AbStnCt: TeiIFernandez,Allan Erank, and tllysses Knotts announcedthe formal launch of

their neut company,AnsuerThink Conailting Group, incorporateil on Apil 23. The three utere
preoiously managing partnas at WMG Peat Maruick LLP. They had announceil this past
Eebntary that they utne ledoittg KPMG to launch their own conailting anil systems integra-
tion company.AnswerThink's goal is to "rcilefine and rcengine* consulting, through what it
c aIIs r api d pt oblem so Ioing.
By ChrtsfineFqtasiRoss

Solutions
Based
onFunctional
Expertise
AnswerThink's charter is to deliver technology-enabledbusinesstransfonna-
tion services.To that end, ArswerThink will provide a range of servicesfrom
high-end consulting through technical implementation. Thesesolutions will
be targeted at three core functior,s (and decision makers:finance and admin-
istration (CFO lsolutionssrr),information technology (CIO lsolutionssN{),
and
Salesand Marketing (Customerlsolutionsil). Someof the offerings within
thesesolution setsinclude functional processTransformation I solutionsw for
finance and administration, information technology,and salesand marketing;
Knowledge I solutionsil (knowledge management);PackageIntegra-
tion lsolutionssM(Oracle and PeopleSoft);Data Warehousinglsolutionsw;
SystemsI solutionsil (hardware and software acquisition and configuration"
network integration); Millennium I solutionssv(Year2000);and Electronic
CommerceI solutionssNt (extranetsand Web-enabledapplications).

Thesesolutions and offerings are supported by AnswerThink's expertisein

core technical skills including IT sbategy, processimprovemenf project man-
agement,technology architecture,advanced technology integratiory network
desigo application development, and databaseimplementation.

DataqUest
Proglam:
Consulting
andSystemIntegration
NorthAmerica
Producl
Code:DPGN-WW-DP-9712
Pubfication
Date:
June2,1997
 Integration
NorthAmerica

AnswerThink is intentionally choosingnot to go to market by vertical

industry.,a,lthogglr the company has iidustry"rtittr and will continue to
develop theseskills, it believeslhat cross-industry best practicesare more
effectivethan industry-specific best-in-classapproachejir, delirr"ring value
to clients.

Interenteryilse
Knowledge
Sharing
The company is pursuing a "knowledge based"businessmodel that incor-
porates,a"mindshare,knowledge base-"of future possibilities basedon cur-
rent technologiesand businesstrends, technical i-nformation,industry
informatiory-bestpractices,methods and templates, and summaries 6f
shared learning. This knowledge basewouldihen be the foundation of all
consultant work, where the consultantswork with clients to target the most
likely future outcome, createthe businessand technology infraJtructure to
support that_outcome,and migrate toward that infrastricture. As new
information becomesavailablJand as other factors affect the desired out-
come,the consultants"retarget"and modify the architecfure to maintain the
path toward the desired outcome.

To make this model

ryotk effectively ArswerThink is embedding knowl-
managementprinciptes into i!3 businessmodel and is gto*Tt g around
,ejse
theseprinciples. It is also sharing theseideas with clients tJenable-a more
effective delivery_andknowledgi trarsfer. Sharing knowledge with its cli-
ents enrichesthe knowledge baies of both the coripany and-the client, then
those knowledge basesare enriched as the client stiarei knowledge *ith itt
customersand suppliers. AnswerThink believes this conceptof iiterenter-
prise knowledge sharing will be a key competitive r"eapon?or its client and
for itself.

Success ouerthellextThreeyearc
Strategies
AnswerThink is looking at some acquisitions to fill targeted spacesin its
portfolio of skills. By th-eend of May, the company expicts to have 100
employqgsacrossseven offices: Miami, Atlanti, nmahetpnia, Boston,
Dallas, Chicago,and New York. over the course of the nixt 12 months, the
company expectsto have 500 employees.AnswerThink will also consider
other acquisitions,p-ossiblyas minyas 10 over the next three years.It will
look for com-paniesthat mip to AnswerThink's strategicplans, have similar
cultures, and fit with the existing AnswerThink teaml

Once it has recruited a cadre of consultants,AnswerThink believes that it

dglive-rsignificantly higher value to clients by raising consultant reten-
93n
tion, thereby increasing the experiencebase that clients cin access.As a
measureof its effectivenessfor this goal, AnswerThink plans to keep
employee tumover under 10 percenl per year.

The company also plans to have over $500million in revenue in the next
three years.AnswerThink is funded with venture capital, but the founders
ultimately.want the.coTpany to be publicly held. AriswerThink expectsto
have an initial public offering. AnswerThink's founders believe thal its abil-
ity to_succeed in the consulting and systemsintegration spacewill be due
largely to leverage it can aihieve is a publicti-rreta coinputry with a
$e
majority of associate-ownership.

DPGN-WW.DP-9712 @1997
Dataouest J u n2
e. 1 9 9 7
 Integration
andSystem
Consulting NorthAmerica 3

Perspectiue
Dataquest
Most companies in the professional servicessPacecan claim at least one
spin-off company.Few ipin-offs, howevet can claim the experiencelnd
senioriW of AnswerThirk. It is clear that the founders have createdtheir
ideal businessmodel. Now what remains for them is to implement and suc-
ceedwith this new model. The differentiators in this businessmodel are the
focus on horizontal skilts over vertical, the integration of knowledge man-
agement into the businessmodel, and the strategy for hiring and retaining
talent.

Although many corsulting and systemsintegration companieswill con-

tend thitthey too offer solutions, the key differentiator for AnswerThink is
that its solutions are not embedded into vertical offerings. The company's
decision not to use a vertical go-to-market strategy will need to be watched
closely.Dataquestresearchshows that end users exPecttheir co1sgl$ng
and systemsintegration providers to have vertical expertise.All of the
majoi providers of consulting and systemsintegration, including Ande,rsen
Consulting, EDS, IBM, and most recendy CSC,go to market on vertical
expertise.The market for professional servicesis dynamic, and just as verti-
cal expertisebecameimportant in the last few years, it may ceaseto be as
critical in the coming years.As vertical industries converge and redefine
themselves,serviceproviders must determine what AlswerThink calls the
"essence"of each veitical's needsand embed those into offerings.

Knowledge managementis becoming a necessityfor consulting and sys-

tems integration pioviders. All of the major companiesin this sPacerepolt
that their ability tb createand shareknowledge quickly is a cornerstoneof
their competitive strength.Yet few had the opportunity to build their busi-
nesseson-knowledge managementprinciples the way that AnswerThink
seeuu to be building theirs. This could almost be considered a laboratory
for how well knowldgu marulgementprincipals canbe incorporated into
today's businessenvironment.

Relative to the company'sgrowth strategies,AnswerThink has some ambi-

tious goals.The company'Jability to achieveits revenue goal will be deter-
mined by its ability tb achieveits human resourcesgoal, namely hiring or
acquiring peoplg with the right skills and then retaining those people by
sharing company equity.

AnswerThink's founders clearly have a solid understanding of coruulting

and systemsintegration. They ilso have many years of expertisein deliver-
ing client solutions. The new businessmodel outlined by AnswerThink is
intriguing, but there are many aspectsof thisbusiness,plan that will be
launihed-for this first time on a lirge scale.The consulting rnarket has con-
sistently been characterizedby a selectset of large players and !he11pre-
cipitoui drop to a huge base of small consulting firms with under $L00
million in revenue.Today's strategy for medium-size consulting organiza-
tions seemsto be to achiive a certain size and then be acquired by a large
provider. If AnswerThink succeedsin its goals,the new model will suggest
I growth strategy for those consulting players aiming to compete-wi-th the
culrrentindustr!'leaders. Therefore,n-eit tirree yearsiryitt stro* whether
AnswerThink indeed has captured the new way to do business.

DPGN-WW.0P.9712 01997Dataquest June2,1997