The ALM Vanguard - EY · The end game is a more digestible change program governed by a system that calibrates the level of measurement precision to the level of uncertainty surrounding

Buyer Ratings Guide

The ALM Vanguard: Portfolio & Capital Strategy Consulting 2019

August 2019

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Nathan SimonSenior Director, Management Consulting ResearchT +1 212-457-9185 [email protected]

Author

For more information, visit the ALM Intelligence website at www.alm.com/intelligence/industries-we-serve/consulting-industry/

© 2019 ALM Media Properties, LLC 2

Buyer Ratings Guide

Contents

Overview 3

ALM Vanguard of Portfolio & Capital Strategy Consulting Providers 5

Competitive Landscape 6

Provider Capability Rankings 8

Rating Level Summaries 9

Leader Assessments 10

Provider Capability Ratings 11

Best in Class Providers 12

Provider Briefs 13

Definitions 24

Methodology 26

About ALM Intelligence 28

EY - AUTHORIZED USERS ONLY


Buyer Ratings Guide

OverviewCapability Drivers

The past year was a moment of reckoning for many companies. Consulting providers had anticipated that a maturing of

digitization and flush corporate balance sheets would spur significant portfolio moves. Companies instead pressed the pause

button on their portfolio and capital strategies. Capital intensity continued to downshift and M&A activity moderated, while

spending on share buybacks and dividends surged.

Companies are in stock taking mode: asking what they have gotten out of a period of relatively intensive digital experimentation and whether they are on a road to somewhere or nowhere. They are looking backwards to see forwards.

This is amplifying a trend away from the traditional view of portfolios in terms of the economics of market selection. Instead,

companies want to understand the link between the portfolio of assets embedded in their operating models – supply chains,

back office operations, and organizational structures and talent – and what it will take to deliver on their vision of a digital

future state. This demand context is changing the nature of the consulting capabilities that drive impact for clients.

Portfolio and capital strategy consulting always consisted of two activities: setting the strategic objective and putting in place the system for steering the company consistent with that objective. The steering part always played second

fiddle to the objective setting, a pity since steering and the unanticipated challenges it uncovered was the most common

source of failed portfolio strategies. The difference in this digital era in which most companies are midstride transforming

themselves is that these two activities are becoming inseparable as companies incrementally acquire digital assets in the

fashion of learning by doing. Now the execution tail – what can feasibly be done – wags the strategy dog. Gone are the days

when clients would be satisfied with a good strategy study and transformation roadmap. In the current market, consultants are differentiating themselves by their ability to link objectives and outcomes by transforming portfolio and capital strategy into a program of continuous corporate change in which M&A services are becoming a less relevant enabler than broader operating model, human capital, and technology ones.

Decision rules furnish the script for enacting portfolio and capital strategy change programs, but for companies bent on digital transformation profit pools and economic value are academic relics: the stuff of armchair strategists. Capital

budgets today consist less of companies, structures, and equipment and more of software, research and development, and

other types of intellectual property. Capital allocation decision rules increasingly resemble a lop-sided, three-legged stool, with

the long legs of desirability for customers and technical feasibility precariously balanced by a short leg of economic viability.

Consultants need to be able navigate the intangible alongside the tangible drivers of value, with an eye to the culture and ways of working that are the limiting factor that governs the actual value created by those intangible assets.

Companies recognized decades ago that they need to complement the top-down system they use to make finite macro-level portfolio decisions with a bottom-up performance management system for steering myriad micro-level decisions across their organizations. But the search for a system of metrics that could guide and incentivize every

corporate decision in the fashion of a strategic autopilot led them to a dead-end as those systems became detached from

reality. Measuring arbitrary business units by economic value is an oversimplification in an era of horizontal connectivity,

whereas the move in recent years by consultants to value more granular operating assets ushered clients into a morass



Buyer Ratings Guide

of complicatedness. Consultants are seeking for a third way by borrowing a leaf from their work on innovation. They are

differentiating targets and measurement systems for different time horizons and taking care in their change program design

to bring value capture forward. The end game is a more digestible change program governed by a system that calibrates the level of measurement precision to the level of uncertainty surrounding different targets.

Behind every portfolio and capital strategy is an agenda. In the event, most portfolio and capital strategy consulting

demand emanates from challenged companies that, while predisposed towards action, are paralyzed by dissension. In this

context, making transparent biases and overturning unfounded assumptions are the consultant’s biggest challenges. Every

consultant has a point of view on what drives value in the current market, but the art is the ability of consultants to cultivate

a dialogue through which a client executive team can align on shared objectives grounded in their own point of view and a

set of actions to achieve them. The key to a genuinely aligned executive team is not the theoretical accuracy of the objectives

around which it aligns but rather the extent to which they openly and repeatedly grapple with the full range of choices they

face. Consultants are turning to immersive experiences to present divergent points of view as a basis for evaluating scenarios that can frame genuine alternatives for clients.

OverviewCapability Drivers



Buyer Ratings Guide

ALM Vanguard of Portfolio & Capital Strategy Consulting Providers

LEADERS

CHALLENGERS

Low High

Hig

hLo

w

CONTENDERS

Dep

th o

f Con

sulti

ng C

apab

ilitie

s

Breadth of Consulting Capabilities

Deloitte

PwCEY

Roland Berger

AlixPartners

Bain & Company

KPMG

Oliver Wyman

CapgeminiStrategic Decisions Group

McKinsey & Company

BCG

goetzpartners

Accenture

A.T. Kearney

L.E.K. Consulting

IBM

PA Consulting

Prophet

Marakon

Source: ALM Intelligence

The ALM Vanguard of Portfolio & Capital Strategy Consulting Providers assesses firms in terms of their relative ability to create

impact for their clients. For this, the ALM Vanguard displays the relative position of the providers featured in this report,

deemed capable in portfolio & capital strategy consulting, based on an evaluation of their overall capabilities according to

a consistent set of criteria. Capability depth denotes a provider’s capacity to get results for clients, while capability breadth

indicates its ability to deploy that capacity across multiple client scenarios.

Consulting is distinctive from other industries because of the variety of client contexts that providers encounter in terms of

ambitions, needs, and abilities that alter what it takes to create impact. As providers seek to deploy their capacity to create

client impact (depth) across industry sectors, geographic regions, and interfaces with adjacent functional and technical

capabilities (breadth), they increase the complexity of their engagement models. The downward slope of the lines that

separate the tiers of the market captures the trade-off between low-complexity engagement models (designed to maximize

the capacity to create impact for a narrow set of client applications) and high-complexity engagement models (made to

maximize deployability and create impact for a wide variety of client applications).



Buyer Ratings Guide

Competitive Landscape

Traditional buyers of portfolio and capital strategy consulting are looking for an expert opinion. These are typically

new CEOs or Boards who need the blessing of an objective third-party for their preconceived strategic vision. The principle

challenge facing those buyers is the organizational inertia engendered by longstanding and deeply ingrained biases and

assumptions that thwarts change programs. Those buyers seek to close rather than open debate; they want unassailable

arguments grounded in hard economics from consultants. In this context, size and breadth of services are much less important than consultants’ gravitas and the trust they inspire among clients’ most seasoned executives.

Because portfolio and capital strategy consulting traditionally trades off market participation choices at the business unit level, M&A – both acquisitions and divestitures – is by far the most common mechanism for changing the client’s portfolio. While consultants mock the simplicity of the growth share matrix, much consulting in this market continues to

revolve around the reallocation of resources from losing or stagnant market positions to winning ones, with the nuance more

on how to judge losing versus winning. The basic formula is: divest losers, acquire winners, and cut costs in the stagnant ones

to free up cash. This favors consultants who work at the nexus of clients’ CEO and finance organizations, complementing their market insights with transaction services to execute macro-level portfolio moves and a combination of value-based management and zero-based budgeting to calibrate micro-level resource allocation.

Digitization and the displacement of where-to-play market position by how-to-win capabilities as the dominant driver of strategic differentiation is upsetting this traditional supply side of the portfolio and capital strategy consulting competitive landscape. Inasmuch as those how-to-win capabilities are the product of bottom-up decisions and

experience with new ways of working across the organization, market insights backed by the classic consulting trifecta of

transactions, value-based management, and zero-based budgeting is less relevant. The center of strategic gravity is shifting

towards clients’ operations and organizational structures. But the sine qua non of any strategy fit for the digital era is the link

between these operating assets and a distinctive customer value proposition. This context favors consulting providers with more operational and technology breadth at the expense of those focused on the traditional intersection of market strategy and finance. But the combination of customer insights and operating capability knowhow so central to digital strategy apposes uneasily at most consulting providers.

Leaders. While unchanged in terms of the providers that make it up, the leaders group is changing radically how it prosecutes

portfolio and capital strategy. Most of the providers in this group are reacting to the impact of digitization by downplaying

the tight linkage of their historical delivery models with corporate finance and elaborating connections with their operations,

organization, and innovation service offerings. BCG retains the top position in the rankings and widens slightly its advantage

relative to the second-ranked provider, reflecting the former’s combination of longstanding strength in the discipline

augmented by new capabilities for digitizing core operations, adopting new ways of working, and launching new businesses.

Bain is the biggest mover not only among leaders but also the market overall. That firm is stitching together with its historic

strategy strength distinctive offerings for activating the client’s front line and leadership to build new capabilities. While

it is investing in new digital capabilities, goetzpartners gives up one position in the rankings as its traditional strength in

transactions loses some of its relevance.



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Challengers. As a group, the challengers, while relatively diverse, share for the most part the characteristic of holding their

portfolio and capital strategy resources apart from their forays into digital offerings. As a newcomer to the rankings this year,

Prophet bucks this trend, pivoting off its customer insights and agile-inspired service delivery model. Marakon, among the

founders of the discipline, loses the most ground as its purist capital markets inspired approach falls out of favor amidst the

push for digital transformation.

Contenders. The contenders are splitting into two sub-groups. The haves consist exclusively of non-traditional strategy

consulting providers that are using their operations and technology breadth together with investments in innovation as a

launchpad for their portfolio and capital strategy offerings. These include Accenture, Capgemini, IBM, and PA Consulting. The

have-nots consist of a more eclectic group of providers, including AlixPartners, KPMG, L.E.K., and Roland Berger. These share

with some of the challengers the characteristic of holding their strategy resources apart from their digital offerings, with the

difference being that they started with weaker foundations in the core discipline.

Competitive Landscape



Buyer Ratings Guide

Provider Capability Rankings

The figures below indicate the change in consulting providers’ ranks in terms of their overall capability depth, breadth, and

client impact. (See the Definitions section of this report for a detailed breakdown of underlying capabilities.) Ranking position

number one denotes the top-ranked provider.

Depth Breadth Client Impact

2018 2019 2018 2019 2018 20191 BCG BCG 1 EY EY 1 BCG BCG Leader

2 McKinsey & Company

Bain & Company 2 PwC PwC 2 McKinsey &

CompanyBain & Company

3 Deloitte (Tied 3) McKinsey & Company (Tied 3) 3 Deloitte Deloitte 3 Deloitte McKinsey &

Companygoetzpartners

(Tied 3)goetzpartners (Tied 3) 4 KPMG KPMG 4 EY EY

5 Bain & Company Deloitte 5 BCG BCG 5 PwC Deloitte

6 EY EY 6 McKinsey & Company IBM 6 goetzpartners PwC

Challengers

7 PwC (Tied 7) PwC (Tied 7) 7 IBM McKinsey & Company 7 Bain &

Company goetzpartners

Marakon (Tied 7) Prophet* (Tied 7) 8 Accenture Accenture 8 Marakon Prophet*

9 A.T. Kearney (Tied 9)

A.T. Kearney (Tied 9) 9 Oliver Wyman Oliver Wyman 9 Oliver Wyman Oliver Wyman

Oliver Wyman (Tied 9)

Oliver Wyman (Tied 9) 10 AlixPartners Capgemini 10 A.T. Kearney A.T. Kearney

11 Open Options** Marakon (Tied 9) 11 Bain &

Company Bain & Company 11 KPMG Marakon

12 KPMG (Tied 12) L.E.K. Consulting (Tied 12) 12 Roland Berger PA Consulting 12 Roland Berger Roland Berger

L.E.K. Consulting

(Tied 12)Roland Berger (Tied 12) 13 A.T. Kearney AlixPartners 13 L.E.K.

Consulting KPMG

Contender

Roland Berger (Tied 12) KPMG 14 PA Consulting A.T. Kearney 14 Open

Options**L.E.K. Consulting

15 Houlihan Lokey, Inc** PA Consulting 15 Capgemini Roland Berger 15 Houlihan

Lokey, Inc** PA Consulting

16 AlixPartners (Tied 16) AlixPartners 16 goetzpartners L.E.K. Consulting 16 AlixPartners AlixPartners

PA Consulting (Tied 16) IBM 17 L.E.K. Consulting goetzpartners 17 PA Consulting IBM

18 Accenture Accenture (Tied 18) 18 Houlihan

Lokey, Inc** Marakon 18 Accenture Accenture

19 Strategic Decisions Group

Strategic Decisions Group (Tied 18)

19 Marakon Prophet* 19 Strategic Decisions Group

Strategic Decisions Group

20 IBM Capgemini 20 Open Options** Strategic Decisions Group 20 IBM Capgemini

21 Capgemini 21 Strategic Decisions Group 21 Capgemini

*Firms not previously covered, **Firms not covered in 2019 Source: ALM Intelligence



Buyer Ratings Guide

Rating Level Summaries

ALM Intelligence rates providers according to a three-level scale based on their relative breadth and depth of overall

capabilities. Each rating level corresponds to an area in the ALM Vanguard graphic bounded by a downward sloping line

designed to equate engagement models of different degrees of complexity.

Rating Level Providers Description

Leaders

Bain & Company BCG The leaders are at the top of the market in terms of their capabilities to create client impact through their depth of expertise and ability to deploy it across a range of engagement models. They are unique in their ability to independently execute a broad array of projects across the full spectrum of client contexts. They range from providers in the top quintile in terms of depth of capability for low-complexity engagement models to those that combine above average depth of capability with the ability to deploy it across high-complexity engagement models.

Deloitte EY

goetzpartners McKinsey & Company

PwC

Challengers

A.T. Kearney Oliver Wyman The challengers can execute end-to-end projects in low complexity engagement models or a substantial portion of project components in high-complexity engagement models. They range from those with above-average depth of capability for low-complexity engagement models to those that combine depth of capability between the bottom third and top half of the distribution, with the ability to deploy it in high complexity engagement models.

Prophet

Contenders

Accenture AlixPartners The contenders can execute a substantial portion of projects in low-complexity engagement models or a single phase or project instance in high-complexity engagement models. They range from those with average depth of capability for low-complexity engagement models to those that combine depth of capability in the bottom third of the distribution with the ability to deploy it in high-complexity engagement models.

Capgemini IBM

KPMG L.E.K. Consulting

Marakon PA Consulting

Roland Berger Strategic Decisions Group




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Leader Assessments

The ALM Vanguard of Portfolio & Capital Strategy Consulting Providers comprises the following Leaders.

Leaders Strengths

Bain & Company

Bain is particularly effective at bringing together “today forward” and “future back” approaches to transform a point in time checkup into an ongoing, living discipline.

BCG

BCG leads the market in terms of capability depth. An early convert to the imperative to apply more diverse analytical perspectives to portfolio analysis and decision-making, BCG brings a nuanced view on value drivers. Also a standout for its insight into the science of portfolio transformation and ability to help companies simultaneously plan for big strategic moves and adopt ongoing strategy steering, the firm is actively adapting these capabilities for driving digital transformation, drawing on its data science and venturing resources.

Deloitte

Deloitte exhibits the most consistent capabilities, indicating a high degree of balance across the service delivery continuum from discovery through design and delivery of its consulting. The firm’s strategic choice framework is particularly effective for linking portfolio decisions to a company’s underlying strategic ambitions and assumptions, facilitating course corrections if either of the latter change.

EY

EY is a strong believer in the centrality of capital to competitive advantage and its “capital agenda” is an explicit model for harnessing a diverse collection of resources for helping clients preserve, optimize, raise, and invest their capital. This results in the broadest capabilities in the market, with notable contributions from EY’s broader management consulting resources and reach into adjacent services such as tax and transactions. The firm is innovating its approach with investments in a distinctive point of view and method for valuing the intangibles that drive long term value.

goetzpartnersgoetzpartners’ heritage in strategy and transactions positions it at the heart of portfolio and capital strategy. The firm is particularly effective at helping clients embed portfolio metrics into a system for steering strategy both at corporate and operational levels.

McKinsey & Company

Focused on the imperative companies face to make bold strategic bets, McKinsey is notable for the way in which it interweaves distinctive insights on external markets and sectors with practical ways companies can shake up and invigorate their system for managing capital allocation.

PwC

With its “capabilities-driven strategy” perspective and tools, PwC stands apart for its ability to make transparent the differentiated combinations of people, processes, technology, and know-how that yield competitive advantage. This helps client teams get beyond the numbers and align on how investments actually get operationalized: a crucial insight as companies embark on digital transformations that entail new ways of working.




Buyer Ratings Guide

The table below provides detailed capability ratings for Portfolio & Capital Strategy consulting providers. (See the Definitions section of this report for explanations of the capabilities.)

Provider Capability Ratings

Legend: Very Strong Strong Moderate Weak None

Provider Capabilities: Portfolio & Capital Strategy Consulting Discovery Design Delivery

Needs Assessment

External Market Insight

Internal Client Insight Strategy Operating

SystemManagement

SystemProject

ManagementClient

Capability Development

Enabling Tools

A.T. Kearney

Accenture

AlixPartners

Bain & Company

BCG

Capgemini

Deloitte

EY

goetzpartners

IBM

KPMG

L.E.K. Consulting

Marakon

McKinsey & Company

Oliver Wyman

PA Consulting

Prophet

PwC

Roland Berger

Strategic Decisions GroupSource: ALM Intelligence



Buyer Ratings Guide

Best in Class Providers

Providers identified as best in class evidence deep capabilities in specific areas of Portfolio & Capital Strategy consulting and

stand out from their peers for their highly effective and often innovative consulting approaches and service delivery.

Capability Areas Provider Strengths

Needs Assessment goetzpartners

A hands-on service delivery model targeted at the interface between senior and line management together with investments in a proprietary point of view on the portfolio impacts of digitization contribute to notable strength in framing projects.


McKinsey & Company

McKinsey’s investments in a combination of benchmarking, trend analytics, and industry research afford clients a rich, highly granular view of how the external market impacts their portfolio choices.

Internal Client Insight Prophet

A relative newcomer to portfolio and capital strategy, Prophet’s laser focus on unlocking step change growth through customer value backed up by an agile delivery model yields distinctive strength in uncovering unanticipated insights.

Strategy Bain & Company

By balancing its longstanding focus on realizing the full potential of the core business with its nuanced views on how to both reinvent the core and build what it terms the “next engine” of growth, Bain is particularly effective at helping clients develop dynamic portfolio strategies that can solve for a changing set of objectives.

Operating System EY

Drawing on a distinctive set of resources, ranging from its supply chain consultants to the firm’s UMT portfolio management tool, and a disciplined approach to structuring decision-making processes, EY is unparalleled for its ability to help clients rigorously analyze and optimize their portfolio strategies.

Management System BCG

With substantial experience serving conglomerate company clients, BCG has developed a practical approach for helping clients build a system for rigorously and objectively managing the ongoing resource reallocations required to execute multi-step portfolio transformations.

Project Management PA Consulting

Combining a targeted program management practice steeped in complex, high stakes projects with an agile delivery model built to cultivate client alignment, PA stands out for its ability to help clients manage portfolio strategy engagements.

Client Capability Development PwC

In a still underserved area of portfolio and strategy consulting, the combination of PwC’s real-world “capabilities-driven strategy” approach with its workshop-based service delivery contributes to enduring client capabilities in terms of both hard skills and mindsets and behaviors

Enabling Tools BCGBCG combines a number of diagnostic tools for accelerating data processing and gaining a balanced perspective on value drivers with an obeya-style delivery that streamlines the progression from insight to decision.




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Provider Briefs

Leaders Bain & CompanyApproach At the heart of Bain’s consulting approach is the view that every business is a complex portfolio of different market positions, and

the objective of strategy is to focus on those in which a company has or can achieve leading market share positions that afford attractive and sustainable economic results. Bain’s approach weaves together three strategic priorities. One, a correlary of its “profit from the core” point of view, is to avoid poor market position bets disconnected from the differentiated assets of the core business: perhaps the biggest barrier to delivering sustainable, profitable growth. Another is the imperative to create repeatable business models in the core business for executing strategies by translating them into front-line routines and behaviors that can be readily extended into adjacent markets. The last is the importance of focus to balance the relative costs and benefits of scale versus speed as companies seek to reivent the core business and develop their next growth engine. Taken together, these three strategic priorities result in an approach to portfolio strategy characterized by an emphasis on investing resources in assets that are essential to the differentiation of the core business and adding to the portfolio only in cases that build on existing assets and routines in ways that facilitate the achievement of leading positions in new businesses without unduly adding to complexity.

Practice Structure

Bain organizes its resources through its corporate strategy practice.

Service Delivery Model

Bain differentiates its service delivery for resolving the related but distinct questions of how to direct portfolio strategy to capitalize on and realize the full potential of the core business versus reiventing the core business. The former employs “today-forward” methods designed to optimize portfolio choices in the context of the client’s ambition, financial choices, and the parenting advantages particular to a specific corporate owner. Essential to this is a clear definition of the core business in terms of key assets and sources of differentiation matched against relative market opportunities in terms of size, advantages afforded by the core, strengths of competitors, complementarity with potential moves into further adjacent markets, and ease of implementation. Resolving the latter question of how to craft portfolio strategies designed to reinvent the core business turns on the application of “future-back” methods. These build from Bain’s work on how to cultivate a “founder’s mentality” for balancing the benefits of scale and insurgency. The practical deployment of this is Bain’s “micro-battles” offering designed to build a portfolio of agile-inspired projects to cultivate new strategic capabilities.

BCGApproach BCG grounds its approach to portfolio strategy in the findings of three internal research programs directed at understanding

how companies conduct portfolio strategy, conglomerate strategy and what distinguishes high- and low-performing diversified companies, and how corporate centers add and destroy value and the nature of ownership advantage. These research streams inform three core views that inspire BCG’s portfolio strategy consulting. One is that actively reallocating resources through portfolio management and the corporate budgeting process is essential for steering businesses in line with strategic and financial targets across time horizons. Another is that effectively reallocating resources requires a clear understanding of how and where the company can achieve ownership advantage based on three distinct perspectives (market-based, value-based, and resource-based) and the company’s starting context. The last is that the increasing speed and unpredictability of change in the external environment requires that companies improve their strategic experimentation capabilities by paying more attention to the distribution of resources across existing businesses and longer-term bets.

Practice Structure

Portfolio strategy (in the form of its “growth-share” matrix) was a founding concept of BCG, which it continues to embed as a central offering within the context of broader corporate strategy. BCG organizes its offering through its Corporate Development practice, which brings together offerings targeted at value-based management and the finance function. This organization reflects the firm’s positioning of portfolio strategy independent from but closely linked to transaction services and corporate strategy.


BCG’s core portfolio strategy consulting process builds from a two-part assessment. The first is a top-down assessment of the portfolio strategy context in terms of the corporate mission and objectives, industry outlook and “way to play,” and ambition over the next five to 10 years. The second is a bottom-up assessment of portfolio performance in terms of strategic potential, return on investment, and ownership advantages. The translation of the portfolio strategy into outcomes in BCG’s process hinges on the definition of portfolio roles to guide actions. Outcomes tend to cluster in three areas. One focuses on changing the portfolio through corporate transactions and future bets. Another, typically occuring in the context of a digital transformation, enacts operating model changes to remake components of the portfolio. The last concentrates on steering strategy by adapting the capital budgeting process, performance management system, financial structure and dividend strategy, and investor communications. To support its service delivery, BCG uses a number of resources including its “portfolio x-ray” tool for developing roles for different business units and center for sensing and mining the future to track trends impacting strategic choices.




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Provider Briefs

Leaders DeloitteApproach Deloitte’s approach to portfolio strategy reflects what the firm considers to be the three principal shortcomings of conventional

portfolio management. One is mismanagement in the form of either reactively managing portfolios or incrementally managing them through a standard capital budgeting process. Another results from weak analysis that is too simplistic, one-size-fits-all and focused on portfolio components rather than interactions among them. The last is failure to implement, either because companies take a purely C-suite approach or they fail to articulate sufficiently concrete portfolio strategies to guide actions. Deloitte’s consulting approach is all about helping clients build what it terms “advantaged” portfolios that are strategically sound, value-creating, and resilient.

Practice Structure

Deloitte primarily delivers portfolio strategy services through the Corporate and Business Unit Strategy arm of Monitor Deloitte.


While top-down, Deloitte’s service delivery is designed to engage a broad client management team in a conversation about strategic choices. Deloitte organizes its service delivery around helping client overcome the challenges that motivate its approach. For mismanagement challenges, Deloitte puts portfolio strategy at the center of its “strategy choice cascade” framework for resolving what it considers to be the five critical corporate decisions: strategic aspirations, where to play, how to win, capability requirements, and the nature of the management system? To improve analytics, the firm assesses nine portfolio attributes organized around the three attributes of advantaged portfolios: strategic soundness, value creation, and resilience. To support portfolio strategy implementation, Deloitte puts in place a process by which companies can adapt their strategies to changing conditions and invest in new capabilities.

EYApproach EY conceives of portfolio strategy in the context of broader enterprise cost and business model transformations targeted at right-

sizing a company for future competitive dynamics. EY’s consulting approach for portfolio strategy targets two process gaps that constrain clients. One is the gap between strategy and resource allocation decisions and ultimately the way the business gets managed. The other is the one between strategies and the ability to execute portfolio transformations.

Practice Structure

EY coordinates its offering through its strategy and customer practice, which encompasses both growth and operating model topics as well as customer experience, sales, and service ones. This practice draws additionally on the firm’s finance, supply chain, tax, and transactions resources. The firm goes to market with these resources through its industry practices.


EY organizes its service delivery around three activities. One consists in setting up a systematic decision rule to bring transparency and consistency to capital allocation. For EY, this rule needs to combine three perspectives: financial return taking account of the cost of capital, strategic fit, and risk. To anchor the decision rule, EY invests substantially in benchmarking to help clients understand how their capital allocation across major categories compares to competitors. Another concentrates on putting in place the capital allocation operating model, drawing on the firm’s supply chain and engineering resources for rigorous stage-gating and its driver analytics tools and methodology for embedding financial metrics. The last constructs the data and decision support infrastructure for project visibility and tracking. For this, the firm draws on the tools it obtained as part of its acquisition of project portfolio management specialist UMT that support tracking the performance of strategic initiatives against objectives at an operational level. To help clients develop the muscle and culture for executing portfolio transformations based on a new decision rule, EY starts at the highest level, including principally transactions and capital projects, before targeting more tactical moves.




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Provider Briefs

Leaders goetzpartnersApproach goetzpartners targets its overall consulting approach at what the firm considers to be the three core entrepreneurial activities:

strategy, transactions, and transformation. Effective portfolio strategies, per goetzpartners, need to be executable, which requires a tight linkage with the transactions expertise for making portfolio moves that deliver measurable impact. goetzpartners’ approach also relfects the point of view that companies need both nimble processes for adapting their corporate strategies and rigorous methods for translating them into action.

Practice Structure

goetzpartners was founded in Germany and has additional offices in North America, across Europe, the Middle East, and Asia. The firm’s structure brings together management consulting and corporate finance services.


goetzpartners’ entrepreneurial and practical culture colors its service delivery. The firm puts an emphasis on bringing together the executive leadership team to build a vision and closely collaborates with the operational leads to execute on it. To develop the vision, goetzpartners prepares an investor-style compendium on external market dynamics to identify value creation priorities. The firm simultaneously works with key stakeholders to understand the client’s capabilities and culture. goetzpartners relies heavily on data-intensive workshops that employ game theory and other techniques to help clients adapt their strategies for fast-changing market environments. To help clients execute their strategies, goetzpartners introduces a governance system, designs a balanced portfolio of initiatives together with operational teams, defines performance management metrics in close alignment with the client’s finance function, and supports behavioral change in coordination with the client’s HR function. The firm places a strong emphasis on using both rigorous performance management and change management efforts to create measurable results, cultivate engagement, and sustain activities.

McKinsey & CompanyApproach McKinsey’s consulting approach starts from the premise that strategic performance, defined as beating the market in terms of

economic profit, is a function of three factors: a company’s starting position, trends in its sector and markets, and strategic moves. This elevates portfolio choices and related execution activities as the principal performance lever over which companies can exert control. The firm’s recipe for improving performance in this context consists of two ingredients. One is thoughtful micro-level market selection informed by highly granular analytic insights and a more inclusive process that embraces outside-in, divergent perspectives. The other consists in making bold, unbiased strategic bets and frequently reallocating corporate resources to deliver on those bets.

Practice Structure

McKinsey delivers its offering through its strategy and corporate finance practice.


McKinsey organizes its service delivery around two main streams of activities aligned to its approach. One concentrates on obtaining micro-level insights as a basis for designing a target portfolio. For this, the firm draws heavily on a number of proprietary tools, including its portfolio analyzer and explorer iPad apps for assessing the current portfolio and evaluating alternative initiatives. The firm’s resource reallocation diagnostic zeros in on a company’s experience and ability reallocating resources. McKinsey’s corporate performance analytics allows clients to benchmark their performance and evaluate value creation strategies. The other stream targets portfolio transformation through a collection of techniques designed to break clients out of old ways of working and biases. These range from shifts in the planning process to incentive changes and the imposition of rules designed to force resource reallocation. McKinsey also offers a targeted service for capital project portfolio optimization that employs the firm’s tools for scenario modeling and program management.




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Provider Briefs

Leaders PwCApproach PwC’s consulting approach is fundamentally about putting in place a system for ongoing resource allocation decisions based on a

strategic logic that is both fact-based and something on which everyone agrees. This logic, what the firm calls “capabilities-driven strategy,” holds that good resource allocation decisions depend on two factors. One is the relative integration of strategy with execution. For this, PwC believes companies need clarity on their distinctive value proposition, the short list of capabilities critical for delivering it, and which products and services best fit with it. Creating what PwC calls “coherence,” that is alignment among these, is the essential determinant of the relative integration of strategy and execution. The other is knowledge of where the company is generating economic profit.

Practice Structure

PwC organizes its offering through the business strategy arm of its Strategy& affiliate, which brings together resources related to corporate strategy, organic growth, portfolio strategy, pricing, shareholder value, and strategic planning.


The foundation of PwC’s service delivery is a change program designed to shift how a client measures performance, aligns around portfolio moves designed to improve that performance, and enlists the broader organization in delivering against those moves. That change program starts by defining and measuring current performance against the client’s success objective, which typically revolves around close coordination between the CEO, CFO, and Board. The next step develops strategic alternatives with an eye to identifying five to seven initiatives that will measurably impact company value. PwC enlists its Business, Experience, Technology (BXT) workshop methodology for a more hands-on, outside-in alternative development process. The final step links those strategic moves to organizational execution by means of PwC’s twin capabilities-driven strategy and fit-for-growth methodologies for freeing up resources and targeting them at the essential capabilities clients need to deliver on their value proposition. The firm also draws on its broader operating model, technology, and transaction services to support client execution against portfolio moves.




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Provider Briefs

ChallengersA.T. KearneyApproach A.T. Kearney contrasts its consulting approach with the traditional conception of portfolios in terms of market attractiveness and

competitive position.The relative attractiveness of markets is not always predictable, per this firm, and the most effective strategies often seek to shape rather than adapt their positioning to existing markets. Therefore, the firm grounds its approach in an assessment of two dimensions that cut to the heart of this disconnect: market predictability and Company DNA, which it defines as a company’s desires, needs, and ability to shape its industry. A.T. Kearney directs its apporach at helping clients to evaluate strategic options for its different businesses across what it calls a “strategy chessboard” composed of different combinations of predictability and company DNA. The firm counsels companies to apply the approach at multiple levels (corporate, business unit, and products). Hallmarks of this strategy chessboard approach include taking a future-in, scenario-based perspective on strategy formulation – what A.T. Kearney terms “strategic foresight,” conducting strategy formulation in an organizationally inclusive way, and adopting multiple strategies aligned to a portfolio of competitive advantages

Practice Structure

A.T. Kearney delivers portfolio strategy consulting through the Corporate Strategy arm of its Strategy practice.


A.T. Kearney’s overarching strategy chessboard process consists of three activities: determining DNA and industry context for each business unit, performing industry analysis to identify strategic options, and evaluating those options against DNA for executability. Through its Dynamic Decision Management method, A.T. Kearney tailors its way of evaluating resource allocation decisions to the relative market predictability and business flexibility consistent with its strategy chessboard approach, ranging, for example, from using traditional discounted cash flow analysis for relatively predictable and inflexible opportunities to total value methods that capture the value of business flexibility.

Oliver WymanApproach Oliver Wyman’s consulting approach starts from the position that customer-centricity rather than current capabilities is the essential

criterion for effective strategy. This translates into a focus on an “outside-in” strategy process that starts with customer needs as a basis for resource allocation decisions.

Practice Structure

Oliver Wyman organizes its resources through its strategy consulting practice, while largely going to market through industry practices.


Oliver Wyman’s service delivery combines four core activities. One is the firm’s “business design” method for valuing the different components of the client’s business and evaluating them in the context of market trends. The second is the firm’s “strategic choice” analysis for understanding customer needs and behavioral drivers. The third is the firm’s “strategic managing” methodology for integrating planning and resource allocation processes. The last is the firm’s “interactive strategy models” process for understanding business drivers and the linkage between strategic initiatives and financial outcomes.




Buyer Ratings Guide

Provider Briefs

ChallengersProphetApproach The bedrock of Prophet’s consulting approach is customer-led growth growth. The firm got its start by zeroing in on the link

between brand purpose and the actual experience delivered with a distinctive point of view on the nature of brand relevance and its source in a combination of customer obsession, pragmatism, inspiration, and innovation. Prophet is evolving this approach to concentrate on uncovering sources of what it calls “uncommon” growth. Capturing these, per this firm, hinges on companies embarking on a transformation agenda that is equal parts digital and human-centric. The firm’s approach to portfolio strategy is an outgrowth of the firm’s longstanding work on brand portfolios. But Prophet firmly believes that in the digital age brand cannot be divorced from the broader operating model that delivers the customer’s experience with a brand. The firm calls this “demand driven portfolio.”

Practice Structure

Prophet, based in San Francisco (with additional offices in Asia, Europe, and North America), focuses in three key areas: brand and experience, growth acceleration, and digital transformation. The firm has evolved through a series of acquisitions, including those of creativity and innovation specialist Play; German marketing consultancy Noshokaty, Döring & Thun; brand, marketing, and innovation firm (r) evolution; digital design and development studio Material Group; UK-based brand and design firm Figtree; and most recently, digital research company, Altimeter Group, and digital agency, Springbox.


Prophet’s service delivery continues to anchor on uncovering distinctive customer insights powered by a combination of analytical and design thinking methods as a basis for understanding how customer value is evolving and what it will take to deliver it. Customer value is the essential criterion on which this firm bases portfolio choices. But the firm’s service increasingly extends beyond idea generation to the activation of both the client’s leadership and broader organization to execute a strategy. A key motivator for how the firm delivers its services is its conviction that companies need much more flexibility in both their strategies and how they execute them. This manifests in broader project stakeholder engagement that extends beyond the firm’s traditional strength in the front office into the finance and HR organizations. It is also reflected in a more agile delivery model designed to provoke unconventional thinking, while subjecting ideas to the discipline of rapid prototyping.




Buyer Ratings Guide

Provider Briefs

ContendersAccentureApproach Accenture directs its consulting approach at helping companies manage the transition from the core business of today to the new

business of the future. Per Accenture, managing this transition hinges on “competitive agility,” that is, the ability to simultaneously achieve profitability and growth on a foundation of trust and purpose. For this, the firm emphasizes a zero-based mindset for radically reallocating resources and capabilities together with a flexible approach to obtaining the digital capabilities that will matter in the future through acquisitions, organic builds, or some form of partnering.

Practice Structure

Accenture organizes its offering through its strategy consulting practice.


Accenture concentrates its service delivery on two actvities. One focuses on funding growth through the adoption of a zero-based mindset to drive cost reconfiguration and an organization fit for new capabilities. The other designs the optimal portfolio with a strong focus on understanding how digital capabilities will disrupt traditional sources of competitive advantage and links closely with the firm’s transaction services for implementing portfolio strategies via acquisitions, divestitures, and joint ventures and alliances. For this, the firm focuses on applying analytics and artificial intelligence technologies to enrich and automate portfolio transformations.

AlixPartnersApproach While it has expanded from its roots in revitalizing bankrupt or distressed entities to helping healthy ones, AlixPartners retains its

focus on delivering measureable financial results in months rather than years and belief that achieving the sort of transformative change necessary to these results hinges on overcoming the incrementalism that results from risk aversion and a narrow outlook.

Practice Structure

AlixPartners goes to market through industry practices, drawing on resources focused on turnaround and restructuring, mergers and acquisitions, and performance improvement based on client financial health and situational needs.


AlixPartners differentiates its service delivery for distressed versus healthy companies. For the former, the firm focuses on rapid liquidity maximization. At the portfolio level, this typically translates into divestitures. For healthier companies, AlixPartners organizes its service delivery around achieving strategic change across the five performance dimensions with broad implications for the business, including costs, the balance sheet, service levels, revenues, and risk management. The workhorse of AlixPartners’ service delivery is its proprietary “quickstrike” assessment and functional improvement frameworks, which evaluate clients in terms of profit maximization, funding and acquisition choices, and financial structure. The firm’s service delivery is geared towards obtaining a fact base in weeks rather than months to guide and build buy-in around initiatives. This priority on speed is emblematic of the firm’s overarching emphasis on pragmatic consulting geared towards realizing measureable results on tight timeframes through the deployment of highly experienced practitioner consultants.




Buyer Ratings Guide

Provider Briefs

ContendersCapgeminiApproach Capgemini focuses its consulting approach on how to develop strategies fit for today’s volatile and uncertain economic

environment. For this, the firm draws on its heritage in business transformation to promulgate a holistic approach to digital transformation grounded in an ambitious future-back vision and enabled by rigorous governance. Convinced partnering with ecosystems will increasingly be a driver of competitive advantage, Capgemini is evolving its approach to portfolio strategy to account for a variety of asset ownership models and the strategic value individual assets contribute to an overall network of assets.

Practice Structure

Capgemini concentrates its resources in the newly formed Capgemini Invent organization that brings together data, technology, and consulting assets, as well as design capabilities and studios obtained via the acquisitions of innovation strategy provider Fahrenheit 212, user-centered design and strategy firm Idean, and experience specialist Liquidhub.


Capgemini structures its service delivery around targeted offerings for business unit strategy, growth strategy, strategic planning coupled with scenario analysis, and broader transformations for clients contemplating significant strategic change. For portfolio strategy, Capgemini organizes its service delivery around answering three questions. The first is the “why,” which answers the question of how the drivers of a client’s value creation potential will change. The second is the “what,” which designs a portfolio optimized for both short and long-term value creation priorities as well as operating model and strategic requirements. The last is the “how,” which addresses the appropriate cadence and mode of portfolio transformation. Capgemini offers complementary merger and acquisition services to help clients execute portfolio moves.

IBMApproach IBM’s consulting approach starts from the premise that competitive advantage is increasingly the product of digital capabilities

for delivering innovative customer experiences. That transforms the object of portfolio strategy from businesses to new business models, bettter ways of working and using analytics, and new expertise sourced both internally via talent systems and externally through ecosystems and acquisitions. This conception of portfolio strategy builds from the firm’s longstanding “component business modeling” approach, which shifts from optimizing processes to entire enterprises by focusing on the specialized capabilities - and coordinated ecosystems that support them - that drive customer experience. This approach conceives of companies as networks of modules or business components – capabilities sourced from both inside and outside the company that involve people, processes, and technology, together with a consistent governance mechanism for linking business components across an organization to execute strategies. To this approach, IBM adds its “globally integrated enterprise” method of continuous transformation modeled on its own transformation experience, with a focus on analytics and agility. Taken together, portfolio strategy, per IBM, depends on a clear understanding of the value of different customer experiences and the business components involved in delivering them.

Practice Structure

IBM delivers services through its business strategy and design area, which organizes resources for digital transformation, experience design, innovation, and process reengineering.


IBM’s traditional component business modeling process consists of three phases designed to create a transformation roadmap. The first assesses the business strategy and builds the current business component map by grouping activities into components and arraying them in terms of business competencies and accountability levels, with an eye to identifying hot spots of competitive differentiation and operating efficiency. The second develops a target component map that articulates gaps between current and future components. The last defines and prioritizes opportunities and plans initiatives with a strong focus on ways to source new capabilities from ecosystems. IBM’s service delivery combines design thinking and agile workshops for creatively envisioning the customer experiences that matter and piloting new initiatives. The firm’s broader services for establishing global shared services, integrating and automating end-to-end processes, and putting in place global centers of excellence typically come into play to support transformations.




Buyer Ratings Guide

Provider Briefs

ContendersKPMGApproach KPMG developed its approach to portfolio strategy in response to two client challenges: how to connect strategy with results

and how to craft holistic portfolio strategies that bring together different perspectives on financial value, risk, tax, and regulation. KPMG’s response is threefold. First, the firm believes that resourcing decisions should be based on actual cash flows from granular assets such as R&D activities rather than the traditional approach of focusing on business units and divisions. Second, the analytics of asset valuation need to take into account multiple perspectives, including traditional cash flow valuation, an assessment of regulatory and tax implications, and a position on strategic fit. Third, translating strategies into actions requires connecting them to the business and operating models and following the value chain down into the organization to where results are achieved. What KPMG calls “innovation to results” is the ability to capture the opportunities and manage the risks occasioned by disruptive changes emanating from new technologies, sector convergence, and political interference in markets with strategies that connect financial, business, and operating models.

Practice Structure

KPMG organizes its resources through a global strategy group constituted in 2013 to pull together the firm’s strategy capabilities from across its member firm network and integrate them across its functional offerings, including management consulting, risk consulting, and transaction advisory services.


KPMG targets its strategy services at four challenges: growth, operating strategy and cost, M&A, and enterprise-wide transformation, with the latter most frequently encompassing portfolio and capital strategy. Motivating the firm’s service delivery are two convictions. One is to take insights and ideas to clients that combine provocativeness with pragmatism through a mix of longer-term plays with short-term moves. The other is to work shoulder-to-shoulder with clients to co-create bespoke strategies. The core of KPMG’s strategy consulting process is its “9 Levers of Value” framework, which brings together the client’s financial, business, and operating models into an integrated strategic architecture that can serve as a common language across the organization for making and evaluating strategic choices. The process starts by using the framework to outline a future profile of the organization. The firm then works with the extended leadership team in a highly participative process to align on the target vision and financial performance choices and chart a migration path with business and implementation plans.

L.E.K. ConsultingApproach L.E.K. gears its consulting approach towards helping companies manage their businesses in a fashion that maximizes their

combined value. The firm’s approach further embodies two points of view. One is that developing good strategies requires deep analytical insights on markets, customers, and sector trends. The other is that realizing the potential of good strategies depends on companies making aligned and holistic choices and then effecting change across their organizations.

Practice Structure

L.E.K. concentrates its resources in its strategy consulting practice and goes to market through select industry practices.


L.E.K. offers a focused corporate strategy service alongside related services for business unit strategy, growth, new product development, and shareholder value management. The core of L.E.K.’s service delivery is its “strategy cascade” framework designed to help clients align on a set of choices that starts with the strategic aspiration in terms of goals and associated portfolio priorities and proceeds to the strategic solution, including commercialization, organization, and performance management. L.E.K. organizes its service delivery around this framework, alternatively taking into scope the entire cascade or specific components, depending on a client’s needs. These typically cluster in three areas: conceiving of new offerings with associated capabilities, optimizing the organization for efficiency and effectiveness, and transforming the organization to be more customer-centric.




Buyer Ratings Guide

Provider Briefs

ContendersMarakonApproach Marakon’s consulting approach reflects its point of view that the fundamental determinant of good strategy is the ability to generate and

capture economic value. For this, Marakon believes companies need first and foremost a clear understanding of how each part of their organization contributes to economic value creation. In addition, the firm places great stock in the management system a company uses to evaluate its portfolio and execute strategic moves to optimize it.

Practice Structure

Marakon, the strategy advisory arm of Charles River Associates, concentrates its resources in its strategy advisory practice.


At the heart of Marakon’s service delivery model is the use of capital market-based valuation tools to measure the value creation potential of different strategies and operating models based on the information capital markets provide about the future outlook of a sector, the intensity of competition, regulatory changes, and market economics. Next, the firm works with clients to articulate a vision for their companies over a five to ten-year period and then devise an implementation plan. Cutting across Marakon’s service delivery is a ruthlessness with respect to making concrete a company’s sources of sustainable value creation and a conviction that the transition process is as important as the actual target in terms of outcomes achieved.

PA ConsultingApproach PA targets its consulting approach at companies’ portfolios of growth and transformative initiatives, typically in the context of a

strategic shift away from a transactional to a customer experience-based value proposition. For this, PA believes effective strategies need to possess three attributes. One is alignment with unmet customer needs. Another is pragmatism in terms of strategies that are executable, which depends on fit with a company’s operational capabilities and internal alignment across the organization. The last is an eye for technology innovation and the ways in which new technologies furnish companies with new strategic opportunities.

Practice Structure

PA delivers its offering through its strategy consulting practice, which aligns closely with its program and portfolio management practice and also houses its corporate finance resources.


The firm kicks off its service delivery by gathering customer and technology insights to identify differentiated value propositions and customer experiences. The firm’s pragmatism and technology development heritage manifests in a commitment to testing ideas in the real world through customer research and piloting and strong doses of launch management and commercialization methodologies. PA also offers a targeted service for project portfolio optimization within program management functions.

Roland BergerApproach Roland Berger’s consulting approach aims to maximize value across the corporate portfolio, balancing growth and efficiency, in a

way that is robust and responsive to an uncertain and volatile market environment. For this, the firm’s approach brings together two strains of thinking. One on “light footprint” management counsels highly responsive strategies grounded in a long-term outlook and executed through a well-structured process. The other, emanating from a research effort focused on the role of the corporate headquarters, emphasizes the importance of understanding a company’s ownership advantage and the parenting strategy suited to different portfolio components.

Practice Structure

Roland Berger organizes its resources through its strategy practice, which works closely with its restructuring and transformation resources. The firm goes to market through its industry practices.


Roland Berger’s core offering starts with portfolio segmentation and an assessment of cross-portfolio synergies. In parallel, the firm evaluates the ownership advantages and role of the center with respect to different portfolio components. Roland Berger is a co-founder with the HHL Leipzig Graduate School of Management of the Center for Strategy and Scenario Planning. Through this collaboration Roland Berger uses scenario methods to help its clients understand the critical variables that impact their strategies and the potential ways in which those impacts may occur. The firm’s corporate headquarters resources also contribute a benchmarking tool to evaluate the performance of a company’s corporate headquarters against core functions and value-adding capabilities.




Buyer Ratings Guide

Provider Briefs

ContendersStrategic Decisions GroupApproach SDG’s consulting approach is an outgrowth of its point of view on what it terms “decision quality”: a rational framework for

decision-making designed to systematically engage the right people with the right, fact-based methods to drive both the accuracy of decisions and organizational alignment on them. With respect to portfolio strategy, SDG’s objective is to help companies put in place systems for determining where and how much to invest amidst uncertain market conditions.

Practice Structure

Strategic Decisions Group (SDG), established in 1981, positions itself as a decision quality service provider. The firm is based in San Francisco and operates five additional offices in Asia, Europe, and Canada.


SDG splits its offerings between consulting and training services. With respect to the latter, the firm recently launched a collaboration with the executive eduction arm of the Wharton School at the University of Pennsylvania to deliver a strategic decision and risk management certificate program. SDG also operates an alliance with Powernoodle, a provider of cloud-based decision tools. SDG offers a targeted portfolio strategy consulting service that combines economic and risk analytics to construct a portfolio valuation model for allocating resources at the efficient risk-return frontier.



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Portfolio & Capital Strategy Consulting is part of

Enterprise strategy consulting services directed at

clients’ corporate office activities. Its objective is to

help companies set the policy guardrails that direct the

investments and activities of their organizations.

Enterprise strategy consulting includes four services.

■ Business strategy and planning: establishes

companies’ fundamental value proposition in terms

of where to play and how to win.

■ Portfolio and capital strategy: addresses the

allocation and steering of company resources to

deliver its value proposition.

■ Strategic risk: identifies and manages risks that

could prevent the fulfillment of a company’s value

proposition.

■ Cybersecurity: identifies and manages the portion of

strategic risks associated with digitization, including

threats to information assets, infrastructure, and

applications.

DefinitionsWhat is Portfolio & Capital Strategy Consulting?


Buyer Ratings GuideEY - AUTHORIZED USERS ONLY


Buyer Ratings Guide

DefinitionsConsulting Provider Capabilities

Capability Areas Capabilities Descriptions

Discovery

Needs Assessment

How does the consultant establish goals and objectives for the project and determine which stakeholders need to be involved from the client organization, consultant, and third parties?


How do consultants’ knowledge and experience inform diagnostics through benchmarking and trend analysis?

Internal Client Insight

How does the consultant obtain internal client insights through data analysis and interviewing and workshops and incorporate them in diagnostics?

Design

Strategy How does the solution align with the client’s market, customer and product, and functional strategies?

Operating System

How are client information, physical, and people assets and processes configured to generate the value add intended by the strategy?

Management System

How are client resources mobilized, managed, measured, and motivated through governance, incentives, organizational structures, and performance management to execute the strategy?

Delivery

Project Management

How are activities sequenced and resources allocated, aligned, and coordinated to execute and sustain the solution?

Client Capability Development

How are client technical skills developed and mindsets and behaviors adapted to execute and sustain the solution?

Enabling Tools What consultant tools are used for diagnostic and design activities that support the client in executing, sustaining, and refreshing the solution?


Provider Capability Rankings Descriptions Depth: a measurement of a consulting provider’s strength based on its capabilities, including such factors as resources,

proprietary methodologies, and intellectual properties

Breadth: a consulting provider’s ability to deploy its capabilities in multiple client scenarios across industry sectors, geographic

regions, and interfaces with adjacent functional and technical capabilities

Client impact: a consulting provider’s capacity to get results for clients based on the combination of its capability depth and

breadth adjusted by the degree of engagement model complexity incurred by its breadth across industry sectors, geographic

regions, and interfaces with adjacent functional and technical capabilities


MethodologyOverview

ALM Intelligence has been researching the management, financial, and IT consulting industry for over 40 years, studying

the global consulting marketplace at multiple levels. The resulting market analyses help buyers of consulting services to

effectively target best in class providers, and help consulting providers to identify and evaluate business opportunities.

The proprietary research methodology comprises four components:

■ Extensive interviews with consulting practice leaders, financial analysts, consulting clients, and clientside industry experts

■ Data and background material from the proprietary library of research on the consulting industry and individual firms

■ Quantitative data collection from primary and secondary sources

■ Key economic data relevant to the sector(s) being analyzed

The research output for a project is derived predominantly from primary research.

Data is obtained through a centralized effort, with teams of analysts collecting, assessing, fact-checking, and refreshing

baseline information on leading consultancies and consulting markets. This information populates an extensive knowledge

base of consulting providers, widely regarded as among the most comprehensive in the world.

Working collaboratively, analysts narrow their research to the most discrete and pertinent intersection of consulting service/

industry/geography.

The experience and knowledge of the analyst team are critical to the success of these research endeavors. Directors and

associate directors average over a decade of consulting and/or analyst experience, with an emphasis on professional services.

Junior analysts typically bring an average of five years of consulting and/or analyst experience.

The group’s long-term relationships with consulting clients and industry leaders are based on trust and respect. ALM

Intelligence’s fundamental goal is to deliver objective assessments and insightful viewpoints on the management, financial,

and IT consulting market.



MethodologyHow We Evaluate Consulting Providers

ALM Intelligence’s goal is to deliver objective assessments

to help buyers of consulting services effectively identify and

maximize the benefits of working with best in class providers.

ALM Intelligence evaluates consulting providers with respect

to a particular consulting area in terms of the following

baseline criteria. The general criteria below are refined and

customized over the course of the research effort based on

input from clients and providers:

■ Consulting approach: What are providers’ points of

view on the root causes of client challenges? How do

those points of view inform choices about how best to

resolve them? How do providers view the intersection of

these needs and solutions with other consulting or non-

consulting offerings or cross-cutting themes?

■ Consulting organization: How do providers organize

and deploy their capabilities? What sort of consultants

and other human resources do they possess, and how do

they obtain and use them? What sorts of partnerships, collaborations, and alliances with external parties do they use to

bolster their capabilities?

■ Consulting service delivery model: How do providers deliver their services? Do they employ any particular processes or

methodologies, preconfigured tools, or other unique elements of service delivery? Do they follow any particular sequence

or direction in their service delivery? How do they measure outcomes?

■ Client pain points and needs assessments: What factors most influence successful engagements in the opinion

of clients? What capabilities do providers need to bring to their engagements to be compelling? What sources of

differentiation matter most to consulting buyers?

■ Future development: What investments are providers making or planning to make to enhance their future capabilities?

In addition to briefings with consulting buyers and providers, ALM Intelligence uses a mosaic approach to derive its findings.

This incorporates primary research conducted with industry practitioners, academics, and other experts and secondary

research on providers’ public information and other third-party sources of data and analysis.

Depth Breadth

AdjacenciesDelivery

Design

Discovery Geographies

Industries

Resources

Service Delivery

Strategy

OperatingModel





Buyer Ratings Guide

About ALM Intelligence

ALM Intelligence provides accurate and reliable market sizing and forecasts on consulting services worldwide, needs-analysis

and vendor profiling for buyers of consulting services, timely and insightful intelligence on the top consulting firms in their

respective markets, and operational benchmarks that measure consulting performance. ALM Intelligence’s research spans

multiple service areas, client vertical industries, and geographies. Our analysts provide expert commentary at consulting

industry events worldwide, and offer custom research for Management Consulting and IT Services firms. More information

about ALM Intelligence is available at www.alm.com/intelligence/industries-we-serve/consulting-industry/.

ALM, an information and intelligence company, provides customers with critical news, data, analysis, marketing solutions and

events to successfully manage the business of business. For further information and to purchase ALM Intelligence research,

contact [email protected], 855-808-4550.



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Documents

The ALM Vanguard - EY · The end game is a more digestible change program governed by a system that calibrates the level of measurement precision to the level of uncertainty surrounding