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 e n d o r A n a l y s i s

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1 Global Headquarters: 5 Speen Street Framingham, MA USA P F E X C E R P T 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 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 2011 Vendor Analysis by Cushing Anderson (Doc # ). 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 is Figure 1. I D C O P I N I O N This 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 the short 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: Worldwide, firms are generally very capable at providing technical and functional insights two areas that consulting buyers rate as very important to both success of a project and selection criteria. Not surprisingly, meeting project timelines was globally considered the most important characteristic for both selecting a firm and a project's success. Enterprises were somewhat disappointed with their consulting firm's ability to stick to project schedules and meet previously agreed milestones. While nearly all firms state a focus on maximizing the value of their projects, buyers believe this area is one of the weakest performance areas for consultants overall. Filing Information: March 2011, IDC #226443e : Excerpt

2 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 the short 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. In addition to a short overview of the business consulting market, the full study is composed of two key sections. The first is a definition or description of what characteristics IDC analysts believe make a successful strategy for a 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 displays the observed and quantified scores of the consulting providers. This section contains a profile of each reviewed firm and a short description of its strengths and areas for improvement. This shorter excerpt contains an overview of the consulting market and the IDC Marketscape methodology, the visual aggregation of the capabilities and strategies of each of the firms evaluated, and an excerpt of the profile, strengths and opportunities for PwC based on IDC's assessment, 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 wellresearched IDC judgment about the market and specific firms. IDC analysts tailor the range of standard characteristics by which firms in an industry 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 on detailed 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. 2 #226443e 2011 IDC

3 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 involves 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 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 either 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 strategic consulting specialists that offer primarily strategy consulting and business intelligence models to specific sectors or industries including government fit into this category of firms. 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 included firms. 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. 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 F o r e c a s t IDC believes that at a global level, the current economic crisis has not had a damaging impact on this industry and will not for the forecast period. On the contrary, positive factors such as globalization, fast emergence of developing economies, and growing concerns around risk, security, and compliance will positively impact the business consulting market. This is a confirmation of the trends we have already underlined in previous documents, including: Economic recovery. The economic slowdown and slow recovery for many companies will have mixed impact on business consulting spending. Some firms 2011 IDC #226443e 3

4 will seek to control costs, others will reorganize to position for the future, and still others will attempt to gain competitive advantage during the downturn. Issues such as operational improvement, organizational realignment, cost reduction, growing revenue, and managing risk are project drivers and represent near-term motivators for initiating projects, with operational excellence and revenue growth increasing motivation for projects over the forecast period. Skills demand. Globalization is accelerating global sourcing and acquisitions. Some client issues notably managing talent and change and sustainability will be consistent drivers of projects and will require additional development of talent from both consulting providers and their clients. Global regulations. As countries align their business practices to meet global standards and regulations, several segments of business consulting will be positively impacted by global regulations, including finance and accounting, supply chain, and operations consulting. This impact will be felt mostly in the United States, where IFRS will supplant GAAP. There is a positive global outlook with accelerated demand from emerging economies, such as Brazil, Russia, India, and China (BRIC), which will create numerous new opportunities for firms as well. 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 M a r k e t A s s e s s m e n t The IDC vendor assessment for the worldwide business consulting services market represents IDC's opinion on which providers are well positioned today through current capabilities and which 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 discussion, 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 product today, here and now. Under this category, IDC will look 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 supplier's strategies in various areas are aligned with customer requirements (and spending) over a defined future time period. 4 #226443e 2011 IDC

5 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. 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 M a r k e t V e n d o r A s s e s s m e n t Source: IDC, 2011 P r o v i d e r P r o f i l e s PricewaterhouseCoopers According to IDC analysis and buyer perception, PwC is an IDC MarketScape leader worldwide. PwC is a Big Four global consultancy, established as a global network of 2011 IDC #226443e 5

6 member firms with 163,000 employees globally in 757 offices across 151 countries. PwC serves client organizations across all sectors and functional areas. The firm provides services around five key areas Audit and Assurance, Consulting, Deals, Human Resources, and Tax. Consulting services covered within the scope of this IDC research include: Strategy Finance Technology Governance, risk, and compliance Operations People and Change Revenue growth Shared services and outsourcing Sustainability Delivering deal value Investigations PwC organizes its solutions into 21 distinct industry sectors. The firm also focuses on certain cross-competency services including Capital Projects and Infrastructure, Deals, and Human Resources. As of September 2010, PricewaterhouseCoopers announced a new brand positioning and officially became known as PwC. The firm's shorter name and new logo are part of a program to strengthen and modernize how it represents its worldwide network to its clients, its people, and the communities in which it operates. The brand message will focus on the added value that the firm offers clients, emphasizing the trust and individual relationship it builds with each client. In recent years, PwC has made significant moves to expand its IT capabilities to facilitate larger transformation projects. PwC is in a position to actively compete for a broader range of services by combining its deep industry and business knowledge with growing technology skills. It has made significant progress as a "full-service consulting firm," pulling resources and expertise from across all parts of the firm. The firm states that it believes both point consulting and strategy execution capabilities are critical to its consulting business, but of equal importance is its ability to dovetail transformational consulting into its wider Advisory business to deliver greater value to clients. PwC continues to invest in its Strategy, Operations, and People and Change assets, as exemplified by the November 2010 acquisition of Diamond Consulting in the 6 #226443e 2011 IDC

7 United States and the United Kingdom. This strategy, operations, and technology firm brings added industry-specific experience and analytical domain experience that can be leveraged broadly through the firm. Its relationships in financial services, healthcare, and telecom will help expand PwC's market opportunities in these sectors. Diamond's expertise in strategy, particularly in customer relationship management and analytics, will add strength to PwC's execution-oriented strategy capability. PwC's market approach is industry focused. The firm has implemented a project model that facilitates the use of a crossline of service teams of consultants to meet changing needs. For example, the firm leverages resources in its Financial Services and Public Sector practices to provide a depth of expertise and deeper value to clients in resolving issues that have become ever more convergent during the economic crisis. Recent investments in India indicate that PwC expects to grow in this region. In November 2010, PwC announced its plans to expand operations in India with a $100 million investment and by doubling its head count from 6,000 to 12,000 over the next three years. In response to its involvement in the Satyam accounting scandal, the firm has made a number of operational and leadership changes in PwC India. The company has invested in further training, shoring up its ability to internally develop skills in response to the local skill shortage in some professional areas. The upcoming deadline for IFRS conversion in India is poised to be a significant opportunity for PwC. The firm states it is aggressively preparing for the April 1, 2011, conversion date in India. Overall, PwC is investing in comprehensive employee training, while its Advisory teams are engaged in helping clients understand and adopt the broad-reaching reporting and business management changes that IFRS requires. In 2010, approximately 20% of PwC's revenue globally came from emerging economies. PwC sees high growth particularly in China, Russia, India, the Middle East, and Brazil. PwC has significant consulting capabilities across Asia/Pacific. Since 2007, PwC has been aggressively expanding its consulting business. It has strengthened its consulting skills in a range of areas such as technology and transformation and in strategy, operations, and sustainability. This has been achieved through a combination of organic and inorganic investment. It has completed a number of strategically noteworthy acquisitions including the 2009 acquisition of significant portions of BearingPoint's U.S. Commercial and Financial Services units along with BearingPoint's global delivery centers in Bangalore, India, and Shanghai, China, and BearingPoint's Japan operations. Worldwide Overall, PwC is seen as the most capable of all firms across several characteristics that include leveraging local resources, applying proven methodologies and tools, and helping enterprises comply with new or existing regulations. PwC is seen overall as among the most capable of its peers at integrating its project team with the client's IDC #226443e 7

8 Worldwide, PwC is seen as much better than its peers at helping clients identify and implement options for growth. To enhance its leadership position on the MarketScape overall, PwC must significantly improve client perception across several key characteristics that include its ability to provide a full spectrum of business consulting services, its ability to provide industry insights, and its ability to provide technical insights. Also, to extend its leadership position on the MarketScape, PwC should improve client perception of its ability to both help clients improve operational efficiency and manage risk. 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 be 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 next project. 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' marketplace, the ability to evolve their offerings based on unique experience, and the ability to deploy a multidisciplinary team to support highly specialized client 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. A d v i c e f o r G l o b a l C o n s u l t i n g F i r m s Exploit technical and functional insights to attract customers. Identify opportunities to consistently deliver on client expectations, especially timely delivery of services. 8 #226443e 2011 IDC

9 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. Entering 2011, firms that can best address the regionally specific shifts in client requirements will be best positioned to gain share. C o p y r i g h t N o t i c e This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit Please contact the IDC Hotline at , ext (or ) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2011 IDC. Reproduction is forbidden unless authorized. All rights reserved IDC #226443e 9