As the demand for ERP solutions implementation services gears up in the North American market, a large number of ERP service providers are strengthening their footholds in this space. Many emerge as “leaders” while others are coming up as “challengers.” Gartner’s recent Magic Quadrant for ERP Service Providers, North America, 2007 — that positions 23 such companies — finds that Accenture, CSC, Capgemini, Deloitte and IBM are the top ERP service providers in North America. (See Table for the entire list of the leaders, the challengers and the niche players.)
The market of ERP solutions implementation services has registered a growth rate of 5 percent from 2005 to 2006. And, the increasing circumference of this market demands high investments in service delivery. In fact, one of the market leaders, Accenture continues to invest heavily on global service delivery and strong partnering relationships. At the same time, the company’s customers feel that Accenture charges them premium prices as compared to the market. Not only retaining the tag of being one of the top favorites, it is also becoming challenging for the company to bag a big chunk of efficiency-based deals, according to the study.
Gartner’s study also reveals the strengths and cautions of other market leaders. For instance, it finds that the strength of CSC and Capgemini resides in their business understanding and knowledge of their domain, whereas Deloitte’s plus point exists in its broad reach of service offerings across ERP technology and process.
The research report also suggests the buyer community that while considering service providers they should not simply select the ones in the “Leader Quadrant” but also look in to other quadrants that may also be useful for them. That’s why the study also brings out its list of “Challengers,” “Niche Players” and “Visionaries” based on their strengths.
The “Challengers” include companies like BearingPoint, CGI, Ciber, Fujitsu, Oracle consulting, Infosys Technologies, Satyam Computer Services, TCS and Wipro. CedarCrestone, Cognizant, HCL Technology Solutions, Hexaware Technologies, Hitachi Consulting, Intelligroup, Lawson Consulting and L&T Infotech are positioned in the “Niche Players” category.
Gartner’s study is based on direct responses from the customer references given by ERP service providers that work toward delivering high satisfaction to their clients. “Our focused offerings in targeted segments are being valued by our clients,” according to Hexaware Technologies’ Executive Chairman Atul Nishar. The increasing number of its customers — 38 percent growth in the first half of 2007 — in the ERP space also clearly supports the statement and the CEO’s response.
Magic Quadrant ERP Service Providers, North America, 2007
| Quadrant |
Profile |
Players |
| Leaders |
· Have clear vision of market direction
· Actively building competencies
· Can demonstrate and communicate the business value that the clients’ projects.
|
Accenture, Capgemini, CSC, Deloitte, IBM |
| Challengers |
· Have less-defined market direction
· “Up and comers” of the future
· Compete head to head with established brands for deals.
|
BearingPoint, CGI Group, Ciber, Fujitsu, Infosys, Oracle Consulting, SAP Consulting, Satyam, Wipro Technologies |
| Niche Players |
· Focus on a particular segment of the market
· Narrow focus that affects their ability to innovate
· Invest in more defined ERP technology skills
· Have expertise in vertical markets defined by clients.
|
CedarCrestone, Cognizant, HCL Technology Solutions, Hexaware Technologies, Hitachi Consulting, Intelligroup, Lawson Consulting, L&T Infotech |
| Visionaries |
· Articulate important market trends and directions
· May not fully deliver or consistently execute
· Need to improve their optimization and service delivery.
|
|
Source: Gartner
