The development of decision making and management capabilities across the enterprise has become critically important, largely because enterprises are transforming from process driven to information driven. However, there are so many different business analytics offerings that it is getting close to impossible for enterprises to pick a product that will cover all of their bases.
Enter the business analytics services providers. Even here, there are over a hundred such providers according to Gartner. To help enterprises decide on what business analytics (BA) service providers might work for them, it has published, for the first time, a Magic Quadrant for Business Analytics Services Providers.
Business Analytics Services
To be clear about this, business analytics services providers offer enterprises the possibility of developing decision management capabilities, analytics capabilities and information management (IM) capabilities for their enterprise. If there are dozens of BA providers, there are hundreds of service providers.
They partner with clients as advisors and point clients towards fact-based decision-making processes as well as using the decision management capabilities they have established to build BA strategies.
The new Magic Quadrant evaluated service providers of analytics solutions and assessed them specifically on the execution of consulting and implementation services. It also evaluated the total vision provided for business analytics solutions by these providers.
A defining factor in this Magic Quadrant is that service providers demonstrate the ability to implement BA solutions that build upon the products in the market for solutions directed at specific business outcomes.
Out of the hundred plus service providers Gartner has identified 17 that meet its rigorous criteria for inclusion in the MQ. Those 17 can be broken down as follows:
- Leaders: Accenture, Deloitte, IBM GBS
- Challengers: PWC, Cognizant, Capgemeni, Infosys
- Niche: Atos, GI, EY, KPMG, HP ES, NTT Data, TCS, Tech Mahindra, Wipro
Unusually, there are no Visionaries in this quadrant. For the rest:
Leaders: Can provide offerings that meet all market demand and the vision to sustain their position as the market evolves.
Challengers: These providers have a strong ability to execute but need to keep up with evolving global demand and provide services to match.
Niche Players: This is by far the biggest quadrant here. They do well in one segment of the market, but are limited in their ability to innovate because of the high investment demands required to compete.
Developing Digital Business Opportunities
So what is happening in the BA services market at the moment? Just like many other areas of business IT, a convergence in social, mobile, cloud and information management is presenting businesses with new digital business opportunities.
If many business analytics offerings target specific verticals, or businesses, the BA service providers cut across those divisions and impact on all operational, tactical and strategic decisions. In effect, they can be applied across all areas of the enterprise.
Gartner says it is finding that service providers that partner with Gartner’s clients as advisors are using decision management capabilities they have developed or established and which are information driven, to build BA strategies for those clients.
Generally speaking, across the 17 vendors identified, there is a broad breath of analytical capabilities, with differentiation derived from the depth of those capabilities.
Taking all this into account, Gartner has identified three trends, or assumptions, that will impact on BA services:
By 2017 Gartner says that enterprises will be depending on managed service models for as much as 50 percent of their IT needs. Buyers are already looking at managed services for commercial off-the-shelf, or proprietary platforms to simplify the life cycle management of BA functionality.
The rate of adoption of such services is expected to increase as organizations develop a big data mindset that is evolving into a big context mindset as they become aware of the number of information sources that have to be managed.
By 2017 the analytics applications that will be offered by software vendors will be little different than those offered by service providers. According to Gartner, the development of solutions that become industry standards will drive service providers. To this end, there is an attempt to take proprietary software to market. However, for these solutions to be accepted, they will have to come with additional capacities that are part of a wide IT ecosystem.
Gartner also says that it expects service providers to change their offerings to meet market demand. It expects this to become one of the driving forces as the market develops.
By 2017, cognitive AI technology will integrate into business processes and will replace 30 percent of business consulting resources.
If these trends are important, Gartner says that these 17 service providers’ clients are generally pleased with the application and technical skills available from consulting and system implementation providers.
Like all other Magic Quadrant, there is a strict list of criteria that enterprises must meet for inclusion. The current list has be drawn up on their current and potential market impact. The criteria are as follows:
- Presence: Providers can show a visible market presence, or demonstrated interest by potential clients
- Enterprise: Demonstrate that their solutions are supported across enterprise-scale developments.
- Projects: They can show that they can manage and staff BA programs.
- Capabilities: They consistently invest in methodology and internal processes
- Geography: Derive revenues from two of the following three geographies: North America, Western Europe, Japan as well as revenues from two of the developing regions.
- Revenue: They must fulfill the following revenue requirements:
- More than 90 percent of their revenue from BA consulting and annual revenues of $150 million
- Full-service providers are companies with $150 million in annual BA professional services
MQ for BA Services
Given that this is only a developing IT space it is not really surprising that so few made it into the Leaders’ Quadrant. Today we will take a quick look at those Leaders and later at those that fell into the Niche Quadrant and which make up the majority of the 17 companies that feature in it overall. The three Leaders, in alphabetical order are again: Accenture, Deloitte and IBM GBS.
Accenture Analytics is part of Accenture Digital and has a full range of analytics solutions and services for its clients. According to Gartner, the company had revenues of $2.5 billion in global BA revenues last year.
Strengths: Accenture is expanding its execution capabilities through investments in data management scientists, analytics assets and innovation centers. Its ability to offer solutions for most verticals is a big plus. It has built out a broad portfolio of industry-specific analytics along with cross-industry analytics and reporting solutions.
Cautions: Its clients sometimes say that both cost and staffing concerns are an issue so it needs to ensure that financial expectations are clarified from the very outset. Gartner says it is potentially more-suited to larger enterprises, as smaller clients cite concerns about the full-spectrum approach
Deloitte is the global accounting firm that has a huge IT services portfolio. Overall, Gartner estimates that it generated $2.1 billion in global BA services over 2013 and employs 9000 professionals.
Strengths: It has developed a breath of analytics accelerators along with analytics maps, target operating models and solution prototyping. It has built a wide array of industry specific solutions in areas like automatize, banking and consumer packaged goods. Its client’s say that is has good applications and process knowledge that complements its program management.
Cautions: Deloitte’s clients indicate that in some instances its capabilities are not consistent with expectations especially when local resources are required. Its clients also cite price as a challenge but it has developed a number of pricing models.
IBM Global Business Services (GBS) has established a Strategy and Analytics group that houses integrated business strategy, experience design and analytics solutions. Gartner estimates that it had around $3.5 billion in global BA service revenue and approximately 15,000 professionals globally in 2013.
Strengths: IBM GBS combines capacities form its Strategy and Transformation, Business Analytics and Optimization (BAO) and IBM Interactive practice to address the digital challenges businesses are currently facing. It continues to invest in "up skilling" consultants with large investments sin data science, mobile, cloud and cognitive orientated teams. This is coupled with a network for BA centers and global delivery.
Cautions: IBM GBS clients cite challenges to executing projects an occasional problem because of turnover, as well as resourcing and unavailability of local staff. As a result, Gartner recommends that businesses should assess projects on individual basis. Those are the leaders.
Next week we will take a look at the other quadrants.