength Weakness Corporate/portfolio It is moving deeper into vertical markets in Company’s overall culture. 2009 © 2009. there is still a large perception gap to overcome before the company is viewed as a value-add strategic partner for business customers. but it must di erentiate. designed to develop stronger relationships with clients. Client perception Reputation for reliability. Source: Forrester Research. 47073 Heavy focus on vertical market solutions has the potential to limit cross-vertical expertise and may make it di cult for some verticals to grow/expand. It has high levels of client satisfaction. reproduction Prohibited . Market attribute Opportunity Market dynamics Cognizant has a clear opportunity to move up the value chain into business services with a unique value proposition versus Western market leaders. Forrester research. Threat It is a much smaller player in a market of large companies. acquisitions to ll vertical service gaps. business customers and is using not business customers. is immense. with strong growth from nancial services. and value strategy order to provide higher levels of service to propositions are mostly in the realm of IT. Comparatively.It is building on its value proposition of market strategy process-expertise reliability and low cost in key verticals. healthcare. Sustainability and Business consulting revenue is growing viability strongly. The market focus is clear and consistent. and retail manufacturing. and service will resonate with business customers. Competitive position Share of business services market to be gained by India-centric players. focus. Selling new value-added business services in a recession (when cost is key) will be di cult. Thought leadership for business customers is limited. which are replicating the Indian low-cost value proposition. Delivery and Two-in-a-Box model leverages the global execution strategy delivery model (on-site and o shore). like Cognizant. with positive results from preliminary business focus. 2009 | Updated: July 16. Sales and go-to. process and adoption expertise. Cognizant’s process expertise may not matter as much as soft skills (like exibility and creativity) to a business audience. Inc. Solution alignment Vertical market approach is consistent and straightforward.

like its recent retail-focused acquisition of Canada-based Active Intelligence. reliability. Its history of serving vertical markets will help it here: The company has focused on a core set of vertical markets (financial services. healthcare. even though it created a heavier personnel cost structure for Cognizant. Perhaps the best option for service providers like Cognizant is not to try to replicate the value proposition of the largest tier-one market players and instead build unique services based on strengths in process and reputation for reliability and value. 2009 . and process expertise may not resonate with business customers seeking creative solutions from thought partners. it expects business consulting to grow as a percentage of overall revenue. reliability. · Still faces challenges related to culture and perception. Although IBM’s roots in services go back to the 1980s. For example. Now. The company’s Two-in-a-Box methodology of putting two managers on each project — one at the client site and one with the delivery capabilities — helped its clients mitigate the operational risks associated with global sourcing strategies.12 · Wants to bring more value to the offshoring model. and outsourcing to organizations worldwide. manufacturing/logistics. 2009 | Updated: July 16. IBM BRINGS SCALE AND A FULL SET OF CApABILITIES TO THE BUSINESS CUSTOMER IBM Global Services provides business consulting. reproduction Prohibited June 22. and value. application services. Cognizant believes that the cost savings its clients have recognized from offshoring create the foundation for long-term strategic relationships. the company is using the relationships developed in this program to make its offerings deeper and more strategic to the business. While Cognizant has traditionally been focused on serving the needs of IT professionals. Inc. and its expertise in these markets will help it expand its value-added services. Perhaps the biggest barriers to the growth of Cognizant’s business solutions may be related to its own culture and client perception: A value proposition based on low cost. Forrester research. If Cognizant can do this. The company plans to continue to build its vertical market expertise through select acquisitions. and retail) for years. a culture based on process controls and heavy management oversight may be difficult to transform into a value-added partner. · Has an opportunity to differentiate based on its process focus.SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals 11 An analysis of Cognizant’s focus and capabilities shows that the company: · Is heavily focused on its vertical market strategy. the company is currently focused on building new capabilities in post-merger integration and long-term sourcing strategy. while distinguishing itself from its much larger North American competitors. they grew substantially when former chief executive officer (CEO) Louis Gerstner focused the company’s turnaround strategy on its ability to provide business clients with comprehensive system integration © 2009. Furthermore. it can pull away from other IT service providers.

So far. June 22. the largest players will face their own agility challenges. Corporate/portfolio Known for its global scale and strong strategy execution capabilities. 47073 Scale and breadth of o erings presents challenges: Vast amount of integration has to take place to bring together IBM’s research. Source: Forrester Research. on the viability value of technology-related business services. Market dynamics Tackling a range of emerging technology opportunities like cloud and SOA. Market attribute Opportunity Threat As business demands for new technology solutions accelerate. to identity the clear market approach and focus. Focus is on deepening customer relationships and continued global integration. Figure 6 SWOT Analysis: IBm Global Business Services Company attribute Strength Weakness End-to-end focus may be less attractive to companies looking for very speci c solutions or smaller-sized engagements. This may re ect a lack of exibility. and bringing agility to global businesses. 2009 | Updated: July 16. Sustainability and It based its turnaround. intelligence. Despite its vast improvements. it has a broad portfolio of solutions comprising end-to-end capabilities. and value proposition on a global scale. 2009 © 2009.13 Gerstner’s successor. bolstered the company’s services capabilities in 2002 with the acquisition of PricewaterhouseCoopers consultancy business for $3. it is also focused on big-picture issues related to topics like sustainability. the culture is very process-driven. Client perception “Nobody gets red for hiring IBM” is the and adoption common phrase that is more relevant than ever in this economy. Solution alignment The company builds business expertise through thought leadership (four Global C-Suite Studies) and guides on the new paradigm of business and IT. in part. Client satisfaction is high. Sam Palmisano. IBM has done a nice job of building innovation based on tech market changes. Competitive position It can be competitive with virtually every service provider but distinguishes itself in its broad capabilities and reach. services. Delivery and It brings together its “Smarter Planet” execution strategy themes and component business models to deliver value to business customers. Messages can be diluted among multiple audiences. reproduction Prohibited .5 billion (see Figure 6).12 SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals and professional services. New metrics focus on key agility indicators (in addition to KPI's) will be intriguing to business customers. messaging. and Sam Palmisano has continued the evolution of the successful strategy. Sales and go-to. It has speci c marketing programs for 17 industries.It has strong mindshare with both business A layered matrix of organization and marketing strategies can make it di cult market strategy and IT buyers and fosters a relationshipdriven approach with the C-Suite. Inc. Inc. Forrester research.

functional roles. It uses its component business models to help clients align their business needs with IT systems by connecting their business architecture. Inc. IBM’s business solutions offerings highlight how the company’s value proposition flows from thought leadership to its consulting frameworks and performance metrics. and its breadth of capabilities is immense. and IT implementation capabilities. IBM clearly has an opportunity to continue to lead as the global business operations of clients expand. IBM uses key agility indicators (KAIs) as well as key performance indicators (KPIs) to measure the business value that its technology solutions can achieve. and market themes. · Continued global integration remains an opportunity. while ensuring that these competencies are in close geographic proximity to demand. Forrester research.SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals 13 An analysis of IBM’s focus and capabilities shows that: · The company has a clear focus on delivering integrated business value. The company continues to invest in its global delivery model. titles. global capabilities. The complexity can be viewed as either a positive — its breadth of expertise being impressive — or a barrier to a streamlined go-to-market strategy. 2009 | Updated: July 16. It has adopted a competency-based approach for provisioning services. More than its smaller competitors. Unlike some of its competition. IBM recently strengthened its business capabilities with the announcement of its Business Analytics and Optimization service line — a practice designed to help business executives leverage data and analytics to make more informed business decisions. Finally. The announcement fits well with the company’s brand image. like enterprise resource planning (ERP) or industry skills. and “Smarter Planet” marketing campaign. particularly for the company’s marketing organization. For example. solutions. © 2009. The company uses its “Smarter Planet” theme and its C-Suite studies to provide the market with thought leadership and give focus to its vertical market services offerings. process models. reproduction Prohibited June 22. getting a clear understanding of IBM’s capabilities and focus can be a difficult endeavor — the organization is simply very large. The announcement shows that the company is committed to the alignment between technology and business strategy and its staying consistent in its market approach. This will remain a challenge. IBM has to strive to keep its global services flexible and agile in a rapidly changing competitive marketplace. 2009 . · The company is showing clear commitment to its BT capabilities. · The company’s go-to-market approach may be overly complex. managing its global capabilities with its strong process expertise. the company segments its markets by vertical.

uk. In November 2008. weaknesses. The market will be partially defined by its offerings — technology solutions that pull together the best of business strategy. with a payback in four years. 2009 | Updated: July 16. Source: Capgemini (http://www. and in most cases. The Forrester Wave™ is a detailed analysis of vendors’ products and services based on transparent.uk. “George Group helps companies with complexity reduction. Capgemini partnered with Raytheon to provide e-border security for the UK. See the November 21. a 15% reduction in carbon dioxide.” Capgemini press release. only a small subset of the responses has been represented here. fully accessible criteria. November 14. which it claims has resulted in a 25% reduction in traffic. According to Accenture. process innovation. “Market Overview: The Tech-Enabled Business Services Market Opportunity” report.” Source: Accenture (http://www. information has been modified to suit an abbreviated format along with additions from Forrester. This market — which Forrester calls the business services market — is supported by powerful market trends that will dramatically increase the pace of technology-enabled innovation. opportunities. and growth through innovation. Each vendor had the opportunity to provide Forrester with information and discuss the results with Forrester analysts before publication. Forrester research.com/).capgemini.capgemini.14 SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals SUppLEMENTAL MATERIAL Methodology Forrester invited the companies in this SWOT analysis to participate in the research by answering a set of 21 questions related to their company’s strengths. strategic cost reduction. However. 2 3 4 5 6 7 8 June 22. The transformation of IT to BT is one of three megatrends that we think will shape the technology marketplace over the next few years. “Capgemini’s ‘Rightshore’ Transformation” report.georgegroup.com/news/pr/ pr1585/). Source: (http://www.com/news/capgemini_in_the_news/capgeminiand-amazon-bond-in-the-cloud/). Source: “Trusted Borders signs contract with UK Home Office for e-Borders contract — Capgemini to provide business architecture for the project. reproduction Prohibited . and $120 million per year in revenue. lean manufacturing and operations. Inc. Capgemini announced a partnership with Amazon to run applications in remote data services. 2006. IT integration. 2009 © 2009. and delivery. 2008. 2007 (http://www. See the April 28. IBM created an Intelligent Transportation System for the City of Stockholm. The final analysis of these companies is the work of Forrester.com/ wave). See the January 22. “The Hour Of The Vendor Strategist: Three Mega Business Trends Will Reshape The Tech Sector” report. Capgemini’s Rightshore model helped it make the transformation to a global services company.forrester. ENDNOTES 1 As technology becomes embedded in lines of business and business increasingly relies on technology. Please refer to Forrester’s description of the Wave™. a new market opportunity is emerging for IT service providers. and threats. 2009.

2009 | Updated: July 16. and support services around the Oracle Retail Merchandising and Optimization suite. Source: “Annual Report 2007. he took a big bet that: “Over the next decade. See the January 2. integrated technology into the process of an enterprise. Active Intelligence is focused on providing consulting. Inc.com/ shownews/Cognizant_acquires_Canada_based_Active_Intelligence-nid-52392. “Global IT Market Outlook: 2009” report. 2002. so this is based on 2007 numbers. reproduction Prohibited June 22. Gerstner notes that under his direction.capgemini.SWOT: The Evolution Of IT Service Providers To Business Technology Competitors For Vendor Strategy Professionals 15 9 Forrester defined the importance of partnerships in the new IT ecosystem.” Source: Louis Gerstner.” Capgemini (http://www. 2009. 2008 annual revenues had not been released at the time of this publication. more important. “The Emerging IT Ecosystem” report. Source: SiliconIndia (http://www. 2007. implementation.com/m/en/doc/2007_ reference_document_-_annual_financial_report. customers would increasingly value companies that could provide complete solutions — solutions that integrated technology from various suppliers and.html). Jr.pdf). The Asia-Pacific region as a whole is only projected to grow in line with the North American marketplace. Who Says Elephants Can’t Dance? Collins. See the January 12.. 10 12 13 13 © 2009. Forrester research. 2009 . but pockets of opportunity — in countries like China — could be strong in coming years.siliconindia.

MA 02139 USA Tel: +1 617. consumer insight. Inc.making leaders Successful Every Day Headquarters Forrester Research.5730. marketing. For information on hard-copy or electronic reprints. visit www.7378. +1 617.com Nasdaq symbol: FORR www.367.6000 Fax: +1 617.com Research and Sales Offices Australia Brazil Canada Denmark France Germany Hong Kong India For a complete list of worldwide locations. Forrester works with professionals in 19 key roles at major companies providing proprietary research.com. For more information.613.613. and technology industry leaders successful every day.613. events. Forrester has been making IT.forrester. visit www. 47073 . please contact Client Support at +1 866. (Nasdaq: FORR) is an independent research company that provides pragmatic and forwardthinking advice to global leaders in business and technology.forrester.forrester. We offer quantity discounts and special pricing for academic and nonprofit institutions. 400 Technology Square Cambridge. or clientsupport@forrester. Israel Japan Korea The Netherlands Switzerland United Kingdom United States Forrester Research.com/about. and peer-to-peer executive programs. For more than 25 years.com.5000 Email: forrester@forrester. Inc. consulting.

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