deloitte_vol2_article3
DESCRIPTION
DeloitteTRANSCRIPT
Market Share Analysis: Top 10 Consulting Providers’ Revenue, Growth and Market Share, Worldwide and Regional, 2009
Gartner Dataquest Research Note G00200370, Michael von Uechtritz, 30 April 2010, V2 RA3 05072011
This report is intended as a tool for service providers conducting a market scan of the top worldwide and regional consulting service providers and their performance. In 2009, all providers were challenged by shrinking consulting service markets. We examine and analyze the top 10 consulting service providers’ performance in revenue, growth and market share, both worldwide and regionally: North America, Europe, Asia/Pacific and Japan.
Key Findings
• Theconsultingmarketdeclined9%.Sixofthetop10worldwideserviceprovidersperformedbetterthannegative9%in2009.Ofall280consultingserviceproviderscoveredin“ITServicesMarketMetricsWorldwideMarketShare:Database,”138outperformed(betterthannegative9%)theglobalmarket,ofwhich60providershadpositiverevenuegrowth.
• Someproviderswereabletocapitalizefromeconomiesalreadyrecoveringinlate2009andincreasetheirconsultingservicemarketsharebyselectivelyco-investingwithbuyersforinnovativeandgrowth-focusedprojects,orbytakingadvantageofinvestmentsbypublic-sectorclients,representing21%,or$15billion,oftheworldwideconsultingmarket.
• In2009,business-outcome-focusedprovidersofconsultingserviceswithestablishedbusinessrelationshipswereoftensuccessfulingrowingtheirmarketsharebetterthanthemarketaverage.Supplierswithabroadrangeofadvisoryserviceswereattractivetobuyers,forexample,iftheycouldprovideassistanceinmitigatingfinancialrisksofanunderperformingcomplexbusinessoperation.
• Manyconsultingserviceprovidersfacedchallenging2009marketconditions.ThosewithattributessuchasapureITfocus,internalinfluencesfromotheroutsourcing,softwareortechnologybusinesses,anunbalancedgeographicalrevenuesplit,orhugedependenciesonclientsinasingleverticalmarketoftenunderperformedthemarketaveragerevenuegrowthrate.Fourofthe10largestproviders(IBM,Accenture,HPandCapgemini)and141ofall280providerscoveredinthemarketsharedatabaseunderperformedtheworldwideconsultingmarketgrowthrateaverageofnegative9%.
2• Providerswerehardesthitin2009byadeclineof14.9%in
Europe.Consultingservicemarketshareconcentrationofthe10largestprovidersinEuropeincreasedfrom35.9%in2008to36.8%for2009,or0.9%.For2010,intheEuropeanregion,furtherbrandandclientacquisitionsareexpectedtoresultingrowingmarketshareconcentrationamongthetop10providers.
Recommendations
• AsabusinessandITconsultingservicebusinessleader,increaseyour2010marketsharebydemonstratingtopotentialbuyershowtheadviceyousellwillassistthemnotonlyinmitigatingtheirfinancialandbusinessrisks,butalsoincopingwitheconomicuncertainties.Forexample,committoeconomicbenefitsforbuyersfrombusinessprocessimprovementprojectsinthesupplychain.
• ITconsultingserviceprovidersshouldreducetimespentnegotiatingwithbuyersforanother(small)fixed-priceproject.Instead,considergrowingyourmarketsharebyinvestinginthedevelopmentofdifferentiatingconsultingserviceofferingstowinclients,oraddnewtalentstoyourconsultantbaseinaglobalmarketof$73billionthatisforecasttogrow6.2%in2010comparedwith2009.
• Constantlyassessyourorganization’sbusinessperformance,inparticular,asalocalproviderofconsultingservices.Learnfrom2009successesandfailures.Blocksufficienttimein2010withyourkeyexecutivesandadvisorstoidentifywhatneedstochangeinyourconsultingbusinessstrategy.Forexample,foryourpotentialandtargetedclientsegments,assesswhethertheserviceoffering(portfolio)addressespeople,process,technologyandbusinessriskrequirements,andforeachelement,includeaclearvaluepromiserelatedtothefinancialbusinessoutcome.
ANALYSISConsultingservicebusinessleadersdidnothaveasinglemonthof“businessasusual”in2009.Andmanyconsultingpracticeleaders,partnersorsalesandmarketingexecutiveswelcomedthebeginningoftheglobaleconomicrecoveryduringthelaterpartof2009withasighofrelief.
Manyglobalandregionalconsultingservicebuyersdelayedorfrozetheirinvestmentsinprojects,reducedtheirnumberofpreferredsuppliersandincreasedthepressureonconsultingratecards.Therefore,in2009,allsuppliersfacedunfavorablebusinessconditions.Providers’keybusinessperformanceindicators—suchasbacklogforordersandrevenue,timefrombidtoprojectdelivery,clientattrition,consultantutilization,forecastaccuracy,projectprofitandmargin,projectfunnelandprojectsize,sales
forceefficiency—wereimpacted.Businesseroded,andmanyconsultancyfirmswereforcedtotakedrasticmeasuresinresponsetochallenging2009marketconditions.Actionsweobservedincluded:
• Biddingforsmallerprojects
• Cuttingoverheadcost
• Rebalancingprojecttasksacrossaglobalworkforce
• Reducingtheconsultantbasewithvoluntaryorforcedleaves
Theseactionsandotherstepstakenbyprovidersresultedintheiroverall2009marketshareperformance.The2009marketsawahighermarketshareaccumulationofthe10largestproviders,withsomeproviderslosingtheir2008positioninthetop10listordisappearingfromaregionalmarket.Evensomeestablishedprovidersunderperformedintheirrevenuegrowthanddeliveredresultsbelowtheglobalmarketaverageofnegative9%in2009.
Examiningandanalyzinganyprovider’sperformance(e.g.,consultingservicerevenue,growthormarketshare)thatishighlightedinthisdocumentshouldalsobereadintheeconomicalcontextof2009.Theglobaleconomydeclined2.2%in2009,measuredinrealgrossdomesticproduct(GDP)growthcomparedwith2008,asestimatedbytheWorldBankinJanuary2010.
1.0 Consulting Market ContextSomecontextisimportanttounderstandthedynamicsofconsultingservices.InGartner’sforecastandmarketdefinition,consultingservicesisanofferingofprofessionalservicesandincludestwosubsegment(businessandITconsulting)forecasts.Wedonotfurthersegmentthemarketshare.
Theconsultingservicemarketfacedadramaticglobaleconomicslowingin2009.Despiteafinanciallychallengingyear,sixoftheworld’slargestconsultingserviceprovidersthatGartnercoversinitsmarketshareanalysismanagedtoperformbetterthanthemarketaverageofnegative9%in2009.Whyhavesomeconsultingserviceprovidersbeenmoreresilientinthisdramaticglobaleconomiccycle?Gartnernotesthefollowingobservations:
• Indifficultanduncertaintimessuchasin2009,buyersprefertoworkwithestablishedproviderstoattainadvicetheyneed.Consultingisrelativelyimmunefromtheeconomiceffects,eveninagloballycontractingmarket.Businessadvisoryserviceprovidersweresomewhatmoreresilientiftheyhadanestablishedrelationshipandcoulddemonstratetheirbusinessvalue-addtoclients.
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3• Operatingcomplexityfororganizationshasincreasedthe
demandforadvice.Enterprisesareconfrontedwithmyriad—andoftentimes—uncertainlegal,regulatory,financial,riskmanagementandoperatingconditionsasaconsequenceofthefinancialcrisisin2008andcontinuedeconomicuncertainties.Potentialbuyersofconsultingservicesoftendonothavesufficientin-houseexpertisetoaddresstheseissuescompletely.Itisthereforenosurprisethatsomeoftheconsultingservicefirmsthatspecializeinaddressingcomplexbusinessconditionswereaskedtoassisttheirclientsintheplanningof,forexample,therestructuringofabusinessoperation,andtheysawanincreaseindemandfortheadvicetheycanprovide.
• IncreaseofopportunitiesinarapidlyrecoveringemergingconsultingmarkethelpedtooffsetuncertainorunfavorableeconomicconditionsforsomeprovidersintheUnitedStatesandpartsofWesternEuropeasearlyasthesecondhalfof2009.Wenotethatproviderswithaglobal,virtualworkforcecanbetterbalancedemandsintermsoftheircapacitiesandstaff.Theseproviderscandeliverprojectswithouterodingprofits,whilereactingtopressuresonconsultingratecardsbybuyers.
2.0 Market Share PerformanceManyproviderstookmeasurestosurviveandbe“sheltered”fromfinancialdistress,andoverall,theconsultingindustryresistedgreaterdamagesthatwereexpectedfromasevereeconomicdownturn.BearingPoint,forexample,filedforChapter11bankruptcyinFebruary2009foritsU.S.operations.However,ofallthe280providerscoveredin“ITServicesMarketMetricsWorldwideMarketShare:Database,”60providersexperiencedpositiverevenuegrowth.Thisevidenceofresiliencefortheadvisoryindustryisinteresting,becauseadvisoryservicesaretypicallyconsideredbymanyasthefirstand/orworst-affectedbusinessserviceswhenspendingorcapitalcontracts.
Thus,theleadersinthissegmenthaveevolvedovertimethroughsignificantinvestmentsinmethods,physicalinfrastructure,laborpools,andexpansionoftheirclientbaseandpipelines.Organicgrowthalsohasbeensupplementedwithacquisitions;andwhenanacquisitionofscaleoccurs,theimpactcanbenoteworthy.Morevariabilityingrowthandrevenueperformancehascausedmorefluctuationinmarketsharegains/losses.Inaconstantlychangingcompetitivelandscape,wefoundattributesofsuccessfulprovidersintheconsultingmarkettoinclude:
• Scale—GlobalbusinessandITconsultingserviceprovidershavescaleintheiroperationstodelivertheiradviceacrossseveralgeographicalregionsanddomains.
• Scope—Advisorsoperatinginitiativesforbuyersonaglobalscalehavetheabilitytoofferabroadarrayofconsultingservicesaddressingtheseinitiatives;broadscopeintheadviceofferediscriticallyimportant.
• Skills—Consultanciesneedtherightmixofskills,suchasformulticulturalandmultidomainchangemanagement,whileatthesametimeofferingadeepbusinessprocessunderstandingforalargenumberofindustries.
• Stability—AsolidbalancesheetandfinancialstabilityofthebusinessandITconsultingserviceproviderarecriticalbecausebuyingorganizationsmustmitigatetheriskoffailingtocompleteaprojectorinitiative(forexample,amajortransformational18-month-longglobalfinancefunctionproject).
• Strategy—Consultingserviceproviderscontinuallyevolvetheirbusinessstrategythroughreorganizing,“reskilling”oftheirresourcesandredefiningserviceoutcome.
Thetop10listsforeachregionandtheoverallworldwidemarketsharedidvary—butnottoasignificantextent.Manyproviderswereabletoholdontotheirpositions.However,somecompetitorsstartedtoclosethemarketshareandrevenuegaps—throughacquisitionsandorganicgrowth,aswellasbyobservingwhathasenabledthetopproviderstobothexpandtheirportfolioofconsultingservicesandholdontotheirstrongplacesinthemarket,despitethechallengesallprovidersfacedin2009.
2010willbecritical;thereturntorevenuegrowthwillbeimperativeforconsultanciesofallsizes;thosethatdonotkeeppacewiththegrowthoftheconsultingservicemarket,whichispredictedtoreboundin2010,willbepossibletargetsforacquisitionbythestrongerproviders.Acquisitionscanpotentiallyhaveamaterialimpactonthemarketsharerankings.
3.0 Methodology and Market Share DatabaseGartner’s“ITServicesMarketMetricsWorldwideMarketShare:Database”providesvendorrevenue,marketshareandend-usermarketsizeforITservicesbyregionandcountry.Consultingservicesaresegmentedbycomputingandcommunicationsplatformsandbyverticalmarket.Thesestatisticshavebeendevelopedusingsecondaryresearchandmodelingtoprovidetimelyestimatesofprior-yearresults.Marketsharestatisticsreflectsecondaryandprimaryresearch,includinginputfromparticipatingvendors.See“DataquestGuide:ITServicesMarketResearchMethodologyandDefinitions”forfurtherdetailonourmethodologiesanddefinitionsforITservicesandwhichcountries/regionsandverticalsarecoveredbythedatabase.
4.0 Worldwide: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2009Worldwidebusinessconditionsof2009havechangedtheconsultingmarketlandscapebecausemoremarketsharewasabsorbedbythe10largestproviders,reducingthecombinedshareofallotherprovidersby0.7%,or$491million.Theincreaseof0.7%,from33.4%in2008to34.1%in2009,isexplainedbythefactthatsomesmallerproviderslosttheirrevenuetosomeoftheirlargercompetitors.
Sixoutperformersexceededtheworldwidemarketaverageofnegative9%in2009andareinthetop10list(seeTable1):Deloitte,PricewaterhouseCoopers(PwC),Ernst&Young,KPMGInternational,CSCandFujitsu.Further,ofthe280globalprovidersthatGartnertrackedconsultingservicerevenuefor,138exceededthenegative9%growthratein2009,and60globalprovidershadapositivegrowthrate(morethan0%)intheirconsultingservicerevenue,despitethechallengingyear.
4Acquisitionsconstantlychangetheconsultingserviceprovider’slandscapeandimpactthegrowthratesinorganically.Attributesofprovidersinregardtotheirglobalscale,potentialfornewprojectscope,overallrevenuesize,consultantskillandtalentbaseareanexpressionoftheirconsultingbusinessstrategy.Amongthemanyacquisitionsin2009,thesaleofBearingPointtoCSC,Deloitte,Keane,PwCandotherproviderswasamajoreventandisreflectedinthisworldwidelistandtheregionaloneswhereapplicable.
Smallersuppliersofadvisoryserviceswerechallengedintheiraimtoachieveabalanceintheir2009revenueacrossseveralgeographicalmarketsandtherebyreducetherevenueimpactofasinglegeographicalmarketontheirglobalbusinessperformance.Longexistingbusinessrelationshipsbetweenbuyersandtheirpreferredconsultingserviceproviderrepresentahurdleforthesesmallercompetitorstryingtoexpandintonewaccountsortakingmarketshareinapreviouslyunaddressedverticalsector.
Membersoftheglobaltop10listtradedplaces,butthepositionsofthesevenlargestplayersdidnotchangefrom2008.In2009,Fujitsuclimbedtotheeighthposition,andHPclimbedtotheninthposition,whileCapgeminidroppedtwoplaces—tothe10thposition—intermsofglobalconsultingservicemarketshare.Overall,therewaslittlechangeinthegroupofthetop10providernameslistedinTable1,whichremainedthesameforallproviders,comparedwith2008.Webelievethattheconsistentpresenceoftheproviders,suchasKPMG,signalsthestrongeraffinityofIT-consulting-ledprojectstowardfinancialadvicerequired.Some
buyershavebusinessrequirementstomitigatepeople,process,technologyand,increasingly,financialrisksandmust(often)continuetoimprovecertainbusinessprocessestocutenterprisecosts.
The2009top10marketsharedatashowsthe10largestglobalsuppliersofconsultingservices(seeTable1).
Sixofthe10providersoutperformedthemarketaverageofnegative9%in2009.Attributesofthesixoutperformersinclude:
• Deloitte,Ernst&Young,KPMGandPricewaterhouseCooperscombinedrepresentthegroupofthe“BigFour.”Their2009marketshareresultsconfirmour2008marketshareassessmentthattheBigFourwillincreasetheirrelevancetobuyers.Commonattributesofthesebusinessconsultingserviceprovidersareasfollows:
• Globalscale
• Presenceinmorethan100countries
• Broadscopeoftheadvisoryservicestheycanprovide—fromaccounting,auditing,assurance,businessandtaxtotransactionadvisoryservices
Source:Gartner(April2010)
Table 1. Worldwide: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2008-2009 (Millions of Dollars)
Vendor
Deloitte
IBM
PricewaterhouseCoopers
Accenture
Ernst&Young
CSC
KPMGInternational
Fujitsu
HP
Capgemini
OtherServiceVendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
4,385
4,353
3,316
3,074
2,348
1,926
1,735
1,561
1,536
1,566
51,303
77,103
2009
4,354
3,958
3,225
2,590
2,327
1,769
1,689
1,473
1,313
1,291
46,147
70,136
Growth (%) 2008-2009
0.7
9.1
2.8
15.7
0.9
8.2
2.7
5.7
14.5
17.6
10.0
9.0
Market Share (%) 2009
6.2
5.6
4.6
3.7
3.3
2.5
2.4
2.1
1.9
1.8
65.9
100.0
5• Exceeding100,000employeesinconsultingoverall
• Broadskillbase
• SizeintermsoftheirrevenueinthebusinessandITconsultingmarketandothermarkets.
• Overall,theBigFourgroupcopedrelativelywellwiththedynamicsoftheglobalconsultingmarket.Thehistoricalclosealignmentoftheirconsultingbusinesswiththebuyingorganizations’CFOcommunitywasattributedtotheseproviders’auditingandaccountingbusinesses.Sincethefinancialcrisisin2008,CFOsareconsiderablymoreinfluentialtotheCIOandoverallforthebusinessandITconsultinginvestmentsofanorganization,comparedwithprecrisisyears.Further,weobservedinourdialoguewithGartnerclientsthroughinquiriesthatadviceoftheBigFourisfrequentlyconsideredobjectivebytheirpotentialservicebuyers.Thisisbecausetheseprovidersare,toacertaindegree,notinfluencedbytheirotherbusinesses,suchastheneedtopushforrevenueforIToutsourcingwithamajorsoftwareorlargehardwareinternalbusinessunit/division,throughadvicetheysellanddeliver.
• Fujitsu,withnegative5.7%,andCSC,withnegative8.2%,outperformedthemarketaverageofnegative9%.
• Fujitsudeclinedlessthan9%initslocalandregionalgovernment,transportationandhealthcarebusiness.FujitsushowedpositiverevenuegrowthforitsbusinessandITconsultingrevenueinitsservices,wholesaleandtrade,andagriculture,miningandconstructionverticals.
• CSC’sresultswerepositivelyimpactedbyitsconsultingbusinessinthegovernmentvertical,fromwhichCSCderived$866million(of$1,769million)in2009and$884millionin2008,a2%declinecomparedwith2008.CSCexploiteditsconsultativecapabilities,creatingandidentifyingIToutsourcing(ITO)opportunities,aswellasleveragingintoandthroughthetransition(earlylifesupportteam).
Attributesofthefourunderperformers,whichalldeclinedinrevenuebymorethan9%in2009,include:
• Thesefourlargeconsultingserviceproviders—IBM,Accenture,HPandCapgemini—havealargeportionoftheirtotalITservicesrevenuecomingfromacompanystrategyofpositioning,oftensellingtheiroutsourcingoperations,inadditiontotheirconsultingservices,tobuyers,aswellasbundlingconsultingintoanapplicationdevelopmentcontract.Further,providerssuchasIBMandHPhaveothersoftwareandhardwarebusinessestosupport/prioritizewiththeirconsultingbusiness.
• Someproviders’revenueand,therefore,marketshareresultsaregeographicallylessbalancedbecausetheprovidersarehighlydependentonasinglecountry,andwebelievethissituationcontributedtoCapgemini’sunderperformanceofnegative17.6%in2009.Capgeminicollected$1,005million,or77.9%ofitsglobal$1,291millioninconsultingrevenue,fromWesternEurope.TheAsia/Pacificregion,a$7,187millionmarketin2009,contributed4.5%ofCapgemini’sgrowth,or$32million,butata(low)weightof2.5%initsglobalconsultingservicerevenue.
5.0 Regional Analysis: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2009Whenreviewingproviderperformanceineachregion(worldwide,NorthAmerica,Europe,Asia/PacificandJapan),wefoundnoticeabledifferences,andtheyareasfollows:
• Japanshowedthehighestconcentrationofmarketshare(68.1%)forthetop10providersamongallfiveregions.Theworldwideconcentrationoftop10marketsharewas34.1%in2009(asshowninTable1).
• NoproviderintheworldwideandEuropeantop10listsachievedflat(0.0%)orpositiverevenuegrowthin2009.Incontrast,fiveprovidersoperatingintheJapanesemarketgrewtheirconsultingservicerevenue,therebyoutperformingtheirglobalmarketpeers.Themarketshareholdbylocalcompetitorsineachregiondemonstratesthattheabilitytodeliveradvisoryserviceslocallyorregionallyremainsakeyrequirementforsomeendusers.
• IBMhasauniquepresence:Itislistedamongthe10largestconsultingserviceprovidersinallfivegeographicalregionscoveredinthisreport.
• Otherproviderspopulatethetop10listsinmultipleregions,anddomesticprovidersappearonregionallists:Forexample,SAICappearsinNorthAmerica’slist,LogicaappearsinEurope’slist,SamsungSDSappearsinAsia/Pacific’slist,andNECappearsinJapan’slist.Clearly,competitivedifferentiationversusagroupofpeersrequiresallproviderstotakeintoaccountthespecificregionalorcountrymixofcompetitioninthesemarkets.
• Theunweightedaveragerevenuedecline(inU.S.dollars)forthetop10providersperregionvariessignificantly,anditisaslowasnegative2.3%forAsia/Pacificandisashighasnegative12.4%inEurope.Asia/Pacific’slowerdeclineinrevenueforthetop10indicatesthatsmallermarketsrecoverfasterfromaneconomiccrisis,andtherefore,somerapidlyrecoveringeconomiesoffera2010revenueopportunityforproviderstoeventuallyrebalancetheirtotalconsultingservicerevenuesplitquickly.Forexample,theAsia/Pacificregionisforecasttogrow17.1%in2010initsconsultingservicemarketcomparedwith2009,representingan$8.5billionmarket.
65.1 North America: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2009InGartner’sanalysis,wedefineNorthAmericaasbeingcomposedofCanadaandtheUnitedStates.NorthAmerica’sbusinessconditionsof2009changedthemarketlandscape,evidencedby0.7%moremarketshareaccumulatedbythetop10,increasingfrom39.7%in2008to40.4%.Theincreaseof0.7%,or$195million,representstheabsorptionofafictiveproviderholdinga27thmarketsharepositioninthisgeographicalmarket.
SixprovidersexceededtheNorthAmericanmarketaverageofnegative6.1%in2009:Deloitte,PricewaterhouseCoopers,SAIC,NorthropGrumman,Ernst&Young,andKPMGInternational(seeTable2).Further,ofthe135providersthatGartnertrackedconsultingservicerevenueforinNorthAmerica,69exceededthenegative6.1%growthin2009,and28providersoperatinginthisgeographicalmarkethadapositivegrowthrateintheirconsultingservicerevenue.
ThebreakupandsaleofBearingPointisreflectedinthistop10listforNorthAmericaandfurtherunderlineschangesatthesupplysideofthelargestregionalconsultingmarketintheworldworth$27.9billionin2009.
Positionsinthetop10listchanged,butitsmembersfortheNorthAmericanregionremainedalmostthesame,comparedwith2008.Inthe2009listofthe10largestconsultingserviceprovidersinNorthAmerica,SAICandNorthropGrummanrepresenttwolargeU.S.-focusedproviders.Forexample,in2009,$1,245millionof
SAIC’s$1,250millionconsultingservicerevenueinNorthAmericawasgeneratedintheU.S.and$972millionofNorthropGumman’s$976millionconsultingrevenueintheregionwasgeneratedintheU.S.McKinsey&Co.exitedthelist,andKPMGInternationalenteredthelistandisnowinthe10thpositionforits2009marketshare.
Table2liststhe10largestprovidersofconsultingservicesinNorthAmericain2009.
Sixofthe10providersoutperformedtheNorthAmericanmarketaverageofnegative6.1%in2009.Attributesofthesixoutperformersinclude:
• Consultingserviceproviders—suchasNorthropGrumman,SAICandDeloitte—thatwerepositionedstrongly(ifcomparedbyrevenuegrowthrates)inthe2009NorthAmericanconsultingmarkethavehistoricallyoperatedinthescopeoftheU.S.federalgovernmentsector.Deloitte’s2009marketshareincludestheacquisitionofBearingPoint’spublic-sectorpracticesintheU.S.Thesethreeproviders’performancedemonstratedacompetitiveadvantageintheirverticalbusinessfocusandassistedtheseprovidersinachievingpositiverevenuegrowth.
• WeattributeSAIC’s2009successtotheprovider’sscope,skillsandcompetenciesitcanprovidetonationalsecurity,energyandenvironment,criticalinfrastructure,andhealthbuyersofadvisoryservices.SAIC’sstrategytofocusonthepublicsector
Source:Gartner(April2010)
Table 2. North America: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2008-2009 (Millions of Dollars)
Vendor
Deloitte
PricewaterhouseCoopers
IBM
SAIC
CSC
NorthropGrumman
Ernst&Young
Accenture
Oracle
KPMGInternational
OtherServiceVendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
2,406
1,445
1,465
1,193
1,271
926
870
970
656
554
17,944
29,700
2009
2,419
1,432
1,311
1,250
1,179
976
843
797
534
528
16,616
27,886
Growth (%) 2008-2009
0.6
0.9
10.5
4.8
7.2
5.4
3.0
17.9
18.6
4.8
7.4
6.1
Market Share (%) 2009
8.7
5.1
4.7
4.5
4.2
3.5
3.0
2.9
1.9
1.9
59.6
100.0
7forthisalmost-U.S.-onlyprovider(intermsofbusinessandITconsultingservicerevenue)haspaidoff,asevidencedbyitsbetter-than-market-averageresults.2009wasarecordyearfortheprovider,anditsoverallbusinessexceeded$10billion,anditreported27dealsvaluedat$100millionorgreater,comparedwith17in2008.In2009,SAICacquiredSMConsulting(SMC)andIconSystems(Icon).SMCprovidesservicesinlanguage,intelligence,IT,managementconsulting,businessprocessoutsourcing,training,andlogisticstofederal,stateandlocalgovernments,andprivateindustry.
• Competitivemoves(thatis,acquisitions)helpedPwCtoexpanditsconsultingbusinessandstrengthenitsconsultingskillsintechnologyandtransformation,includingstrategy,operationsandsustainability.ItsacquisitionsofAlarisConsulting,NewDimensionSolutions,Entology,BusinessMinds,ECSLtd.andSustainableFinance,aswellasportionsofBearingPointNorthAmerica’scommercialbusiness,impacteditsresult.
• PwCwasoneoftwoBigFourfirms(Ernst&Youngwastheother)tosupporttheU.S.governmentinitsbailoutofbankinginstitutionsundertheTroubledAssetReliefProgram(TARP).Overall,PwC’sbusinessandITconsultingrevenuedeclined0.9%in2009comparedwith2008.
• Ernst&Youngappearstobegrowingitstechnologyadvisorycompetenciesorganically,althoughthefirmacquiredtheSAP-focusedpracticeofEnteGreatinApril2009,andCapitalCityTechnologies,asmallmanagementandtechnologyconsultingfirmservingthegovernmentsector,in2009.Ernst&YoungadvisedtheFederalReserveBankofNewYorkonthedismantlingofAmericanInternationalGroup(AIG).Overall,Ernst&YoungbenefitedfromitsincreasedfocusonthealignmentofbusinessandIT.IntermsofErnst&Young’sconsultingservicerevenue(inparticular,businessconsulting),Ernst&Youngbenefitedfromsomebuyers—beyondtheCFOcommunity—showinganinterestinmaturingsolutions,suchasanalyticsandbusinessintelligence,toenhancethefinancialtransparencyoftheirorganizations.
Oraclehadthehighestdecline(atnegative18.6),followedbyAccenture(negative17.9%),IBM(negative10.5%)andCSC(negative7.2%)intheNorthAmericanmarket.Thesefourprovidersinthistop10listunderperformedthemarketaverageofnegative6.1%,andtheirattributesinclude:
• Oraclehasnotfullymaterializedonallconsultingserviceopportunitiesinsomeoftheverticalsectors,suchasinthegovernmentalsector,whichisarevenuestreamthatsomeoftheotherprovidersoperatinginthisregionhavetakenbenefitof.Oracleexperiencedastrongdeclineof20.9%initsconsultingrevenuefor2009inthemanufacturing(discreteandprocessmanufacturing)verticalsectors,whichcontributedtoitsbelow-market-averageperformance.
• Withrevenueof$797millionin2009,Accenturedeclined17.9%fromitsprevious-yearestimatedrevenuebaseof$970million.Accenture’sproject-basedservicesincludebusinessconsultingandITconsulting,andthestaffingisusually
organizedtoconductaconceptualanddetaileddesign,whichisusuallyexecutedbyabusinessconsultingteam(forprocessdesign,workflowsandbusinesscase)andITconsultingresources(forthetechnicalarchitecture,detaileddesignandconfiguration).OtheradvisorsthatAccenturecompeteswithinNorthAmericaselltheirownservices,similartothoseofferedbyAccenture,andin2009,competitivepricepressuresandthelackofconstantlyreaching(new)buyingcenters,suchastheCEOorCFOofanorganization,mayhaveimpacteditsperformance.
• IBM(withnegative10.5%)andCSC(withnegative7.2%)werealsochallengedtocopewithadifficultyearandunderperformedthe2009marketaveragerevenuedeclineof6.1%intheregion.Webelievethatinternalinfluencesandobligationstootherbusinesses,suchasoutsourcing,softwareandtechnology,influencedtheirmarketperformanceinbusinessandITconsulting.
5.2 Europe: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2009InGartner’sanalysis,wedefineEuropeasbeingcomposedofEasternandWesternEurope.AmajorcomponentoftheEuropeanmarketisWesternEurope,oneofthemost-matureconsultingmarkets.Thus,inmarketshare,weseeacombinationoflocal,globalandEurope-basedprovidersdominatingtheleadershippositionsduetotheirpositioninWesternEurope.
DuetoachallengingEuropeanconsultingservicemarket,asorganizationsslowedspendingonprojects,changestothecompetitivelandscapewerealmostnatural.Thetop10playersaccruedanadditional0.9%ofmarketshare,growingto36.9%,representinga$228millionincreasecumulativelyortheabsorptionofafictiveproviderholdinga21stmarketshareposition.
Fiveproviderswithinthetop10exceededand,thereby,outperformedtheEuropeanmarketaverageofnegative14.9%in2009:Deloitte,PricewaterhouseCoopers,Ernst&Young,KPMGInternationalandFujitsu(seeTable3).Further,ofthe186providersthatGartnertrackedconsultingservicerevenueforinEurope,atotalof102exceededthenegative14.9%averagein2009,and18providersoperatinginthisgeographicalmarkethadapositivegrowthrateintheirconsultingservicerevenue.
Driversforlocalmarketdynamicsintheregionarefoundinthedifferenteconomicconditionsunderwhichproviderswerecompeting,includingthemanyvaryinglocallegalandregulatoryrequirementsanddifferencesinbusinessculturethatimpactedhowconsultingproviderscansellanddelivertheiradvicetoEuropeanclients.
In2009,GDPdecreased4.1%intheeuro(currency)areaanddecreased4.2%acrosstheEuropeanUnion’s27memberstates,comparedwiththe0.6%increaseand0.7%increase,respectively,in2008,accordingtoEurostat,thestatisticalofficeoftheEuropeanUnion.TheofficefurtherreportedthatamongEUmemberstatesforwhichseasonallyadjustedGDPdataisavailable,Estonia(with2.5%growth)recordedthehighestgrowthrateinthefourthquarterof2009,comparedwiththepreviousquarter,followedbySlovakia(with2%)andPoland(with1.2%).
8Currencieshadanimpactduetovolatileexchangerates,suchasfortheeuroagainsttheU.S.dollar.Currencyimpactsconstrainedsomeprovidersoperatingatacountryorregionallevel,forexample,iftheyhadnotproperlyhedgedagainstcurrencyfluctuations.Also,someprovidersfacedchallengesfromyearlyunfavorablepredefinedinternalexchangeratesintermsofintracompanycosttransferswhenlendingconsultantsforthedeliveryofglobalprojectsoutsidetheirterritories.WereportedfortheU.K.consultingmarketanegative17.2%performanceinU.S.dollars,negative2.7%performanceinBritishpoundsandnegative12.8%performanceineuros.
PositionsintheEuropeantop10listchangedin2009,buttheprovidersfortheregionremainedthesame,comparedwith2008.Inthis2009listofthe10largestconsultingserviceprovidersinEurope,LogicarepresentsalargeEuropean-focusedproviderforbusinessandITconsultingservices.ThatisbecauseLogica’s$1,083millionofits$1,086millionbusinessisderivedfromitsclientsinWesternEurope,anditsrevenuefromtheU.K.andFrancecombinedis$452million.
The2009top10marketsharedatashowsthe10largestEuropeansuppliersofconsultingservices(seeTable3).
Attributesofthefiveoutperformers(Deloitte,PricewaterhouseCoopers,Ernst&Young,KPMGInternationalandFujitsu),whichallexceededtheEuropeanmarketaverageofnegative14.9%in2009,include:
• TherevenuethattheBigFourderivedfromtheirbusinessconsultingservicescontributedtotheirbetter-than-market-average(negative14.9%)revenuegrowthperformancein2009.Theresultsofthesefourproviderscanbeattributedtothebroadscopeofprojectstheycanaddressandtheavailabilityofconsultantswithskillsandcompetenciesthatwereneededtocopewitheconomicchallengesin2009byclientsinanumberofverticals,suchasfinancialservices,communications,utilitiesorhealthcare.Forexample,forallfourproviders,revenuegrowthinthefinancialservicesverticalexceededthemarketaverageofnegative15.6%in2009inthebusinessandITconsultingservicemarketinEurope,whichshrankfrom$6,542millionin2008to$5,521millionin2009.
• Fujitsuadvisoryserviceattributorsincludedsomecompetenciestoimproveabuyer’sbusinessoperation(operationalexcellence),whichwasacritical2009priorityforCIOs.TheproviderintegrateditstechnologyadvisorycompetenciesorganicallyandrefocusedonsellingitsITconsultingcompetencies.InApril2009,FujitsuacquiredSiemens’50%stakeofFujitsuSiemensComputers(FSC).Asaresultofthereorganizationandacquisition,Fujitsucannowreapthebenefits,anditcannowbroadlypositionitsconsultingservicestoclientsintheregion.
Source:Gartner(April2010)
Table 3. Europe: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2008-2009 (Millions of Dollars)
Vendor
Deloitte
Accenture
Logica
Capgemini
IBM
PricewaterhouseCoopers
Ernst&Young
KPMGInternational
Fujitsu
HP
OtherServiceVendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
1,253
1,437
1,282
1,231
1,195
1,040
978
840
741
677
19,081
29,755
2009
1,182
1,145
1,086
1,012
1,005
936
924
816
656
548
16,007
25,317
Growth (%) 2008-2009
5.7
20.3
15.3
17.8
15.9
10.0
5.5
2.9
11.5
19.1
16.2
14.9
Market Share (%) 2009
4.7
4.5
4.3
4.0
4.0
3.7
3.7
3.2
2.6
2.2
63.1
100.0
9Accenturehadthegreatestdecline(negative20.3%),followedbyHP(negative19.1),Capgemini(negative17.8),Logica(negative17.3%)andIBM(negative15.9%)amongthe10largestprovidersintheEuropeanmarket.ThesefiveprovidersinthisEuropeantop10listunderperformedthemarketaverageofnegative14.9%,andtheirattributesinclude:
• IntermsoftheirmarketshareinEurope,Accenturederived23.6%ofitsconsultingbusinessin2009fromtheUnitedKingdom,Capgeminiderived27.8%,andHPderived28.8%oftheregionalconsultingbusinessfromtheUnitedKingdomin2009.Further,theU.K.isAccenture’sandHP’sprimarysourcecountryforconsultingrevenueinEurope.Therefore,theU.K.hadaheavyinfluenceontheseproviders’overallresultsfortheregionin2009.
• Capgemini’sconsultingservicerevenuesplitacrosstheregionsissomewhatunbalanced,asitcollected$1,005million,or77.9%,ofitsglobal$1,291millionconsultingservicerevenuefromWesternEurope.
• Logica’s2009underperformance(negative15.3%)inconsultingrevenuegrowthversusthemarketaverageinEuropeofnegative14.9canbeattributedtoitsstrongdeclineof25.6%inconsultingservicerevenueintheNetherlandsandadeclineof25.5%inBelgium;generally,bothcountrymarketsarehistoricstrongholdsforLogica.
• IBM’sdeclineof15.9%inconsultingservicerevenuein2009wasrelativelyequallysplitacrossEurope.
5.3 Asia/Pacific: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2009The2009marketsharedatashowsthatthetop10providersinAsia/Pacificintheconsultingservicemarketaccountedfor48%ofthetotalAsia/Pacificconsultingmarket(seeTable4),anincreaseof1.1%from46.9%in2008,representingabusinessof$79millionofthetotalmarket.
SevenoutperformersexceededtheAsia/Pacificmarketaverageofnegative5.1%in2009:IBM,Accenture,PricewaterhouseCoopers,KPMGInternational,Ernst&Young,DeloitteandCSC.Further,ofthe176providersthatGartnertrackedconsultingservicerevenueforinAsia/Pacific,86exceededthemarketaverageofnegative5.1%in2009,and53providersoperatinginthisdiversegeographicalmarkethadapositivegrowthrateintheirconsultingservicerevenue.
In2009,theglobalconsultingmarketfacedaremarkablysynchronizedglobaldownturn,butin2010,providersstartedtoexperienceamultispeedGDPrecovery.TheAsia/Pacificregionclearlyhighlightsthattherecoveryisproceedingatdifferentspeeds,anditremainsfragile.Theseconditionsposetheirownchallengestoconsultingserviceprovidersoperatinginadvancedeconomies,suchasAustralia,oremerginganddevelopingeconomies,suchasChinaandIndia.Further,acrosstheregion,thebusinessconfidenceindexforSouthKorea,Malaysiaand
Taiwanisupfromthehighlevelsof2008,accordingtotheInternationalMonetaryFund(IMF),signalingprojectopportunitiesforproviders.
Positionsinthelistdidnotchange,andits10membersfortheAsia/Pacificregionremainedthesame,comparedwith2008.SamsungSDS,UXCandLGCNSrepresentlargeAsia/Pacific-focusedprovidersforbusinessandITconsultingservices.Forexample,localITservicesfirmUXC,whichhassignificantbusinessinthegovernment,communicationsandretailsectors,isalsoincludedinthelist,anditderives$155millionofits$170millionbusinessintheregionfromclientsinAustralia.LGCNSandSamsungSDSareITservicesarmsoftheirchaebolconglomerateparentcompanies.SamsungSDShas$429millionofits$462millionAsia/PacificconsultingservicerevenuefromclientsinSouthKorea,andLGCNS,SouthKorea-based,derives$141millionofits$152millionintheregionalsofromSouthKorea.
Ourdatafor2009liststhe10largestprovidersofconsultingservicesinAsia/Pacific(seeTable4).
Attributesofthesevenoutperformers(IBM,Accenture,PricewaterhouseCoopers,KPMGInternational,Ernst&Young,DeloitteandCSC),whichexceededtheAsia/Pacificmarketaverageofnegative5.1%in2009,include:
• TheBigFour’sperformanceinbusinessconsultingservicescontributedtotheirbetter-than-market-average(negative5.1%)revenuegrowthin2009inAsia/Pacific.Resultsofthesefourproviderscanfurtherbeattributedtoclientsinanumberofverticals,suchasfinancialservices,communications,government,utilitiesorhealthcareintheregion.Consistently,allfourprovidershavetheirlargestshareoftheirAsia/PacificconsultingservicerevenueinAustraliaandinthefinancialservicesindustry(FSI).Allfourproviders’revenuegrowthintheFSIexceededthemarketaverageofnegative4.8%in2009forconsultingservicesintheAsia/Pacificregion.FSIrepresents$1,670million,or23.2%,oftheregion’stotalconsultingmarketof$7,187millionin2009.TheBigFourconsultingfirmswereamongthe41providersforwhomwereportedpositiverevenuegrowth(exceeding0%)inthisregionalmarketin2009.
• SuccessattributesforIBMandAccentureincludecountry-specificrevenuegrowth,suchasinChina.IBMrevenueforconsultinggrewfrom$254millionto$297million,or16.6%,inChina.AccenturegrewitsconsultingrevenueinChinafromarevenuebaseof$46millionto$60million,or28.7%.ForCSC,wereportedrevenuegrowthinSingapore(24.0%)andTaiwan(22.8%).
LGCNS(negative19.4%),SamsungSDS(negative18.6%)andUXC(negative14.6)alldeclinedinrevenueintheAsia/Pacific.ThesethreeprovidersintheAsia/Pacifictop10listunderperformedthemarketaverageofnegative5.1%,andtheirattributesinclude:
• SamsungSDS’sandLGCNS’sunderperformanceareduetotheircontinuedhighrevenuedependencyonSouthKorea;92.9%ofSamsungSDS’stotalAsia/Pacificconsultingservice
10
revenuewasderivedfromSouthKorea,and92.8%ofLGCNS’sAsia/Pacificconsultingrevenuewasderivedfromthesamecountry.IntermsoftheSouthKoreanwon,theseproviders’consultingrevenuedeclined7.3%forSamsungSDSanddeclined8.4%forLGCNSin2009comparedwith2008.However,theSouthKoreaneconomyrecoveredinthesecondhalfof2009,accordingtotheBankofKorea.
• UXCfacedchallengesinNewZealandandAustralia,withdecliningconsultingrevenueof18.8%and14.3%,respectively,in2009.
5.4 Japan: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2009The2009marketsharedatashowsthatthetop10providersinJapanintheconsultingservicemarketaccountedfor68.1%ofthemarket,downby0.7%fromitspreviouslevelof68.8%;revenueof$39millionwastransferredtoprovidersthatwerenotpartofthetop10list.
TheaveragemarketdeclineintheconsultingmarketinJapanforallproviderswas0.5%.Thisnegative0.5%growthratewasoutperformedbyfiveprovidersin2009(seeTable5):Fujitsu,NEC,NTTData,NomuraResearchandMitsubishiElectric.Further,ofthe89providersthatGartnertrackedconsultingservicerevenueforinJapan,51exceededthemarketaverageofnegative0.5%in2009,
and49providersoperatinginthisdiversegeographicalmarkethadpositivegrowthintheirconsultingservicerevenue.
InJapaneseyen,however,theconsultingmarketintheregiondeclined9.9%in2009comparedwith2008,and11providersreportedpositivegrowth.ThisresulthighlightsthattheimpactoftheappreciationoftheJapaneseyenagainsttheU.S.dollarwasstrongin2009;forcomparisonpurposes,weprovidethelistofthetop10alsoinlocalcurrency(seeTable6).
ThebusinessenvironmentinJapanwassevereforthewholeof2009,andmanyorganizationskepttightITservicesspending,especiallyspendingrelatedtoconsultingservices.ConsultingserviceprovidersoperatingintheJapanesemarketfoundasomewhatpositivebusinessenvironment,withtheGDPincreasingby0.9%inthefourthquarterof2009(negative0.1%inthepreviousquarter),accordingtoEurostat.Theofficealsoreportedforthewholeof2009thatGDPdecreasedby5.2%inJapan,comparedwithitdecreasing1.2%in2008.
Positionsinthetop10listchanged,andToshibaexitedthelist,whilePricewaterhouseCoopersenteredthetop10asaresultofitsacquisitionofBearingPointin2009;PwChasincreaseditspresenceinthelocalmarket.
Somelargedomesticprovidersinvestedinenhancingtheirconsultingcapabilitiestoeffectivelyapproachcorporateexecutiveofficersofuserorganizations—whosebudgetswerestrictlycontrolled—towinprojects.HitachiandNTTDatahavebeen
Source:Gartner(April2010)
Table 4. Asia/Pacific: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2008-2009 (Millions of Dollars)
Vendor
IBM
SamsungSDS
Accenture
PricewaterhouseCoopers
KPMGInternational
Ernst&Young
Deloitte
CSC
UXC
LGCNS
OtherServiceVendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
887
570
441
366
259
218
217
208
199
189
4,016
7,570
2009
875
462
438
409
262
253
232
200
170
152
3,725
7,187
Growth (%) 2008-2009
1.4
18.9
0.7
11.6
1.2
16.1
7.1
4.1
14.6
19.4
7.2
5.1
Market Share (%) 2009
12.2
6.4
6.1
5.7
3.6
3.5
3.2
2.8
2.4
2.1
52.0
100.0
11acquiringconsultingcompanies,andFujitsurestructureditsorganizationandaggregateditsconsultingresourcesamongthegroupintoasubsidiaryprovidingnewoptionsforJapaneseclients.SuchmovessignalthatprovidershavestartedseeingastrongeraffinityoftheirIT-consulting-ledprojectstowardthefinancialadvicerequiredbysomeoftheirbuyers.
The2009top10marketsharedatashowsthe10largestsuppliersofconsultingservicesoperatinginJapan’smarket(seeTable5).
Attributesofthefiveoutperformers(Fujitsu,NEC,NTTData,NomuraResearchandMitsubishiElectric),whichexceededtheJapanesemarketaverageofnegative0.5%in2009,include:
• Ongoingstrongrelationshipswithcompaniesinthemanufacturingindustry,whichretainedITinvestmentstoimprovethebusinessprocessorexpandglobaloperations,evenunderseverebusinesscircumstances.Fujitsu,NEC,NTTDataandNomuraResearchempoweredtheirdeliverycapabilitiesinregionssuchastheAmericas,EastAsia,EuropeandChina,tostrengthentheircompetitivenessinconsultingprojects.
• Aconsistentattributeofallthesefiveproviders(Fujitsu,NEC,NTTData,NomuraResearchandMitsubishiElectric)ofbusinessandITconsultingservicesinJapanisthattheyareallheadquarteredinJapan.
• FocusputontheITcostoptimizationrelatedtoconsulting,includingthereviewofcurrentsystemsandITcosts,spendingonsoftwaresupportmaintenance,andoutsourcing.
IBM,Hitachi,PricewaterhouseCoopers,ITHoldingsandNihonUnisysdeclinedinrevenueinJapan’sbusinessandITconsultingmarketin2009.Thesefiveprovidersinthistop10listunderperformedthemarketaverageofnegative0.5%,andtheirattributesinclude:
• WeobservedthatsomeproviderswerelateinestablishingglobalsupportcapabilitiestogainattractionfromthegloballyoperatingJapanesemanufacturers.
• Relativelyhighdependencyonthefinancialservicessector,whichdrasticallycutITbudgetsandfrozeongoingprojectsin2009.
• NomuraResearchandMitsubishiElectricderive100%oftheirglobalconsultingservicerevenuefromclientsinJapan,andNECderived91.1%ofitsglobalconsultingrevenuefromclientsinJapan.
• NTTDatageneratedrevenueof$190million,or34.7%,fromtheFSIin2009.
Source:Gartner(April2010)
Table 5. Japan: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2008-2009 (Millions of Dollars)
Vendor
Fujitsu
NEC
IBM
NTTData
Hitachi
NomuraResearch
PricewaterhouseCoopers
ITHoldings
MitsubishiElectric
NihonUnisys
OtherServiceVendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
676
540
564
526
582
195
183
170
148
125
1,683
5,392
2009
712
550
546
529
526
206
155
152
149
125
1,712
5,362
Growth (%) 2008-2009
5.3
1.9
3.2
0.5
9.6
5.9
15.2
10.7
0.9
0.6
1.8
0.5
Market Share (%) 2009
13.3
10.3
10.2
9.9
9.8
3.8
2.9
2.8
2.8
2.3
31.9
100.0
12
Forcomparisonpurposes,weprovidedthelistoftop10consultingserviceprovidersinJapaninlocalcurrency(seeTable6).Ofthe89providersthatGartnertrackedconsultingservicerevenueforinJapan,49exceededthemarketaverageofnegative9.9%in2009,and11providersreportedpositivegrowthinyen.
6.0 Key Business and IT Consulting ServicesThisdocumentusesGartner’sterminologyforconsultingservices,whichisanaggregateforbusinessandITconsultingadvisoryservices.
Businessconsultingservicesincludebusinessoperationsconsultingservicesthattypicallypreface,enableorinfluencetheadoptionofIT.Thesebusinessconsultingservicesincludebusinessprocesstransformation,businessprocessredesignorre-engineering,businessperformanceimprovement,corporatecompliance,financetransformation,humancapitalmanagement,riskmanagement,governanceandsourcingadvisory.BusinessconsultingisdifferentfromITconsulting,whichisadvisoryservicesthathelpclientsassessdifferenttechnologystrategiesand,insodoing,aligntheirtechnologystrategieswiththeirbusinessorprocessstrategies.
Examplesofthesetypesofservicesincludetransformationalchangemanagementafteramerger,acquisitionanddivestures,complianceissues,costreduction,innovationinitiativesinproductmarketing,ITimprovements,organizationaldesign,processimprovement,productivityimprovement,orfunctionaladviceforfinancemanagement,humanresources,supplychain,marketingorcustomercare.
7.0 Evolution of the Worldwide and Regional Consulting MarketsWorldwide,Gartnerpredictsthatinthenearterm,revenuepressuresonconsultingserviceproviderswillcontinuetobehigh.Consultantsmustalsoupdatetheirknowledgebasefrequentlytokeeppacewithevolvingbusinessandtechnologyneedstodefendtheirmarketshare.“HypeCycleforConsultingandSystemIntegration,2009”showshowdynamicthebusinessconditionsareforbusinessandITconsultingserviceprovidersandtheirpotentialclients.Rightnow,enterprisecosttakeoutandbusinessprocessimprovementareinthescopeformanyconsultingprojects.Apartfrompricepressureonconsultingdayratesandfrequentchangestobusinessconditionsandtechnology,theglobalconsultingmarketprovidersfacechallengesfromcompetitivetechnologies,suchasonlineadvisoryservices,software-enabledbusinessmodelsandbusinessprocesssimulations.
Source:Gartner(April2010)
Table 6. Japan: Top 10 Consulting Service Providers’ Revenue, Growth and Market Share, 2008-2009 (Millions of Yen)
Vendor
Fujitsu
NEC
IBM
NTTData
Hitachi
NomuraResearch
PricewaterhouseCoopers
ITHoldings
MitsubishiElectric
NihonUnisys
OtherServiceVendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
69,884
55,787
58,324
54,402
60,125
20,139
18,953
17,585
15,307
12,974
173,899
557,379
2009
66,631
51,478
51,143
49,517
49,234
19,305
14,545
14,215
13,982
11,680
160,208
501,938
Growth (%) 2008-2009
4.7
7.7
12.3
9.0
18.1
4.1
23.3
19.2
8.7
10.0
7.9
9.9
Market Share (%) 2009
13.3
10.3
10.2
9.9
9.8
3.8
2.9
2.8
2.8
2.3
31.9
100.0
13Forregionalconsultingservicemarkets,weexpectbuyerswillcontinuetocarefullymanagetheirbudgets,asevidencedbyintendedbehaviorsofbuyersintheU.K.,whichisthelargestmarket($6.4billion)intheEurope,theMiddleEastandAfrica(EMEA)market,andwhichisexpectedtogrow5.9%in2010.
In2010,thedemandforadviceinseveralregionsisgrowingagain,andasaresult,thedistributionofmarketsharewillevolve;weexpectthatlargerproviderswillconcentratemoremarketshareduringtheyear.
Further,someproviderslistedinthisdocumentwillstrategicallyacquirecompetitors,presentinganopportunitytogrowtheirglobalscaleandrevenuesizein2010,aswellastoacquirenewskillsneededtoaddressanincreaseddemandofbuyersseekingassistance—regionallyandglobally—tosuccessfullymanageincreasedcomplexityintheirbusinessoperations.