Everest Group's PEAK Matrix for Digital Services

Everest Group’s PEAK Matrix for Digital Services

Focus on Accenture October 2016

EGR-2016-4-E-1954 Introduction and scope

Everest Group recently released its report titled “Digital Services – PEAK Matrix™ Assessment and Market Trends: “Is Digital the New Normal?”.

As a part of this report, Everest Group analyzed 18 leading service providers on the Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix specific for digital services into Leaders, Major Contenders, and Aspirants. The PEAK Matrix is a composite framework that provides an objective, data-driven, and comparative assessment of digital service providers based on their absolute market success and delivery capability.

Based on the analysis, Accenture emerged as a Leader. This document focuses on Accenture’s digital services experience and capabilities and includes:

 Accenture’s position on the digital services PEAK Matrix

 Detailed digital services profile of Accenture

Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each buyer. Buyers will have to consider their unique situation and requirements, and match them against service provider capability for an ideal fit.

Background of the research  Enterprises are challenged by intensifying competition, uncertain macroeconomic environment, digital-savvy nimble firms, and ever-increasing demands of digital-native consumers. They are leveraging digital technologies to not only tackle these challenges, but also stay ahead of the competition, both current and potential  Responding to enterprise priorities, service providers are rapidly ramping up their digital services portfolio. They have invested in acquiring newer capabilities, realigning their workforce, and developing contextualized solutions to help enterprises in their digital transformation efforts  In this research, we present the assessment and detailed profiles of 18 IT service providers featured on the digital services PEAK Matrix. Each service provider profile provides a comprehensive picture of its service focus, key Intellectual Property (IP)/solutions, domain investments, and recent developments  The assessment is based on Everest Group’s annual RFI process for the calendar year 2016, interactions with leading digital services providers (including product development specialists), client reference checks, and analysis of the digital services market

Scope of this report  Services: Digital services  Geography: Global  Service providers: 18 leading IT service providers

This report includes the profiles of the following 18 service providers featured on the digital services PEAK Matrix:  Leaders: Accenture, Cognizant, IBM, and TCS  Major Contenders: Atos, Capgemini, CGI, CSC, Dell Services, HCL Technologies, Infosys, L&T Infotech, Tech Mahindra, VirtusaPolaris, and Wipro  Aspirants: EPAM, Luxoft, and Syntel

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for digital services - 2016

75th percentile High Leaders Leaders Accenture Major Contenders Major Contenders IBM Aspirants Star Performers TCS

Cognizant

enterprise adoption) enterprise percentile

and and Wipro HCL Technologies Capgemini th Infosys Atos 75 CSC CGI Tech Mahindra Market success Market L&T Infotech VirtusaPolaris EPAM

percentile Aspirants Dell Services th

25 Syntel Luxoft

Low (Digital services revenue, growth, growth, revenue, services (Digital Low 25th percentile High Digital services delivery capability (Scale, scope, domain expertise & innovation, delivery footprint, and buyer satisfaction)

Note: Assessment for Capgemini, CGI, IBM, and Infosys excludes service provider inputs on this particular study, and is based on Everest Group’s estimates which leverage Everest Group’s proprietary Transaction Intelligence (TI) database, ongoing coverage of these service providers, public disclosures, and interaction with buyers. The assessment for CSC excludes the company’s erstwhile North American public sector business, which has been merged with SRA International to form CSRA Inc. Source: Everest Group (2016)

Strengths Areas of improvement

 Accenture leverages its consulting heritage to drive buyers’ digital  Accenture has been cited to be less open to pricing flexibility, though transformation efforts. Its digital practice capitalizes on its global scale some instances of change have surfaced and broad service portfolio to tackle buyers’ core business challenges  It is also perceived to be a latecomer to some market opportunities  Its investments in the design space (acquisitions and hiring) have helped where its peers have established themselves well buyers to procure integrated and holistic offerings Digital services revenue by geography >25% 10-25% <10% Overview of digital services practice: Complete integrated digital business and technology services – digital marketing, mobility, analytics, social and cloud. Offerings support every phase of the digital journey – Europe from developing digital strategies to implementing digital technologies and running digital processes. End-to-end services span everything from strategy, business process, people, organizational change and technology. UK North Digital services: Top 5 industries >20% 15-20% 10-15% <10% America APAC Retail, BFSI distribution, MEA & CPG South America Telecom, media, Energy & Manufacturing & entertainment utilities

Digital services revenue by segment >25% 10-25% <10% Digital services revenue by buyer size >50% 20-50% <20%

Small (annual revenue < US$1 billion) Social Mobility Analytics & big data Medium (annual revenue = US$1-5 billion) Internet Cognitive Cloud applications Large (annual revenue = US$5-10 billion) of Things intelligence Others Mega (annual revenue > US$10 billion)

Source: Everest Group (2016)

Vision: Accenture Digital focuses on helping clients harness digital innovation not only for efficiency gains, but also to generate growth and create new business models that drive higher performance across the entire organization.

Digital services – proprietary solutions (representative list) Solution Details Accenture Marketing ● Interactive marketing software that runs diagnostics of actual performance and investment patterns to generate more accurate Analytics Platform marketing models using multidimensional data processing Analytics Insights ● Comprehensive solution comprising an integrated suite of leading technologies and enterprise support with a pre-configured, Platform (AIP) industrialized, end-to-end architecture to help generate actionable analytics insights Accenture Customer ● Cloud-based managed service for the development, execution, and measurement of digital marketing; helps marketers to Engagement (ACE) deliver engaging customer experiences in a simple, agile, and cost-effective way Accenture Cloud ● Services and solutions designed to help organizations integrate and manage the hybrid cloud environments that span multiple Platform vendor platforms and are critical to providing flexibility and supporting emerging technologies Accenture Connected ● An open architecture platform for the IoT market. Data-driven and designed to run connected applications, CPaaS enables Platform as a Service companies across industries to develop and deploy IoT solutions, using technology from a wide variety of vendors

Design studios / co-innovation labs (representative list) Location Details Multiple locations ● Accenture Digital brings design and innovation capabilities to its clients by leveraging its network of 30 design studios globally, worldwide 5 Advanced Analytics Centers and 13 Accenture Innovation Centers for Mobility ● Accenture has over 20 Innovation Centers that work with clients as applied R&D institutes to innovate and incubate solutions ● Accenture Open Innovation teams with global venture capital firms, with incubators, startups, and accelerators, with the R&D arms of major technology companies, and with leading research universities to help clients to embrace open innovation and proactively brings promising ideas to clients to guide them to adopt industry-transforming innovations ● Accenture’s technology, innovation, and R&D engine: The Labs focus on technology innovation to invent and commercialize new technologies that impact clients and own business; they work in close collaboration with internal and external stakeholders to test and pilot new capabilities and POCs that become service offerings

Source: Everest Group (2016)

Digital services investments (representative list) Investment theme Details Acquisitions ● IMJ Corporation: Acquired a majority stake to strengthen end-to-end digital marketing services ● dgroup: Helps to enhance consulting capabilities around digital transformation, primarily for retail clients ● OPS Rules: Acquired boutique analytics consulting company to boost machine learning and operations analytics capabilities ● CRMWaypoint: Cloud advisory and technology services company to strengthen Salesforce competencies ● Boomerang Pharmaceutical Communications: Digital marketing agency helps to serve pharmaceutical, biotech, and medical device industries ● Tecnilógica: Company specializes in emerging and open source technologies to build innovative omnichannel experiences ● MOBGEN: Provides end-to-end digital mobility services in Europe ● S3 TV Technology: Business unit of S3 Group helps to expand digital video service capabilities Talent ● Invested in skills development by partnering with academic institutions such as Massachusetts Institute of Technology (MIT) and internal training programs ● ESSEC: Conducting business analytics research and developing academic curriculum to train digital architects ● Fjord Immersion program: Connects Accenture’s design talent with academic communities in the Fjord Makeshop environment; immersion students collaborate on design challenges to develop research and physical prototypes

Digital services partnerships (representative list) Partner name Details Accenture has an extensive network of alliance relationships with market leading technology providers including: Salesforce.com, Amazon Web Services, Oracle, SAP hybris, Adobe, GE, Alteryx, Apigee, Cloudera, Hortonworks, HP, IBM, Informatica, Intel, Microsoft, Oracle, Pega, Qlik, Apple, Samsung, and others.

Recent activities (representative list) Activity In addition to recent acquisitions, Accenture Digital is also expanding its network of Digital Studios across the globe, including a recently opened Accenture Interactive Content Studio in New York City and an Accenture Federal Services Digital Studio in Washington D.C.

Source: Everest Group (2016)

Copyright © 2016, Everest Global, Inc. 8 EGR-2016-4-E-1954 Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix is a proprietary framework for assessment of a service provider’s capability

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for digital services 75th percentile High Leaders Top quartile performance across market success Major Contenders and capability 2nd or 3rd quartile performance across market success and

capability

percentile

75 Market success Market

percentile Aspirants th

4th quartile performance 25 across market success and

(Revenue, growth, and enterprise adoption)enterpriseand (Revenue, growth, capability

Low Low 25th percentile High Digital services delivery capability (Scale, scope, domain expertise & innovation, delivery footprint, and buyer satisfaction) Everest Group’s PEAK Matrix is a composite index of a range of distinct metrics related to a service provider’s scale, scope, technology/domain investments, delivery footprint, and resultant market success in the context of a given services function.

Everest Group PEAK Matrix Leaders Digital services revenue Major Contenders Digital services revenue

growth Market success Market Enterprise adoption Aspirants

Delivery capability

Domain expertise Scale Scope Delivery footprint Buyer satisfaction & innovation

IT services revenue Focus across Innovation / IP / Delivery mix Buyer satisfaction service segments proprietary solutions score

Digital services Coverage across M&As, partnerships, revenue verticals and certifications

Geographies served Talent strategy

Does the PEAK Matrix assessment incorporate any subjective criteria?  Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service provider RFIs and Everest Group’s proprietary databases containing providers’ deals and operational capability information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction, and provider briefings

Is being a “Major Contender” or “Aspirant” on the PEAK Matrix, an unfavorable outcome?  No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical services area. There are a number of providers from the broader universe that are assessed and do not make it to the PEAK Matrix at all. Therefore, being represented on the PEAK Matrix is itself a favorable recognition

What other aspects of PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK Matrix position”?  PEAK Matrix position is only one aspect of Everest Group’s overall assessment. In addition to assigning a “Leader”, “Major Contender” or “Aspirant” title, Everest Group highlights the distinctive capabilities and unique attributes of all the PEAK Matrix providers assessed in its report. The detailed metric level assessment and associated commentary is helpful for buyers in selecting particular providers for their specific requirements. It also helps providers showcase their strengths in specific areas

What are the incentives for buyers and providers to participate/provide input to PEAK Matrix research?  Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment  Participation incentives for providers include adequate representation and recognition of their capabilities/success in the market place, and a copy of their own “profile” that is published by Everest Group as part of the “compendium of PEAK Matrix providers” profiles

What is the process for a service provider to leverage their PEAK Matrix positioning status?  Providers can use their PEAK positioning rating in multiple ways including: – Issue a press release declaring their positioning/rating – Customized PEAK profile for circulation (with clients, prospects, etc.) – Quotes from Everest Group analysts could be disseminated to the media – Leverage PEAK branding across communications (e-mail signatures, marketing brochures, credential packs, client presentations, etc.)

 The provider must obtain the requisite licensing and distribution rights for the above activities through an agreement with the designated POC at Everest Group

Everest Group is a consulting and research firm focused on strategic IT, business services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility, and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem- solving skills and original research. Details and in-depth content are available at www.everestgrp.com.

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