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Making Leaders Successful Every Day 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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June 22, 2009 | Updated: July 16, 2009

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

Making Leaders Successful Every Day

For Vendor Strategy Professionals

June 22, 2009 | Updated: July 16, 2009

SWOT: The Evolution Of IT Service Providers To Business Technology CompetitorsThe Business Technology Oerings Of Accenture, Capgemini, Cognizant, And IBMThis is the rst document in the Evolution Of IT Services series. by Chris Andrews with Jonathan Penn, Pascal Matzke, and Edward Radclie

EXECUT I V E S U M MA RYThe 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. Unlike other technology trends that come and go, the emergence of a differentiated business technology (BT) marketplace will be characterized by evolution involving powerful longtermtechnology trends and near-term technology disruptions. In the next five years, 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. Our study of four leading IT services firms that have adopted a business focus in their strategies, products, and go-to-market approaches reveals that companies are finding new ways to create alignment with business customers and in the process, expanding the definition and limits of the technology marketplace.

TABL E OF CO NTE NTS2 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 SForrester interviewed and collected information from the four vendors presented in this document: Accenture, Capgemini, Cognizant Technology Solutions, and IBM.

Related Research Documents Market Momentum: Tech-Enabled Business Services Market Activity, H2 2008 March 17, 2009Market Overview: The Tech-Enabled Business Services Market Opportunity January 22, 2009 The Three Archetypes Of Service Providers September 5, 2008

2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email [email protected] For additional information, go to www.forrester.com.

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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.1 While IT departments still play the primary role in the purchase of technology, 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. These companies are engaging more frequently in business services including process consulting, transformation services, system integration, business process management, and business process outsourcing (BPO) and in the process are making technology more strategic for businesses (see Figure 1).2 For years, leading companies in the IT services marketplace like Accenture, Capgemini, and IBM have based their value propositions on the ability to provide comprehensive technology solutions. While many IT service providers offer complete technology services, these three firms distinguish themselves through their end-to-end technology services and their proactive business-focused marketing approach. At the same time, 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. In the future, we expect these traditional IT services players to compete more aggressively with more traditional business service companies like Deloitte. To explore how these four companies are pursuing a strategy based on alignment with business needs, Forrester has prepared an overview of each companys strengths, weaknesses, opportunities, and threats (SWOT). We explore factors related to each companys strategy, solutions, and go-to-market approach. We also review how each company is reacting to key market trends, competitive dynamics, and customer perception. This analysis is intended to be a qualitative review of general capabilities and differentiation in the IT services marketplace, 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.3 It places focus on each vendors unique characteristics, which we hope will lead to a more informed understanding of how leading vendors are expanding the market for their technology services.

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Figure 1 The Business Services LandscapOperational 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, 2008, The Three Archetypes Of Service Providers Forrester report47073 Source: Forrester Research, Inc.

The Companies At A Glance A snapshot view of the marketplace highlights the distinctions among the leading market players (see Figure 2). Each company engages business customers with an approach that is rooted in its history and culture. For example:

Accenture has deep consulting expertise, which contributes to strengths in strategictransformational projects.

Capgemini has strong relationships in the European market, enabling it to gain the confidenceand trust of European business professionals while expanding its Rightshore value proposition.

Cognizants clear focus on vertical market expertise is helping it drive deeper into businessprocesses in an attempt to move up the value chain.

IBM leverages its scale and global capabilities to provide global end-to-end business solutionsfor its clients.

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Risk management and compliance services

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Figure 2 Overview SWOT AnalysisStrength Accenture It has consulting-driven expertise, particularly on strategic projects. Partner-driven market approach facilitates relationships with C-level decisionmakers. Capgemini Strong presence in European marketplace enables expansion of the Rightshore model. Weakness It has a comparatively heavy reliance on consulting. It is not known for its ability to take on bite-sized service project capabilities. Struggles in mid2000s, particularly in North America, have hurt the global brand. Opportunity Brand value, reputation for business performance, and stability will resonate with customers in weak economic conditions. Threat Premium offering may not resonate with midmarket customers, creating opportunity for midtier of service providers.

As part of its Collaborative Experience strategy, its aggressively partnering with cloud computing leaders to adapt to new IT ecosystems. It has clear opportunity to move up the value chain into business services with a unique value proposition.

It has weaker global brand recognition than US-based competitors.

Cognizant It heavily focuses on key vertical markets and strong client relationships and has reputation for reliability and low cost. IBM Global Depth of capabilities Business and offerings is Services immense. It is building global alignment with business based on big-picture technology themes.

The focus on reliability and cost may not matter as much as soft skills (like flexibility and creativity) to a business audience. Scale and breadth of offerings presents challenges: Global integration will be a never-ending process.

It is a small player in a market marked by large, globally integrated competition and a new wave of low-cost competitors. Process-driven culture means less agility and more barriers to innovation in a rapidly changing tech market.

IBM continues to leverage its global strength and endto-end capabilities to maintain its strong brand and maintain the customer experience.

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Broader Market Trends The analysis of these companies highlights a few key similarities. In particular, all four vendors are:

Adapting their offerings to new technology trends. Each of the companies realizes that trendsrelated to service-oriented architecture (SOA), virtualization, and cloud computing create threats and opportunities regarding their traditional business models. 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. For example, Capgeminis TechnoVision 2012 product helps clients align the needs of business customers with emerging technologies. Accenture uses its High Performance IT research to identify and share how leading companies (identified as high performers) adjust to technology change.

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Focusing on vertical market alignment. All of the companies reviewed align their strategies byvertical markets in their go-to-market approaches. For example, Cognizant believes its vertical market approach is a key differentiator in its ability to drive deeper into business process, and IBM creates thought leadership on 11 key verticals. Despite this focus, most of the leading companies have at least some horizontal capabilities to generate ideas, share best practices, and foster continuity across verticals.

Expanding the boundaries of business technology. The market leaders are committed tobringing their technology solutions in line with long-term big-picture technology trends. They recognize that as technology becomes ubiquitous, it can help clients address social challenges related to border security, climate change, and productivity. For example, IBMs Smarter Planet campaign links to its new Business Analytics and Optimization service line and helps the company identify opportunities for its Intelligent Transportation System, which in turn helps cities lower traffic congestion and carbon-dioxide emissions.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.5

ACCENTURE CREATES BUSINESS VALUE THROUGH A CONSULTINGDRIVEN APPROACH Accenture (NYSE: ACN) is a publicly traded company focused on consulting, technology, and outsourcing solutions (see Figure 3). The company was formed when the consulting arm of Andersen Worldwide broke from its parent company. Following this break, the company went public in 2001. Accenture had revenues of $23.3 billion in 2008 and profit margins of 6.7%. The company enhanced its strategy consulting capabilities with the acquisition of the George Group in 2007, a company that provides operational and process consulting.6

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Figure 3 SWOT Analysis: AccentureCompany attribute Strength Weakness Integrated, end-to-end approach may result in less flexibility with smaller customers and fewer bite-sized projects. The companys approach favors large transformational projects.

Corporate/portfolio It is known for its consulting-driven strategy approach and end-to-end service delivery capabilities. It has a coherent strategy from strong thought leadership to consulting and delivery. Solution alignment The business is structured around five vertically focused operating groups (comprising 17 industry groups). Horizontal platforms in management consulting and system integration feed innovation capabilities. Sales and go-to- 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. The company has strong marketing programs aimed at business customers. Delivery and The companys consulting base drives execution strategy strengths in its overall design and implementation strategy. Its High Performance Business focus brings a data-driven approach to identifying and implementing best practices. Sustainability and The company has a long history of viability focusing on the intersection of technology and business. The company grew strongly in 2008 despite the economic crisis. Market attribute Opportunity

The heavy partner-driven approach to sales does not scale easily to the midmarket.

Threat

Market dynamics The company continues to leverage its high-performance research to identify new opportunities in hot tech markets like SOA, SaaS, and cloud computing. Competitive position The company holds a leadership position, It will always compete against the scale particularly in the North American market, and geographic diversity of the larger IBM and its consulting expertise sets it apart Global Business Services. from smaller competitors. Client perception Accentures strong brand and reputation and adoption for stability and thought leadership should serve it well in the weak economic environment.47073

The current cost-cutting environment does not lend itself to the company known for its premium services and pricing.Source: Forrester Research, Inc.

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An analysis of Accentures focus and capabilities shows that the company:

Uses its consulting expertise to drive system integration opportunities. Accenture hasinvested heavily in its High Performance Business strategy, which allows it to drive a cohesive theme through its consulting, technology, and outsourcing services. The strategy relies on global surveys and research that identify the best practices of high-performance companies across industries, the findings of which help establish its thought leadership and inform its services. 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.

Has not lost sight of horizontal market opportunity. Although Accenture approaches themarket with a vertical focus consisting of five operating groups and 17 industries, it still places emphasis on the value of its horizontal capabilities. The company uses its growth platforms (management consulting, system integration, and outsourcing) as a way to leverage its horizontal expertise, drive innovation, and share best practices across verticals. Furthermore, it leverages expertise from its Technology Labs to integrate new technologies into vertical markets.

Views technology benefits as inseparable from business results. In virtually all of itsmarketing and messaging, Accenture conveys its belief that its individual technology expertise matters less than the business value it provides. This message is consistent in its public filings, its product offerings, and its marketing materials. This focus is most likely a result of the companys history in consulting and its partner-driven approach to sales and marketing. 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.

May face challenges in this economic climate. Preliminary feedback from services vendorsand clients indicates that many companies have reacted to this recession, to date, by cutting discretionary spending, reducing strategy consulting work, and putting large transformational projects on hold. These market changes could affect Accenture more than other companies since the company is less known for its ability to handle bite-sized projects. Some of these challenges could be mitigated by the fact that customers will revert to a strong brand like Accentures in these market conditions, and 2008 was a strong year for the company. But well have to watch for 2009 operating results to see how Accenture weathers the current economic storm.

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CAPGEMINI FOCUSES ON THE COLLABORATIVE BUSINESS EXPERIENCE Capgemini is primarily known for its expertise in serving the European market. The companys history goes back to the 1960s and 1970s when the software company Sogeti acquired the European IT services company CAP. Since then, the company has undergone several structural and branding changes, including the acquisition of Ernst & Youngs consulting division in 2000. While the companys North American operations suffered in the early 2000s, the companys recent turnaround based on its Rightshore model has largely been viewed as a success. The company had revenues of 8.7 billion in 2008 and an operating margin of 8.5% (see Figure 4).Figure 4 SWOT Analysis: CapgeminiCompany attribute Strength Weakness The companys strategy is not highly differentiated from its larger, North American competitors.

Corporate/portfolio It maintains a strong position in business strategy process and consulting expertise. Its Rightshore model proposition is focused on cost reduction, the ability to outsource IT operations, and business value. Solution alignment It focuses on transformation of business operations. Its country-broads in key countries favor cross-service line work.

Capgemini will have to make the transition from traditional system integration focus to a balance of vertical and horizontal capabilities and business process standards. The company places less emphasis on vertical-market business knowledge than other vendors. Clear links between thought leadership, strategy, marketing, and sales approach are less clear.

Sales and go-to- It relies on dedicated business consulting market strategy relationships to reach business customers. It has done well with its Collaborative Experience messaging an appropriate topic for bridging IT and business needs. Delivery and It leverages repeatable frameworks aimed execution strategy at bringing value to business customers such as ASE, RAIN, and TechnoVision.

Sustainability and Strong relationships in the European Recent history includes some financial viability marketplace provide barriers to entry and stumbles in the US market. opportunities, with European outsourcing remaining strong. Market attribute Opportunity Threat

Market dynamics It is pursuing partnerships to fulfill a cloud value proposition, in partnership with leading market players. Smart metering, e-Borders, and virtual mobility telecom are examples of new capabilities. Competitive position It is strongly positioned in the European marketplace. It does not have the global brand recognition that other tier-one competitors have.

Client perception It believes hot areas exist in user and adoption experience, business intelligence and data management, business process modeling and management, and wireless/mobility.47073 Source: Forrester Research, Inc.

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An analysis of Capgeminis focus and capabilities shows that the company:

Is enhancing its Rightshore strategy with more business consulting. In the early 2000s,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.7 Going forward, the company is focusing its efforts on increasing the relationship between its global capabilities, its business process expertise, and its business technology frameworks.

Continues to create unique business technology methodologies. Capgemini relies on a setof proven methodologies and products designed to align the business needs of its clients with technology solutions. In particular, the companys TechnoVision 2012 product helps clients map new technologies and innovations (like software-as-a-service [SaaS] and mashups) to business drivers. 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 Capgeminis role in implementation.

Has a go-to-market approach focused on connecting IT to business. Capgeminis strategy isfocused on providing a wider set of solutions to business managers pushing the companys front-office value. The companys 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.8 In November 2008, Capgemini announced a partnership with Amazon.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.9

Is heavily reliant on the European marketplace. Approximately 79% of Capgeminis revenues arefrom Europe a fact that can be viewed as a positive and a negative.10 While Capgeminis strong presence and relationships in this market will help it sustain growth in a market that has been slow to embrace offshore work, the current recession highlights some of the challenges companies can face without geographic diversification. Furthermore, Capgeminis 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, consulting, and business process outsourcing. 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. While Cognizant has its headquarters in New Jersey, the majority of the companys development centers and employees are in India. Cognizant reported $2.8 billion in annual revenues in 2008, with operating margins of approximately 18% for the past three years (see Figure 5).

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Figure 5 SWOT Analysis: CognizantCompany attribute Strength Weakness

Corporate/portfolio It is moving deeper into vertical markets in Companys overall culture, focus, and value strategy order to provide higher levels of service to propositions are mostly in the realm of IT, business customers and is using not business customers. acquisitions to fill vertical service gaps. Solution alignment Vertical market approach is consistent and straightforward, with strong growth from financial services, healthcare, and retail manufacturing. Sales and go-to- It is building on its value proposition of market strategy process-expertise reliability and low cost in key verticals. The market focus is clear and consistent. Delivery and Two-in-a-Box model leverages the global execution strategy delivery model (on-site and offshore), designed to develop stronger relationships with clients. Sustainability and Business consulting revenue is growing viability strongly, with positive results from preliminary business focus. It has high levels of client satisfaction. Market attribute Opportunity Cognizants process expertise may not matter as much as soft skills (like flexibility and creativity) to a business audience. Thought leadership for business customers is limited. Selling new value-added business services in a recession (when cost is key) will be difficult. Threat Heavy focus on vertical market solutions has the potential to limit cross-vertical expertise and may make it difficult for some verticals to grow/expand.

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, but it must differentiate. Competitive position Share of business services market to be gained by India-centric players, like Cognizant, is immense. Client perception Reputation for reliability, process and adoption expertise, and service will resonate with business customers. It is a much smaller player in a market of large companies, which are replicating the Indian low-cost value proposition. Comparatively, there is still a large perception gap to overcome before the company is viewed as a value-add strategic partner for business customers.Source: Forrester Research, Inc.

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An analysis of Cognizants focus and capabilities shows that the company:

Is heavily focused on its vertical market strategy. While Cognizant has traditionally beenfocused on serving the needs of IT professionals, it expects business consulting to grow as a percentage of overall revenue. Its history of serving vertical markets will help it here: The company has focused on a core set of vertical markets (financial services, healthcare, manufacturing/logistics, and retail) for years, and its expertise in these markets will help it expand its value-added services. The company plans to continue to build its vertical market expertise through select acquisitions, like its recent retail-focused acquisition of Canada-based Active Intelligence.12

Wants to bring more value to the offshoring model. Cognizant believes that the cost savingsits clients have recognized from offshoring create the foundation for long-term strategic relationships. The companys 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, even though it created a heavier personnel cost structure for Cognizant. Now, the company is using the relationships developed in this program to make its offerings deeper and more strategic to the business. For example, the company is currently focused on building new capabilities in post-merger integration and long-term sourcing strategy.

Has an opportunity to differentiate based on its process focus, reliability, and value.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. If Cognizant can do this, it can pull away from other IT service providers, while distinguishing itself from its much larger North American competitors.

Still faces challenges related to culture and perception. Perhaps the biggest barriers to thegrowth of Cognizants business solutions may be related to its own culture and client perception: A value proposition based on low cost, reliability, and process expertise may not resonate with business customers seeking creative solutions from thought partners. Furthermore, a culture based on process controls and heavy management oversight may be difficult to transform into a value-added partner.

IBM BRINGS SCALE AND A FULL SET OF CAPABILITIES TO THE BUSINESS CUSTOMER IBM Global Services provides business consulting, application services, and outsourcing to organizations worldwide. Although IBMs roots in services go back to the 1980s, they grew substantially when former chief executive officer (CEO) Louis Gerstner focused the companys turnaround strategy on its ability to provide business clients with comprehensive system integration

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and professional services.13 Gerstners successor, Sam Palmisano, bolstered the companys services capabilities in 2002 with the acquisition of PricewaterhouseCoopers consultancy business for $3.5 billion (see Figure 6).Figure 6 SWOT Analysis: IBM Global Business ServicesCompany attribute Strength Weakness End-to-end focus may be less attractive to companies looking for very specific solutions or smaller-sized engagements.

Corporate/portfolio Known for its global scale and strong strategy execution capabilities, it has a broad portfolio of solutions comprising end-to-end capabilities. Focus is on deepening customer relationships and continued global integration. 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. It has specific marketing programs for 17 industries.

Sales and go-to- It has strong mindshare with both business A layered matrix of organization and market strategy and IT buyers and fosters a relationshipmarketing strategies can make it difficult to identity the clear market approach and driven approach with the C-Suite. focus. Messages can be diluted among multiple audiences. Delivery and It brings together its Smarter Planet execution strategy themes and component business models to deliver value to business customers. New metrics focus on key agility indicators (in addition to KPI's) will be intriguing to business customers. Sustainability and It based its turnaround, in part, on the viability value of technology-related business services, and Sam Palmisano has continued the evolution of the successful strategy. Market attribute Opportunity Threat As business demands for new technology solutions accelerate, the largest players will face their own agility challenges. So far, IBM has done a nice job of building innovation based on tech market changes. Scale and breadth of offerings presents challenges: Vast amount of integration has to take place to bring together IBMs research, services, messaging, and value proposition on a global scale.

Market dynamics Tackling a range of emerging technology opportunities like cloud and SOA, it is also focused on big-picture issues related to topics like sustainability, intelligence, and bringing agility to global businesses. Competitive position It can be competitive with virtually every service provider but distinguishes itself in its broad capabilities and reach. Client perception Nobody gets fired for hiring IBM is the and adoption common phrase that is more relevant than ever in this economy. Client satisfaction is high.47073

Despite its vast improvements, the culture is very process-driven. This may reflect a lack of flexibility.

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An analysis of IBMs focus and capabilities shows that:

The company has a clear focus on delivering integrated business value. IBMs businesssolutions offerings highlight how the companys value proposition flows from thought leadership to its consulting frameworks and performance metrics. 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. It uses its component business models to help clients align their business needs with IT systems by connecting their business architecture, process models, and IT implementation capabilities. Finally, IBM uses key agility indicators (KAIs) as well as key performance indicators (KPIs) to measure the business value that its technology solutions can achieve.

Continued global integration remains an opportunity. More than its smaller competitors,IBM has to strive to keep its global services flexible and agile in a rapidly changing competitive marketplace. The company continues to invest in its global delivery model, managing its global capabilities with its strong process expertise. It has adopted a competency-based approach for provisioning services, like enterprise resource planning (ERP) or industry skills, while ensuring that these competencies are in close geographic proximity to demand. IBM clearly has an opportunity to continue to lead as the global business operations of clients expand.

The company is showing clear commitment to its BT capabilities. IBM recently strengthenedits 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. The announcement fits well with the companys brand image, global capabilities, and Smarter Planet marketing campaign. The announcement shows that the company is committed to the alignment between technology and business strategy and its staying consistent in its market approach.

The companys go-to-market approach may be overly complex. Unlike some of itscompetition, getting a clear understanding of IBMs capabilities and focus can be a difficult endeavor the organization is simply very large, and its breadth of capabilities is immense. This will remain a challenge, particularly for the companys marketing organization. For example, the company segments its markets by vertical, solutions, functional roles, titles, and market themes. 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.

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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 companys strengths, weaknesses, opportunities, and threats. Each vendor had the opportunity to provide Forrester with information and discuss the results with Forrester analysts before publication. However, only a small subset of the responses has been represented here, and in most cases, information has been modified to suit an abbreviated format along with additions from Forrester. The final analysis of these companies is the work of Forrester.

ENDNOTES1

As technology becomes embedded in lines of business and business increasingly relies on technology, a new market opportunity is emerging for IT service providers. 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. The market will be partially defined by its offerings technology solutions that pull together the best of business strategy, IT integration, and delivery. See the January 22, 2009, Market Overview: The Tech-Enabled Business Services Market Opportunity report. The transformation of IT to BT is one of three megatrends that we think will shape the technology marketplace over the next few years. See the November 21, 2008, The Hour Of The Vendor Strategist: Three Mega Business Trends Will Reshape The Tech Sector report. The Forrester Wave is a detailed analysis of vendors products and services based on transparent, fully accessible criteria. Please refer to Forresters description of the Wave. Source: (http://www.forrester.com/ wave). IBM created an Intelligent Transportation System for the City of Stockholm, which it claims has resulted in a 25% reduction in traffic, a 15% reduction in carbon dioxide, and $120 million per year in revenue, with a payback in four years. Capgemini partnered with Raytheon to provide e-border security for the UK. Source: Trusted Borders signs contract with UK Home Office for e-Borders contract Capgemini to provide business architecture for the project, Capgemini press release, November 14, 2007 (http://www.uk.capgemini.com/news/pr/ pr1585/). According to Accenture, George Group helps companies with complexity reduction, lean manufacturing and operations, process innovation, strategic cost reduction, and growth through innovation. Source: Accenture (http://www.georgegroup.com/). Capgeminis Rightshore model helped it make the transformation to a global services company. See the April 28, 2006, Capgeminis Rightshore Transformation report. In November 2008, Capgemini announced a partnership with Amazon to run applications in remote data services. Source: Capgemini (http://www.uk.capgemini.com/news/capgemini_in_the_news/capgeminiand-amazon-bond-in-the-cloud/).

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

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June 22, 2009 | Updated: July 16, 2009

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