Magic Quadrant For Business Operations Consulting Services, Worldwide, Dec 2013

9/22/2014 Magic Quadrant for Business Operations Consulting Services, Worldwide
http://www.gartner.com/technology/reprints.do?id=1-1QLGACG&ct=140210&st=sb 1/10
Magic Quadrant for Business Operations
Consulting Services, Worldwide
23 December 2013 ID:G00248935
Analyst(s): Dana Stiffler
VIEW SUMMARY
This Magic Quadrant evaluates the global business operations consulting capabilities of 10 business
consulting service providers. Buyers can leverage this Magic Quadrant to identify and select the
appropriate consultancy for business operations strategy and execution projects.
Market Definition/Description
Business operations consulting (BOC) services are strategy and transformation consulting services that
support senior business stakeholders that is, COOs, chief supply chain officers, chief procurement
officers and other leaders in their efforts to improve their companies' operations on a global basis.
The following capabilities fall into Gartner's definition of BOC:
Operations strategy and transformation consulting services as a horizontal category across the
following three functional categories:
Product innovation and life cycle management
Supply chain management (SCM), which encompasses plan, source, make, deliver and
service
Sourcing and procurement, which is pulled out separately from SCM since it is often treated
as a separate, very large transformational area
BOC services help companies analyze, define, validate and improve operations, and they require strong
capabilities in program management, change management and governance.
A BOC services client sits in an operations function or line of business. BOC services exclude technology
consulting, system integration and outsourcing, or any service in which the primary client is the IT
organization. They also exclude outsourced supply chain and operations business processes; pure
strategy consulting services that do not have an implementation/execution focus; and any form of
business process outsourcing or ongoing business process support.
Technology may be an enabler for these engagements, particularly for analytics-heavy projects, but it is
not the focus of the service being delivered. Operations outcomes are the focus.
Magic Quadrant
Figure 1. Magic Quadrant for Business Operations Consulting Services, Worldwide
EVIDENCE
This analysis is based on:
Interviews and briefings with the 10 participating
service providers
Fifty client references (submitted by the
participating service providers), which were
personally interviewed by the analysts supporting
this research
Gartner inquiries and discussions conducted in the
past 12 months with service provider and buyer
organizations
Press releases and publicly available information,
including company websites and financial reports
EVALUATION CRITERIA DEFINITIONS
Ability to Execute
Product/Service: Core goods and services offered by
the vendor for the defined market. This includes
current product/service capabilities, quality, feature
sets, skills and so on, whether offered natively or
through OEM agreements/partnerships as defined in
the market definition and detailed in the subcriteria.
Overall Viability: Viability includes an assessment of
the overall organization's financial health, the financial
and practical success of the business unit, and the
likelihood that the individual business unit will continue
investing in the product, will continue offering the
product and will advance the state of the art within the
organization's portfolio of products.
Sales Execution/Pricing: The vendor's capabilities in
all presales activities and the structure that supports
them. This includes deal management, pricing and
negotiation, presales support, and the overall
effectiveness of the sales channel.
Market Responsiveness/Record: Ability to respond,
change direction, be flexible and achieve competitive
success as opportunities develop, competitors act,
customer needs evolve and market dynamics change.
This criterion also considers the vendor's history of
responsiveness.
Marketing Execution: The clarity, quality, creativity
and efficacy of programs designed to deliver the
organization's message to influence the market,
promote the brand and business, increase awareness
of the products, and establish a positive identification
with the product/brand and organization in the minds
of buyers. This "mind share" can be driven by a
combination of publicity, promotional initiatives,
thought leadership, word of mouth and sales activities.
Customer Experience: Relationships, products and
services/programs that enable clients to be successful
with the products evaluated. Specifically, this includes
the ways customers receive technical support or
account support. This can also include ancillary tools,
customer support programs (and the quality thereof),
availability of user groups, service-level agreements
and so on.
Operations: The ability of the organization to meet its
goals and commitments. Factors include the quality of
the organizational structure, including skills,
experiences, programs, systems and other vehicles
that enable the organization to operate effectively and
efficiently on an ongoing basis.
Completeness of Vision
Market Understanding: Ability of the vendor to
understand buyers' wants and needs and to translate
those into products and services. Vendors that show
Source: Gartner (December 2013)
Vendor Strengths and Cautions
Accenture
Accenture is positioned in the Leaders quadrant. Gartner estimates that Accenture had about 2,800
business operations professionals who generated revenue of about $620 million in calendar year 2012.
Notable developments in the past 12 months included Accenture's focus on product innovation and life
cycle management. In August 2013, it acquired Prion Group, a Germany-based product life cycle
management consulting and implementation service firm with more than 300 employees. Besides
innovation, risk management and the impact of digital technology and analytics are key areas of
operations investment. In terms of its enablement capabilities and assets, Accenture has a center of
excellence for every major operations function, dedicated benchmarking and analytics solutions, the
Accenture Supply Chain Academy, and 300 dedicated operations resources based in the Accenture
Management Consulting Capability Network.
Accenture's operations consulting practice has most of its engagements in broad SCM, followed by
sourcing and procurement engagements, and then product innovation. The consumer goods, retail,
high-tech and communications, and energy sector value chains are dominant in the portfolio.
Strengths
Geographic strategy: Accenture's BOC capability is massive, global and well-integrated.
Service: Accenture's consistent commitment to proactively investing in supply chain and
operations consulting and adjacent services across industries is unrivaled, as is its ability to deliver
from strategy to execution.
Customer experience: Accenture's program management expertise was the highest rated
among participants. Relationship management and responsiveness from the junior through the
executive staff are strong.
Cautions
Sales strategy: Overpitching and overselling are perpetual challenges as Accenture's associates
continually seek the next big deal.
Pricing: Accenture's services command a premium, relative to other participants in this research.
Customer experience: While clients relish the attention and responsiveness they get from
Accenture, they must also contend with aggressive salesmanship, which they don't always care
for.
A.T. Kearney
A.T. Kearney is positioned in the Leaders quadrant. Gartner estimates that it had about 1,400 business
operations professionals who generated revenue of about $470 million in calendar year 2012. Notable
the highest degree of vision listen to and understand
buyers' wants and needs, and can shape or enhance
those with their added vision.
Marketing Strategy: A clear, differentiated set of
messages consistently communicated throughout the
organization and externalized through the website,
advertising, customer programs and positioning
statements.
Sales Strategy: The strategy for selling products that
uses the appropriate network of direct and indirect
sales, marketing, service, and communication affiliates
that extend the scope and depth of market reach,
skills, expertise, technologies, services and the
customer base.
Offering (Product) Strategy: The vendor's approach
to product development and delivery that emphasizes
differentiation, functionality, methodology and feature
sets as they map to current and future requirements.
Business Model: The soundness and logic of the
vendor's underlying business proposition.
Vertical/Industry Strategy: The vendor's strategy
to direct resources, skills and offerings to meet the
specific needs of individual market segments, including
vertical markets.
Innovation: Direct, related, complementary and
synergistic layouts of resources, expertise or capital for
investment, consolidation, defensive or pre-emptive
purposes.
Geographic Strategy: The vendor's strategy to direct
resources, skills and offerings to meet the specific
needs of geographies outside the "home" or native
geography, either directly or through partners,
channels and subsidiaries as appropriate for that
geography and market.
developments in the past 12 months included A.T. Kearney's focus on advancing the integration of
existing service capabilities, optimizing functional offerings, investing in innovation capabilities, and
designing more collaborative services to help clients enhance and refine their own capabilities. With
regard to its enablement capabilities and assets, A.T. Kearney has developed a number of proprietary
tools and methodologies, including the Seven Step Strategic Sourcing Model.
A.T. Kearney's functional specialty is sourcing and procurement across multiple sectors, complemented
by other engagements in the end-to-end supply chain.
Strengths
Market understanding: A.T. Kearney's strong competitive views and operations roots allow it to
be tough and credible in convincing stakeholders across the organization that changes must be
made.
Service: A.T. Kearney delivers smoothly from strategy through implementation across the firm,
aided by its single profit pool structure. Its focus on sourcing and procurement has led to a deep
understanding of and ability to execute against value-based pricing models.
Customer experience: Clients cite A.T. Kearney's strong tools and methodologies, IP co-
creation, collaborative capability building and knowledge transfer as key strengths.
Cautions
Geographic strategy: Lack of local talent outside the U.S. and Western Europe is a gap.
Offering strategy: The broader operations consulting groups are underrepresented in IT
capabilities and enabling analytics engines. Collaborating within different practices at A.T. Kearney
could yield additional value for clients and opportunities for the firm.
Customer experience: Clients would welcome more strategic interactions with and thought
leadership from A.T. Kearney.
BearingPoint
BearingPoint is positioned in the Challengers quadrant. Gartner estimates that it had about 450
Through BearingPoint's exclusive alliance network with the consulting firms West Monroe Partners
(U.S.-based) and ABeam Consulting (Japan-based), it is able to augment its talent base to another 550
operations professionals if clients require locally based resources in the Americas or the Asia/Pacific
(mainly Japan) region. Notable developments in the past 12 months included BearingPoint's opening of
a China office with 20 consultants, further global alignment of capabilities among the alliance partners,
and the carving out of offerings and tools like the Supply Chain Transformation Toolbox and Green
Supply Chain Management. In terms of its enablement capabilities and assets, BearingPoint has
proprietary analytics tools like HyperCube and LogEC.
BearingPoint's functional focus is strongest for end-to-end SCM, followed by sourcing and procurement,
and product innovation. The combined alliance network of BearingPoint/ABeam/West Monroe Partners
has strong and differentiating capabilities in automotive and retail, including a rare focus on workforce
optimization in the distribution and retail sectors.
Strengths
Market responsiveness: BearingPoint's offerings are in line with the times, with services that
meet specific operations and regulatory needs. Its engagement style is practical and flexible.
Pricing: Being in tune with the current consulting needs of clients means flexibility and innovation
in engagement structures, including gain share and more fixed fee work than competitors.
Customer experience: BearingPoint's consultants are globally experienced, multilingual and
expert across operational processes and topics.
Cautions
Geographic strategy: While formidable in Europe, BearingPoint is still regarded as a regional
player. Direct resources are not available in key locations globally, which is a disadvantage when
clients move to implementation mode.
Marketing strategy: The BearingPoint brand has a difficult legacy behind it, and the alliance
network is challenging to explain. These are two hurdles to articulating value, and other global
consulting firms do not have to deal with this.
Customer experience: Clients would like to see more strategic thinking from BearingPoint to
complement its process improvement expertise.
Deloitte
Deloitte is positioned in the Leaders quadrant. Gartner estimates that it had about 4,800 business
operations professionals who generated revenue of about $1.17 billion in calendar year 2012. Notable
developments in the past 12 months included Deloitte's acquisition of Monitor Group, which bolstered
its strategy, innovation and life science capabilities. In addition, Deloitte formed an alliance with 3D
Systems to help clients understand the implications of the evolving 3D printing space, as well as
advanced service accelerators with an emphasis on end-to-end solutions, analytics, data visualization,
and risk and sustainability management. Deloitte's enablement capabilities and assets include war-
gaming techniques, a design-for-value framework, and the analytics visualization studio at its Highly
Immersive Visual Environment (HIVE) center.
Deloitte's BOC portfolio is strong in end-to-end SCM, sourcing and procurement, and product
innovation. Leading sectors in Deloitte's practice are consumer goods and industrial discrete
manufacturing, as well as healthcare and energy.
Strengths
Offering strategy: Strategy and execution capabilities at scale are Deloitte strengths, as is
consistent quality in the resource pool. Overall satisfaction with the complete engagement
approach and experience is among the highest in this study.
Innovation: Deloitte's investments in alliances, tools and robust methodology have payoffs in the
consistent experiences that clients report.
Customer experience: A quick understanding of client issues and complex company dynamics is
a strength. Lead partners are consistently impressive. Global presence and consistency in delivery
are strong selling points.
Cautions
Marketing execution: Marketing of operations consulting and accompanying thought leadership
remains fragmented across Deloitte.
Pricing: Clients rate Deloitte's services as more expensive relative to other consulting partners.
Customer experience: "Consulting speak" can be a distraction in some engagements, clouding
what are otherwise solid recommendations to diverse stakeholders.
EY
EY is positioned in the Challengers quadrant. Gartner estimates that it had about 1,500 business
developments in the past 12 months included EY's acquisitions of Axia Value Chain, with about 140
employees in Brazil, and J&M Management Consulting in Germany, with a staff of 320 consultants. Each
acquisition expands EY's operations presence in Brazil and continental Europe, respectively. In addition,
EY launched sector-specific global centers of excellence. With regard to enablement capabilities and
assets, EY has a Supply Chain Transformation Framework and Value Chain Optimization Methodology.
EY's BOC portfolio consists primarily of end-to-end supply chain work including integrated business
planning and logistics and fulfillment engagements followed by sourcing and procurement projects,
as well as product innovation.
Strengths
Service: EY scores high marks on the quality of its people, as well as its expertise across supply
chain functions, notably procurement. Its complex implementation management capabilities are
impressive.
Pricing: Clients are pleased with the value they receive from EY for comparatively lower fees.
Customer experience: EY's understanding of client organizations and specific issues, as well as
cultural fit, is among the best in this study. Overall quality of service is also outstanding.
Cautions
Geographic strategy: EY is still building a global presence in these consulting categories (see
acquisitions above), and does not yet have a foundation of global assets to leverage.
Offering strategy: EY's strategic consulting capabilities are not yet on par (at scale) with its
execution capabilities.
Customer experience: Clients working with extended teams across regions noted a dip in the
quality of resources.
Hitachi Consulting (Celerant Consulting)
Celerant Consulting, which was acquired by Hitachi Consulting on 31 December 2012, is positioned in
the Challengers quadrant. Gartner estimates that the combined BOC capability of Celerant and Hitachi
was about 750 business operations professionals, who generated revenue of about $175 million in
calendar year 2012. Celerant, a pure-play business operations consulting firm with an estimated 600
employees, was based predominantly in the U.S. and Europe. In terms of proprietary enablement
capabilities and assets, Hitachi Consulting builds on Celerant's intellectual property (IP), including its
Closework framework, readiness assessments, productivity benchmarking, and project management
control and reporting system.
Celerant focuses on broad operations improvement, as well as product innovation and sourcing and
procurement. It is particularly well-established in the industrial, consumer goods, process
manufacturing and resource sectors.
Strengths
Industry strategy: Rare plant-level and manufacturing network strategy and execution expertise
down to the operational technology level set Celerant Consulting apart, particularly in the
industrial and process manufacturing industries.
Business model: More than any other participant in this research, Celerant Consulting's
operational consulting business model is value-based that is, an engagement's goals must be
met and a positive outcome achieved for the firm to collect its fees.
Customer experience: Celerant's robust execution methodologies and clarity in guiding clients
result in sustained capabilities once the client is on its own. Also, in contrast with larger consulting
firms, even relatively new associates have the breadth, depth and experience to quickly gain
credibility with clients.
Cautions
Offering strategy: The intense focus on process execution and excellence means that more
strategic operations dialogue with clients has been limited. Also, since IT was not a focus of
Celerant's, its analytics competencies and toolsets are not as sophisticated as its competitors'.
Geographic strategy: Ties between Celerant's U.S. and European practices need strengthening,
and a global identity and capabilities need to be established for the now-united capability under
Hitachi Consulting.
Customer experience: The very structured methodology and specialized language can result in
Celerant's inability to grasp the full scope of the client's need and difficulty in connecting with
diverse stakeholders.
IBM
IBM is positioned on the edge of the Leaders quadrant. Gartner estimates that it had about 2,500
One notable development in the past year was IBM's move to leverage a pool of 275 IBM corporate
operations and supply chain employees in the delivery of consulting services. In addition, IBM invested
in exploring digital technology implications for operations, re-engineered its transformation and
program management approach BetterTransformation, and refined its benchmarking program. In terms
of enablement capabilities and assets, IBM has a Supply Chain Transformation method, supply chain
analytics software assets (like Emptoris and Ilog), a Target Operating Model framework, an integrated
product development framework, a supply chain scenario modeler and the IBM Program Work Center
(IPWC).
The bulk of IBM's operations work is in the end-to-end supply chain, followed by sourcing and
procurement. IBM's portfolio spans all sectors, with a strong focus on high tech, industrial and
consumer goods manufacturing.
Strengths
Geographic strategy: IBM's global presence and the global expertise of its top consultants are
formidable. Whether employing local employees or employees in low-cost delivery centers, IBM is
among the leaders in terms of its ability to field and leverage a global workforce.
Service: IBM executes well across supply chain functions and issues. Portfolios within specific
functions are deep, with strong views into enabling technologies.
Customer experience: Deep knowledge of the electronics manufacturing sector sets IBM apart,
as does enabling technology expertise in diverse functional areas. Consultants listen well and do
not overprescribe.
Cautions
Operations: IBM is massive, which can lead to uneven quality in business consulting resourcing
and execution.
Pricing: Clients report IBM to be relatively expensive compared with other consultants featured in
this study.
Customer experience: Clients would like to see stronger knowledge transfer and more
innovative approaches from IBM. They associate IBM's value proposition strongly with technology
as an enabler.
KPMG
KPMG is positioned in the Challengers quadrant. Gartner estimates that it had about 1,400 business
developments in the past 12 months included KPMG's establishment of a global procurement center of
excellence, which will be followed by new centers for end-to-end supply chain and product innovation,
respectively. In addition, the firm invested in new development of some sector-specific methodologies,
a rapid value assessment tool and new enabling technologies. With regard to enabling capabilities and
assets, KPMG has a value delivery framework, a supply chain and operations process toolkit, and a
target operating model framework, to name a few.
Sourcing and procurement engagements dominate KPMG's portfolio today, with broader SCM projects
increasing in number and product innovation emerging as a focus.
Strengths
Service: KPMG's service quality is excellent, with especially strong delivery in the procurement
function. Qualifications across multiple functions and participants in the automotive and industrial
equipment value chains are differentiating.
Pricing: Clients report receiving high-quality resources and deliverables for relatively low fees.
Customer experience: Tools and training approaches for procurement in particular are robust
and global. Mixed teams of consultants and industry practitioners drive strong stakeholder
alignment within clients.
Cautions
Offering strategy: The full value of integrated strategic consulting, enabling technologies and
diverse functional offerings and the broader, deeper bench that these require is not yet
present at scale.
Marketing strategy: As a result, KPMG's operations consulting messaging is under construction.
The firm has not yet staked out territory that allows it to have a differentiated value conversation
with clients.
Customer experience: The way KPMG communicates and delivers value needs to be in the
client's language, not the terminology of the practice or firm.
Kurt Salmon
Kurt Salmon is positioned in the Leaders quadrant. Gartner estimates that it had about 1,080 business
developments in the past 12 months included Kurt Salmon's focus on adapting its service portfolio to
include capabilities for digital, omnichannel selling and fulfillment, and analytics via hiring dedicated
senior talent and establishing a new team of data scientists for supporting projects. In terms of
enablement capabilities and assets, Kurt Salmon has a sector-based benchmarking database, a 1-to-1
retailing methodology and a target operating model framework.
Most of Kurt Salmon's operations portfolio is led by a broad supply chain practice, followed by sourcing
and procurement, logistics, and product innovation. Kurt Salmon is very much focused on retail and
consumer goods, followed by financial services. The firm has a burgeoning healthcare provider practice
in the U.S.
Strengths
Market understanding: Kurt Salmon's understanding of client challenges and opportunities is
world-class, stemming from its pool of highly seasoned consultants and former practitioners.
Industry strategy: Kurt Salmon serves fewer industries than others in this study, but its ability
to go deep on strategy and execution in those industries particularly retail and consumer goods
is more consistent and impactful than firms that have larger portfolios.
Customer experience: Clients appreciate Kurt Salmon's clear sector and operations focus, as
well as its willingness to recuse itself where it does not have expertise. The mix of strategic and
execution expertise is top-notch.
Cautions
Geographic strategy: The firm's local presence and depth of experience are concentrated in
Western Europe and the U.S.
Operations: Kurt Salmon's business model is heavily dependent on senior consultants for nearly
every aspect of an engagement. Injecting slightly more junior resources would improve leverage
and provide exposure and strong pipelines for future firm leadership.
Customer experience: Despite the firm's strength in markets where innovation is highly prized,
clients are often surprised to find that its innovation and product life cycle expertise are not as
strong as they should be.
PwC
PwC is positioned in the Leaders quadrant. Gartner estimates that it had about 3,700 business
developments in the past 12 months included PwC's investment in new research, as well as its focus on
new offerings and IP for product innovation and value chain transformation. In terms of enablement
capabilities and assets, PwC's set includes its PACE methodology, Catalyst Advanced Decision
Acceleration methodology, PwC Benchmarking and Analytics solutions, Sourcing and Procurement
Excellence framework, and Spend Analytics methodology.
PwC's operations portfolio is led by its expertise in the end-to-end supply chain, followed by sourcing
and procurement, and product innovation. The BOC practice is fairly evenly distributed across sectors,
with the industrial discrete manufacturing sector (composed of automotive, industrial, and aerospace
and defense) just slightly larger than other sectors.
Strengths
Offering strategy: PwC's operations consulting practice is broad and deep across functional
domains, and is nicely balanced in its ability to speak to more strategic agendas, as well as to
more standard supply chain and manufacturing ones.
Market understanding: PwC understands the challenges of running global operations very well,
and this translates into the ability to grasp client challenges quickly. Its offerings are logically
aligned to these capabilities.
Customer experience: Clients appreciate the way PwC consultants work seamlessly with client
teams, and PwC's ability to set and meet expectations with diverse stakeholders. In this study,
analytical skills were a particularly high-scoring area for PwC, compared with others.
Cautions
Innovation: With its focus on designing and implementing standard operations best practices,
PwC does not often support or push enough innovative points of view for some clients.
Pricing: Some clients find PwC to be relatively expensive for the value it provides.
Customer experience: Clients want less consulting jargon and non-value-added reporting from
PwC. Enabling technologies is not one of PwC's strong suits, compared with other operations
consultants.
Vendors Added and Dropped
We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change.
As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may
change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next
does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection
of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.
Added
A.T. Kearney was added.
Dropped
PA Consulting Group was dropped due to its focus on global strategic sourcing in indirect categories
rather than direct, and little/no revenue generated in SCM or product innovation consulting.
Inclusion and Exclusion Criteria
The criteria for service providers' inclusion in this Magic Quadrants are based on a combination of
quantitative and qualitative elements:
Quantitative Criteria:
Revenue: The provider must have total revenue from BOC of $50 million or more in
calendar year 2012.
Portfolio: The provider must have capabilities and a track record in at least two of the three
operational functions listed above in the Market Definition/Description section. SCM must be
one of these. The provider must have strategy and transformation
(implementation/execution) qualifications.
Global track record: The provider must deliver 50% or more of its total BOC project
volume on a global basis (that is, involving two or more regions, such as Western Europe
and Asia/Pacific). Note: It is unnecessary for the provider to always have its own operations
in the regions where projects are being delivered.
Client references: The provider must provide five commercial-sector enterprise (with
revenue of $5 billion or more) client references. Note: Projects must have been initiated
and/or completed within the past 24 months. In addition, respondents must maintain an
operational/line-of-business leadership role, and must still be employed at the organization
selected.
Qualitative Criteria:
Client interest: This involves client interest in specific BOC service providers, as revealed by
Gartner analysts' interactions with buyers and/or Gartner analysts' opinions on the
attractiveness of specific providers to Gartner's global operations and supply chain clients.
Market visibility: This is the overall market interest and visibility of the provider.
Evaluation Criteria
Ability to Execute
Gartner analysts evaluate service providers on the quality and efficacy of the processes, systems,
methods or procedures that enable provider performance to be competitive, efficient and effective, and
to positively impact revenue, retention and reputation. Ultimately, service providers are judged on their
ability and success in capitalizing on their vision.
Product or Service: Core services offered by the service provider that serve the defined market. This
includes current service capabilities, quality, feature sets, skills and so forth.
Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an
assessment of the overall organization's financial health; the financial and practical success of the
business unit; and the likelihood that the individual business unit will continue to invest in the service,
offer the service, and advance the state of the art within the organization's portfolio of services.
Sales Execution/Pricing: This criterion involves the service providers' capabilities in all presales
activities and the structure that supports them. It includes deal management, pricing and negotiation,
presales support, and the overall effectiveness of the sales channel.
Market Responsiveness/Record: This criterion involves the ability to respond, change direction, be
flexible, and achieve competitive success as opportunities develop, competitors act, customer needs
evolve, and market dynamics change. It also considers the provider's history of responsiveness.
Marketing Execution: This criterion involves the clarity, quality, creativity, and efficacy of programs
designed to deliver the organization's message to influence the market, promote the brand and
business, increase awareness of the services, and establish a positive identification with the service,
brand and organization in the minds of buyers. This mind share can be driven by a combination of
publicity, promotional activities, thought leadership, word of mouth and sales activities.
Customer Experience: This criterion involves the relationships, products and services/programs that
enable clients to be successful with the services evaluated. Specifically, it includes the ways customers
receive technical support or account support. This can also include ancillary tools, customer support
programs (and the quality thereof), availability of user groups, service-level agreements and so forth.
Operations: This criterion involves the organization's ability to meet its goals and commitments.
Factors include the quality of the organizational structure, including skills, experiences, programs,
systems and other vehicles that enable the organization to operate effectively and efficiently on an
ongoing basis.
Table 1. Ability to Execute Evaluation
Criteria
Criteria
Evaluation Criteria Weighting
Product or Service High
Overall Viability Medium
Sales Execution/Pricing Medium
Market Responsiveness/Record High
Marketing Execution Medium
Customer Experience High
Operations Medium
Completeness of Vision
Gartner analysts evaluate service providers on their ability to convincingly articulate logical statements
about current and future market direction, innovation, customer needs and competitive forces, and how
well they map to Gartner's position. Ultimately, service providers are rated on their understanding of
how market forces can be exploited to create opportunity for the provider.
Market Understanding: This criterion is the service provider's ability to understand buyers' needs and
translate them into products and services. Vendors that show the highest degree of vision listen to and
understand buyers' wants and needs, and can shape or enhance them with their added vision.
Marketing Strategy: This criterion involves a clear, differentiated set of messages that are
consistently communicated throughout the organization and externalized through the website,
advertising, customer programs, and positioning statements.
Sales Strategy: This criterion involves the strategy for selling service. It uses the appropriate network
of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and
depth of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: This criterion involves a service provider's approach to product
development and delivery; it emphasizes differentiation, functionality, methodology and feature set as
they map to current and future requirements.
Business Model: This criterion involves the soundness and logic of a provider's underlying business
proposition.
Vertical/Industry Strategy: This criterion involves the service provider's strategy to direct resources,
skills and offerings to meet the specific needs of individual market segments, including vertical
industries.
Innovation: This criterion involves the direct, related, complementary and synergistic layouts of
resources, expertise or capital for investment, consolidation, or defensive or pre-emptive purposes.
Geographic Strategy: This criterion involves the service provider's strategy to direct resources, skills
and offerings to meet the specific needs of countries, either directly or through partners, channels and
subsidiaries.
Table 2. Completeness of Vision
Evaluation Criteria
Evaluation Criteria Weighting
Market Understanding High
Marketing Strategy Medium
Sales Strategy Medium
Offering (Product) Strategy High
Business Model High
Vertical/Industry Strategy High
Innovation High
Geographic Strategy Medium
Quadrant Descriptions
Leaders
Leaders are performing well today, gaining traction and mind share in the market; they have a clear
vision of market direction and are actively building competencies to sustain their leadership positions.
Challengers
Challengers execute well today for the portfolio of work selected, but they have a less-defined view of
market direction. Consequently, these service providers may be the "up and comers" of the future, or
they may not be aggressive and proactive enough in preparing for the future.
Visionaries
Visionaries articulate important market trends and directions. However, they may not be in a position to
fully deliver and consistently execute. They may need to improve their optimization of service delivery.
Niche Players
Niche Players focus on a particular segment of the market, as defined by such characteristics as
functional area (that is, sales, marketing or service), vertical industry, client size or project complexity.
Their Ability to Execute is limited to those focus areas and, therefore, assessed accordingly. Their ability
to innovate may be affected by this narrow focus.
Context
This Magic Quadrant analyzes the leading provider landscape for BOC services globally. The relative
positioning of providers in this Magic Quadrant is based on factors that Gartner has determined to be
relevant to this market. We analyze consulting projects that may require a blend of strategy and
transformation capabilities for product innovation and life cycle management, SCM, and sourcing and
procurement, underpinned with program management, change management and governance
capabilities.
When considering BOC service providers for an RFI or RFP, do not simply select those in the Leaders
quadrant. All selection processes are company-specific; consequently, providers in the Challengers
quadrant may prove to be more appropriate for your engagement. This Magic Quadrant analysis is for
the consulting services required for discrete project work only, and excludes multiyear contractual
engagements that are typical of managed services or outsourcing agreements.
This Magic Quadrant is a point-in-time analysis, and the view covers key competitors with the breadth
and scale of offerings across a wide array of criteria. A consulting service provider may appear in a
specific quadrant given its strategy, as compared with the full market criteria set in this evaluation. As a
result, in any given deal, provider selection is best decided by a client's needs; therefore, consulting
service providers should not underestimate any potential competitor, because the Magic Quadrant
inclusion criteria result in the analysis of the most established providers in the BOC service market.
Other consulting service providers not evaluated in this Magic Quadrant may present better alternatives
for clients' business requirements.
For this analysis, we obtained more than 50 client references provided by the 10 BOC service providers
to supplement our views, based on daily interactions with Gartner clients as well as other primary and
secondary research projects.
Discrete manufacturing was the most prominent vertical industry from which consultants provided client
references, followed by consumer goods, process manufacturing and retail. These four vertical
industries represented more than 70% of all referenced client companies:
Discrete manufacturing: 30%
Consumer goods: 17%
Process manufacturing: 16%
Retail: 9%
Distribution: 6%
Energy: 6%
Financial services: 6%
Life sciences: 6%
Media, entertainment and telecommunications: 4%
Participant-provided references were based in North America, followed by Europe and other regions:
North America: 46%
Europe: 44%
Other: 10%
In terms of functional responsibility, nearly two-thirds of references came from leaders with broad
supply chain and operations responsibilities, while 30% were from sourcing and procurement
specifically:
SCM: 62%
Sourcing and procurement: 30%
Product innovation and life cycle management: 8%
Organizational issues, especially skills building, were the most common issues among BOC clients,
followed by efficiency and productivity management, and then data/information management in the
third major challenge category:
Organizational issues and capability building: 22%
Efficiency and productivity: 19%
Data/information management: 16%
Strategy and change management: 14%
Customer fulfillment: 14%
Regulatory and compliance management: 9%
Sustainability: 5%
Half of the clients interviewed increased their consulting spend in 2013 compared with 2012, while 23%
decreased their spend:
Increased: 50%
Stayed the same: 27%
Decreased: 23%
Fixed price was the most popular pricing model for clients' consulting engagements in this segment,
followed closely by time and materials. Value-based pricing was used in some instances; however, it is
important to note that, in most cases, the value-based component represented half or less of the total
fees the client paid on the engagement. There was only one referenced client that paid 100% of fees
based on the value realized:
Fixed price: 45%
Time and materials: 40%
Value-based pricing: 15%
Market Overview
BOC services, which are dominated by supply chain consulting, represent the largest part of the global
business consulting service market. They require strong capabilities in program management, change
management and governance. Gartner has observed consistently strong demand for BOC services over
the years, accelerated by increasing globalization, continued economic volatility, digitalization of
business and operating models, the need to better manage risk and environmental sustainability, and
emerging analytics that enable better insights. In this context, most providers are streamlining and
continually enhancing their operations consulting service portfolios to globally address complex client
requirements in better and more integrated ways.
BOC services are well-established capabilities offered by a wide range of providers, large and small.
Small and midsize providers, however, are being quickly acquired by their larger competitors. BOC
service providers all technically classify themselves as strategy and operations consultants, but on
closer examination, they may have very different services in their portfolios. Therefore, clients must
first qualify the specific requirements they have and be able to articulate whether they are in the
market for a strategy engagement, a transformational engagement or a standard business process
improvement exercise.
Many companies have used BOC services with the goal of globalizing and industrializing operations
functions to improve their bottom lines, and to increase their flexibility and agility. However, BOC
services are not just addressing bottom-line issues, but also enabling companies to position top-line
initiatives successfully. This is an increasingly important orientation to have as companies view
operations as a way to enter new markets and offer new value propositions, rather than as a pure cost
center.
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