Magic Quadrant for SAP Implementation Service Providers, North America

There are several hundred service partners in the SAP ecosystem in North America. This Magic Quadrant assesses 20 of the leading providers. Each provider has its own unique strengths and weaknesses, and each is more suitable for some types of engagements and some clients/industries than others. Many capable providers, not included in this study due to our inclusion criteria and methodology, may be a better fit for specific SAP implementation projects, depending on module, resourcing objectives, size of project and other factors. These include (but are not limited to) ABeam Consulting, AspireHR, Bristlecone, CGI-Logica, Clarkston Consulting, EPI-USE, Fujitsu Consulting, Grupo ASSA, Hitachi Consulting, iGate, Lodestone Management Consultants, Neoris, NorthgateArinso, Politec, ROC, Softek, Systech Integrators and Yash Technologies.

This Magic Quadrant focuses on SAP implementation services that include consulting, system integration and implementation for North America. This study covers these types of professional services related to all SAP application software. Implementations of SAP applications may be first-time implementation, upgrades, rollouts, consolidations or any combination thereof for any version.

This study does not cover services related to application outsourcing, managed services or business process outsourcing (BPO) — but these capabilities are considered insofar as they influence the choice and ability of the vendor to provide project implementation services.

We evaluate the comprehensive set of offerings for SAP programs that include:

• Ability to provide consulting services for SAP environments
• Ability to provide a comprehensive set of system integration and implementation services across SAP applications, products and technologies
• Ability to service multiple industries

For this report, we use the following definitions:

• Consulting services are advisory services designed to help companies analyze and improve the effectiveness of business operations and technology strategies. These go beyond technical blueprinting to include operating model changes, business process improvement, standardization and harmonization of processes, and so forth. They also include program management, change management and governance.
• System integration and implementation services include configuration, customization and enhancement of existing SAP functionalities; application, report and interface development; and data loading, rollout, integration, testing and training services.
• North America — This Magic Quadrant evaluates service providers of consulting and implementation services on their capabilities to successfully implement SAP applications for buyers of North American companies. "North American companies" refers to companies domiciled in the U.S. and Canada. In many cases, a North American client will have subsidiaries in other geographies that are included in the remit of the SAP program. The ability to service such needs is taken into account in the evaluation.

Gartner evaluates service providers on their ability to execute and their completeness of vision. Evaluation is informed by:

• A total of 224 client references supplied by the evaluated service providers
• Service provider's representation of its organization through briefings, press releases, annual reports and other publicly available information
• Gartner clients with whom Gartner analysts have discussions throughout the year

Note: This Magic Quadrant is not an update of the 2010 "Magic Quadrant for SAP ERP Implementation Service Providers, North America." The focus of the 2010 Magic Quadrant was ERP implementation; this 2012 Magic Quadrant covers all SAP applications. As such, this is essentially a brand-new Magic Quadrant rather than an update of the previous one.

Source: Gartner (July 2012)

Vendor Strengths and Cautions

Accenture

Accenture, an SAP Global Services Partner, has the largest SAP team, with 36,500 professionals worldwide. Of these, nearly 7,000 are based in North America, supported by more than 16,000 in its global delivery network. Its investments in SAP include 10 innovation centers globally by fiscal 2012. These innovation centers focus on industry-specific analytics, mobility and cloud solutions.

Strengths

• Accenture is one of a small number of service providers with the depth and breadth of capabilities to implement large, complex SAP-enabled transformational initiatives for the largest companies.
• An ability to bring together capabilities from different parts of Accenture to bear on complex SAP programs results in strong business process, industry and change management expertise that complement its SAP application knowledge and a solid well-tested methodology that includes business value realization activities and deliverables.
• Accenture has invested heavily in improving the quality and reducing the cost of implementation through increasing offshore leverage and creating software factories, methods, tools and asset libraries, including technical libraries, global requirements tools and the Accenture Advanced Enterprise Solution (AAES) framework. AAES contains industry business process models for 11 industries, with drill-down to the transactional level and accelerators to jump-start implementation and reduce overall effort and therefore cost.
• Nine industry- and role-specific "Day in the Life" scenarios in innovation centers demonstrate thought leadership in High-Performance Analytic Appliance (Hana) and mobility, and they show clients how to leverage the value of these technologies. It recently committed to train up to 1,000 professionals skilled in Hana solutions by the end of 2012 and is also committed to a dedicated R&D capability in its innovation centers to develop new applications, new tools and best practices for the SAP database platform.

Cautions

• Accenture's strategy is to serve its target clients extremely well. These target clients are typically, but not always, the largest global companies. Companies not in these categories should perform due diligence to ensure satisfactory resource quality and senior-level attention. Also, clients in Accenture's core industries of consumer, oil and gas, chemicals, utilities and energy, retail, federal government, industrial, and metals and mining will likely gain more benefits from investments and availability of assets for SAP implementation than clients from other industries.
• Clients have noted that Accenture sometimes underestimates the level of effort required for projects and that Accenture can do a better job of knowledge transfer.
• While Accenture does well in delivering solutions that meet clients' needs, its own need for revenue growth and return on its investments in SAP-related assets has led some clients to comment that account teams can oversell services and solutions. Clients are cautioned to examine the proposed services and solutions for alignment with their business goals.

Atos

Atos Origin announced the acquisition of Siemens IT Solutions and Services (SIS) in December 2010. In July 2011, the acquisition was formalized, and Atos Origin changed its name to Atos. Through SIS, Atos has extended its country coverage in North America, but the main markets of both heritage companies are in Europe. The combined entity has nearly 10,000 SAP-skilled professionals, of whom about 300 are based in North America and about half are in global delivery centers. Atos is an SAP Global Services Partner, Global Application Management Services Partner, Global Hosting Partner, SAP Large Enterprise License Sales Partner (EMEA) and SAP global value-added reseller. Atos' position in the Niche Players quadrant reflects its relatively small size in the U.S. and consequently a bench that has some difficulty staffing large projects appropriately.

Strengths

• Atos is able to provide the full life cycle of SAP services, from consulting and implementation to managed services and hosting.
• Atos' main industries are manufacturing, the public sector, and energy and utilities. It has invested in industry solutions in subsegments of these industries, such as water, utilities, automotive, food and beverage, healthcare, chemicals, and pharmaceuticals. In particular, Atos is strong in manufacturing execution systems (MES), manufacturing integration and intelligence (MII), and chemicals.
• Atos has invested in and has more than 10 years of experience with large and complex consolidation and harmonization programs (including design, implementation, rollout, and functional and technical upgrades). This strength is being carried over to North America for its global clients.
• Atos is investing in innovation. Examples include a mobile solution for SAP Environment, Health and Safety Management that gives workers access to up-to-date safety information in critical circumstances and when no network is available and also a Hana business intelligence (BI) on-demand solution.
• Clients consider Atos' willingness to adapt to changing client demands, knowledgeable key consultants and commitment to project success as key strengths.

Cautions

• While Atos is globally among the largest SAP service providers, it is a fairly small and relatively unknown player in North America that is still developing a solid base of project-related references.
• Atos focuses on a limited number of industries, which is a strength in terms of focused investments and capability development, but it also makes Atos a poor fit for companies outside these industries.
• Atos' bench in North America depends more (than in Europe) on third-party consultants for staff augmentation. In some cases, this creates challenges finding the right qualifications on time and at the most competitive price.

Capgemini

Capgemini has 11,500 SAP-skilled professionals, of whom 2,200 are based in North America and 3,440 are in global delivery centers. It is an SAP Global Services Partner, Hosting Partner, Cloud Services Partner, Run SAP Partner, Global Application Management Services Partner, SAP PartnerEdge Channel Partner and Business-All-in-One reseller.

Strengths

• Capgemini serves both the midmarket and large enterprises, and it is able to offer a complete set of life cycle services: design, implement, application management and hosting through BPO. Its key vertical markets in North America are consumer products, retail, and energy and utilities.
• Capgemini has stepped up its investments in its SAP practice significantly in the last 18 months. Major investments have been made in mobility, including being a strategic mobile development partner for SAP Business ByDesign, and for SAP CRM and ERP, co-developing a mobile sales execution application for the consumer products industry. It has also invested significantly in industry frameworks, such as the comprehensive consumer products Demand Driven Enterprise Framework that helps clients optimize localized category planning, trade spend effectiveness and supply chain synchronization. It continues to strengthen its preconfigured solutions in human capital management and procurement, as well as in the oil field service and drilling, consumer goods and retail, and medical device industries. Capgemini has also overhauled its SAP implementation methodology to embrace the eight lean principles and methods for more efficient and value-driven work.
• Capgemini continues to innovate on delivery and pricing models that offer clients different alternatives to buying and paying for SAP systems. It is evolving its SAP portfolio of solutions to an "as a service" model, including procurement (leveraging its IBX acquisition), Afaria, SAP (Sybase) Unwired Platform (SUP) and several of its industry solutions, with monthly pricing for bundled software licenses and services from its private cloud environment.

Cautions

• Capgemini can do a better job of aligning its various practices — hosting, application management, support and implementation teams — into a coordinated enterprise. Clients that want one point of accountability can find this lack of tight coordination frustrating. To address this, Capgemini has made strides in the past 18 months to align its organization to better serve its clients, such as combining different practices into a single Application Services unit.
• While Capgemini has some resources with good business consulting and/or industry expertise, the composition of project teams do not always include such resources. Capgemini is addressing this by hiring skilled employees with strong business acumen and converting them into consultants. Clients looking for Capgemini to bring these to the program should make their needs clear before embarking on the program.
• While its collaborative style is appreciated by clients, Capgemini is sometimes reluctant to take a more decisive position in situations where there are competing interests, which can prolong the decision making.

Cognizant

Cognizant is one of the fastest-growing professional services firms. It is based in the U.S. but known for its India-based offshore model. Cognizant has 5,500 SAP-skilled professionals, 1,320 of whom are based in the U.S., supported by more than 3,700 resources in global delivery centers. It is an SAP Global Services Partner, an SAP-certified Global Application Management Services Provider and an SAP-certified Global Hosting and Cloud Services Provider.

Strengths

• Cognizant's SAP practice has enjoyed strong growth due to a combination of strategies, including strong account management and concentrating on select verticals — retail, consumer packaged goods (CPG), life sciences, media and entertainment, and manufacturing and logistics — which allows it to focus its investments and build strengths in these verticals.
• Acquisition of Zaffera in 2011 brought Cognizant about 100 retail-industry-focused SAP consulting professionals, as well as a portfolio of SAP solutions and accelerators in areas such as master data, retail planning, point-of-sale integration, and store operations, strengthening Cognizant's SAP retail practice.
• Cognizant has strong SAP product and technical skills, enabled by many prebuilt tools and accelerators, as well as point solutions in highly targeted spaces, such as a trade promotion optimization solution for CPG, a merger-and-acquisition playbook for the life sciences industry, and royalty management for media/entertainment clients.
• Clients are impressed by Cognizant's flexibility, value for money and ability to bring methodologies, tools, templates, frameworks and prebuilt solutions to the engagements. Cognizant has one of the highest overall customer satisfaction scores among the group of service providers in this study.

Cautions

• Outside its focused industries, Cognizant has limited industry and process skills. It is most mature in retail, CPG and life sciences; it is developing capabilities in media/entertainment and manufacturing/logistics.
• Cognizant continues to round out its capabilities to provide the full set of competencies for a complete implementation of a large-scale engagement.
• Clients observe Cognizant consultants as being too accommodating and not assertive enough to push back requests even when such requests risk challenging the objectives of the program.

CSC

CSC has more than 6,000 SAP-skilled professionals. Of these, 1,500 are based in North America, supported by 1,200 in global delivery centers. CSC is an SAP Global Services Partner, Global Applications Maintenance Partner, Global Hosting Partner, Cloud Services Partner and All-in-One Partner.

Strengths

• CSC has been focusing on building capabilities and solutions by industry. Its investment focus is in the public-sector, aerospace and defense, chemicals, food, and communications industries. In the public sector, CSC has performed some of the most complex engagements for several U.S. government agencies, including the U.S. Army's Logistics Modernization Program. It is also investing heavily in mobility, BI (including Hana) and sustainability.
• In line with CSC's overall direction in embracing cloud, the CSC SAP practice has offerings in cloud services, including hosted cloud infrastructure for SAP and different flavors of as-a-service offerings, including hosted SAP Mobility SUP, Afaria as a service and an on-demand ABAP factory. This gives clients an alternative way to consume their services commensurate with the advantages of cloud computing.
• Its ability to provide the full life cycle of implementation through hosting, support and maintenance makes it an attractive partner for clients looking for a full-service provider.
• Clients point to its flexible, collaborative work style and implementation methodology as key strengths.

Cautions

• CSC's SAP implementation experience in the commercial sector does not match its public-sector experience in very large implementations.
• CSC does not have a strong presence in healthcare delivery, CPG (except food and beverage) and financial services. CSC has little presence in state and local government SAP programs.
• Clients suggest CSC can improve on its capability to work across its organization to leverage skill sets and its ability to bring best practices and ideas to SAP engagements. CSC, however, is already working to simplify its internal operating model to address this issue.

Dell Services

Dell Services grew out of Dell's acquisition of Perot Systems. Dell Services has more than 750 SAP professionals worldwide. Dell is an SAP Global Technology Partner, Services Partner, Global Cloud Partner, Global Hosting Partner, Special Expertise Partner and Run SAP Partner. Dell Services' position in the Niche Players quadrant reflects its smaller size, its focus on the midmarket, and its relatively small practice in CRM and supply chain management (SCM).

Strengths

• Dell Services has some attributes of a global service firm but with a focus on midmarket clients. Especially for midmarket clients that require rollout support to multiple countries, Dell Services provides a viable alternative to Tier 1 providers that tend to focus their attention on large companies.
• By industry, Dell Services is strongest in manufacturing but is also a solid contender in education and state and local government. Dell Services is also investing heavily in mobility and analytics solutions for these industries, including a student retention Hana solution for higher education institutions that integrates with social media information.
• Dell Services has also developed a strong set of offerings in SAP modernization, which includes upgrades as well as migration to newer, lower-cost platforms, including Dell's.
• Clients are impressed by Dell Services' skill and attitude toward problem resolution, its teams' capabilities and its ability to engage business users.

Cautions

• Dell Services does not have the scale and scope to assist with very large programs that require a big bench — nor is this a target market for the company.
• Dell Services' offshore leverage is still light. It has room to increase the proportion of work from its offshore delivery.
• Because of its moderate size and SAP's vast portfolio, Dell Services struggles with some niche skills and has a light bench on others.

Deloitte

Deloitte has more than 9,500 SAP-skilled professionals worldwide. Nearly 4,000 are in North America, supported by more than 2,800 people in global delivery centers. Deloitte is an SAP Global Services Partner and an SAP-certified Cloud Services Provider.

Strengths

• Deloitte has multiple competencies that it can draw on to assist an SAP-enabled business transformation. These competencies include strategy and operations, technology, human capital, tax, and enterprise risk services, and they can be brought on to provide a holistic solution.
• Deloitte is increasingly experienced in very large multiyear programs to harmonize clients' businesses and standardize their processes. Their relationship with C-level executives improves the necessary commitment from these executives to successfully deploy such multiyear programs.
• It has also made big strides in its global delivery, enabling it to leverage global talent at competitive rates.
• Deloitte continues to be strong in finance transformation, enterprise performance management (EPM), business planning and consolidation (BPC), and governance, risk and compliance (GRC). It has also invested heavily in Hana as well as in mobility.
• Clients find Deloitte's industry-based approach and Enterprise Value Delivery methodology, a project methodology designed to unlock maximum value while managing risks in projects, highly beneficial in their SAP-enabled business transformation journey.

Cautions

• Deloitte is recognized for its collaborative culture that is flexible and collegial. Organizations that require a system integrator (SI) to impose a prescriptive approach to push an agenda should make their needs clear to the Deloitte team at the beginning of the program to assure discipline and rigor.
• Deloitte's strength in providing multiple competencies to bear on a program and bias toward business consulting make it less suitable for clients looking for an integrator to solve basic technical upgrades or vanilla implementations.
• Clients have suggested that Deloitte can improve on its infrastructure expertise, such as performance tuning and capacity planning.

Ernst & Young

Ernst & Young (EY) is a re-entrant to the SAP project service market. It is rebuilding its consulting and implementation services after having sold off this business to Capgemini in 2000. EY now has 2,500 consultants with SAP experience, about half of whom are based in North America. EY is an SAP Services Partner. It has a deliberate strategy of focusing on specific segments in the SAP service market that lend themselves to its core traditional strengths. EY's position in the Niche Players quadrant therefore reflects its strong capabilities in a few select areas of the SAP application service market.

Strengths

• As a relatively new re-entrant, EY is building off areas in the SAP implementation space where it has traditional strengths. These include finance performance improvement, planning, budgeting, forecasting and management reporting, implementing GRC and BPC, and tax-effective SCM.
• EY is strong in advisory services in areas such as program and risk management, process improvement in finance and supply chain, and regulatory compliance.
• Since EY does not provide end-to-end services in SAP, it has developed good partnering approaches. Clients report that EY works well with third parties and is also a good provider of independent oversight of large-scale SAP implementations by other third parties.
• Clients' feedback indicates that EY consultants demonstrate deep industry and process knowledge, including knowledge of the software functionality, and display a keen understanding of what it takes to make an SAP program successful.

Cautions

• EY does not provide what it considers "commodity" activities during the implementation life cycle, such as ABAP and other development work, so it does not maintain these resources and capabilities in-house to implement a full-scope SAP program, except in specific niches. Instead, EY utilizes partners for such activities but is responsible for managing the project.
• Clients reported EY as being a higher-cost provider due to its limited offshore play, its use of experienced consultants, a high-touch approach and its high-end value proposition.
• As a consequence of its higher price and focus on process improvement, EY is not a suitable candidate for more vanilla implementations unless partnered with a client's existing or other third-party service provider.

HCL Axon

HCL Axon is the enterprise application division within HCL Technologies, which acquired U.K.-based SAP specialist Axon in 2008. The Axon name is retained to capitalize on Axon's strong SAP heritage in consulting and implementation. HCL Axon has 6,000 SAP-skilled professionals, with more than 1,800 based in North America supported by another 3,600 in global delivery centers. HCL Axon is an SAP Global Services Partner.

Strengths

• HCL Technologies' acquisition of Axon enables it to offer the full life cycle of SAP services, from consulting through implementation, infrastructure optimization, and ongoing managed services and support, leveraging a global delivery model. HCL Axon has broad capabilities across most SAP products, including newer solutions, such as analytics, mobility and cloud services.
• One of the first service partners to embed formal benefits realization methodology into SAP program delivery, HCL Axon works with clients to deploy solutions with tangible business benefits, enabled through a comprehensive set of processes, including identifying business benefits and converting these benefits into quantifiable financial gains, as well as ensuring decisions made during implementation are aligned with business benefits identified — thereby maximizing the potential for the program to achieve its desired business value. Its willingness to put "skin in the game" through tying a portion of its fees to the realization of identified benefits attests to its confidence in its methodology.
• HCL Axon is able to bring SAP-based products to client engagements, complementing the core SAP software. HCL Axon has developed several solutions, two of which are iMRO, an SAP-endorsed, upgrade-compatible industry solution add-on for the SAP ERP application, and iCREW, an HR solution for managing highly unionized workforces. It also has a rich set of templates and accelerators to speed delivery.
• HCL Axon has a particular focus and strength in aerospace and defense, high tech and manufacturing, utilities and energy, and travel and transportation, and it serves clients of all sizes, with preconfigured solutions for the midmarket and global resources for the largest clients.
• HCL Axon has one of the highest overall customer satisfaction scores among the group of service providers in this study.

Cautions

• A few clients have experienced problems with staffing, such as attrition and difficulty finding consultants with niche skills. Such issues, however, have not (thus far) materially impacted project performance or overall customer satisfaction.
• While flexibility is a good trait, HCL Axon could be more assertive in issues such as scope management, which has negatively impacted client's perception of its project management capabilities.
• While HCL Axon has very strong SAP knowledge and development capabilities, its business acumen, such as deep industry knowledge, the ability to engage with business leaders, and proactiveness in bringing new ideas and suggestions to the table, is somewhat more limited than that of its leading competitors and can be improved.

HP Enterprise Services

HP Enterprise Services (ES) has more than 8,500 SAP-skilled professionals, and nearly 3,000 are based in North America. HP ES is a Global Services Partner, SAP-certified global provider of cloud services and a Global Run SAP Partner.

Strengths

• HP ES offers a full life cycle set of offerings for SAP that includes everything from design and implementation to maintenance, support and hosting services.
• For clients that already use HP Services for IT outsourcing, HP ES brings to an implementation project a level of understanding of clients' IT environment and business processes that allow for a faster and more aligned solution, in addition to an understanding of clients' culture and work style. Also, large profitable existing clients are strategically important to HP, and this provides the incentive for HP ES to deliver a quality solution. Its run services allow clients and HP ES to be jointly responsible for achieving the identified business benefits.
• Renewed focus on enterprise services by HP ES has elevated investments in SAP, resulting in improving capabilities (both onshore and offshore) and asset-building (including vertical solutions and solutions built on the new technologies of cloud, Hana, mobility and social media) to accelerate and industrialize solutions, as well as to drive value.

Cautions

• Clients have observed that HP ES has some gaps in implementation capabilities for some products in the SAP stack, and it can improve on proactively identifying issues and solutions, as well as bringing ideas and innovation to the table.
• While HP ES works well with different SIs, coordination among its different practices — such as its outsourcing group, infrastructure group and implementation team — can be better. Clients have observed a less-than-seamless handoff between groups.
• HP's strategy is to help clients accelerate speed to value through various innovations, including bundled offerings. Sometimes this includes HP products, software and services. For example, some of its Hana offerings include services and software preloaded onto an HP appliance. While this may convey speed and/or cost advantages, clients should understand the implications of such bundled offerings on their IT environments.

IBM Global Business Services

IBM's SAP practice employs more than 25,000 SAP practitioners in 80 countries. An estimated 5,000 SAP-skilled professionals serve clients in North America, supported by more than 15,000 in 23 global innovation and delivery centers. IBM is an SAP Global Services Partner and has SAP certifications in technology, hosting and cloud services. Gartner estimates show IBM to be the largest SAP SI in North America by revenue in 2011.

Strengths

• IBM has the depth and breadth of technical, functional and process capabilities across a large number of industries, as well as the global reach for the largest and most complex global implementations, including its own Blue Harmony global harmonization single SAP instance program. In addition, it also offers packaged offerings for smaller clients.
• IBM has an impressive collection of assets and tools to accelerate time to value and standardize SAP implementations, including best practices collected from a large base of past engagements and systematized into reusable asset libraries. Examples are SAP industry templates and midmarket solutions, process models, asset libraries, best-practice generators, discovery tools, industry solution maps, and innovation scenarios leveraging visualization tools — all integrated with SAP Solution Manager.
• IBM has 2,000 SAP analytics specialists in its SAP practice, in addition to the 9,000 business analytics and optimization (BAO) consultants who reside in its BAO service line. They cover the full spectrum of BI services, complemented by IBM Research in mathematical sciences to tackle predictive ("what if") and prescriptive ("how can I achieve the best outcome?") analytics.
• IBM showcases its practical thought leadership and industry expertise by proactively developing solutions that take advantage of the power of Hana and mobile technologies to tackle specific industries' most difficult pain points, such as how to avoid unplanned downtime and get the most out of the expensive equipment in the oil and gas industry.

Cautions

• Insurance, healthcare and education are emerging verticals for IBM's SAP practice. Although significant investments are being made to grow capabilities and resources, assets and experience in these verticals are not as deep as in other verticals.
• A few clients have reported challenges dealing with IBM's vast internal landscape and processes, leading to delays in getting changes and obtaining the right resources.
• While IBM has organized to serve midmarket clients efficiently and cost-effectively with standardized methodologies and reusable assets, midmarket clients that need significant deviations from its standard approach may not benefit from IBM's investments in such intellectual capital.
• A few clients have cited challenges in project team resourcing as resources appear to be tight in the current market.

Infosys

Infosys has more than 9,000 SAP-skilled professionals, of whom more than 4,200 serve clients in North America. Infosys is an SAP Global Services Partner, SAP BPO Partner, Ramp Up Partner and SAP Technology Partner.

Strengths

• Infosys is the largest offshore-centric player in the SAP implementation space. It has a good track record of growth and is becoming more experienced in large SAP implementation and SAP business transformation programs at some of the largest companies.
• It is improving its vertical expertise and has reorganized the majority of its SAP professionals to align with vertical practices, while a core of horizontal practitioners focus on service differentiation, intellectual property (IP) and new service offering development. Key industries that Infosys focuses on and has built vertical solutions for are retail and CPG; manufacturing; life sciences; energy, utilities, oil and gas; professional services; high tech; and banking.
• Infosys has made major investments in newer areas (mobility, Hana, analytics and cloud), as well as new modules, such as trade promotion management (TPM). It has co-development agreements with SAP on several initiatives, such as mobility (SAP Retail Execution), and it collaborates with SAP on client proofs of concept (POCs) in TPM and Hana.
• Heavy focus on its value realization model throughout the implementation life cycle increases the probability of program success and aligns SAP programs with desired business outcomes. Willingness to sign up for outcome-based pricing based on value realization resonates with buyers, even if not always taken up.
• Clients agree Infosys has strong delivery capabilities and mature processes, as well as on- and offshore capabilities to support their SAP programs.

Cautions

• While Infosys has taken significant steps to improve its consulting, advisory and industry expertise, it is still a work in process in ensuring that these capabilities become pervasive among project team members where the value gets realized in SAP client programs.
• Due to a combination of factors that include high utilization and a bench that isn't deep enough, clients have observed that Infosys sometimes has difficulty bringing in the right subject matter experts in a timely manner when required.
• A few clients have commented that, with its wealth of experience from past engagements, Infosys can be more assertive in providing ideas and recommendations.

L&T Infotech

L&T Infotech is the IT services subsidiary of the Indian conglomerate Larsen & Toubro. It has more than 2,700 SAP-skilled professionals, of whom more than 400 are in North America, supported by resources in global delivery centers. It is an SAP Global Services Partner, a certified SAP Application Management Services Partner, a PartnerEdge Service Partner and a certified SAP Software Integration Services Partner.

Strengths

• L&T Infotech has highly capable technical skills in SAP implementation and leverages the business knowledge of its parent company in defined sectors; namely, engineering, manufacturing, construction, oil and gas, and financial services. It has also served long-standing clients in the CPG and wholesale distribution industries and is making inroads into the life sciences and media and entertainment industries.
• It has developed industry-specific preconfigured solutions for utilities, oil and gas, manufacturing, insurance, and ports and transportation/logistics, as well as process-based solutions in procurement; finance; inventory management; and environment, health and safety.
• L&T Infotech is investing in capabilities and assets in emerging areas. It has invested in more than 30 readily deployable mobile applications on SUP and its own homegrown mobile platform. It is also building competencies and working with several clients on Hana POCs and deployment, as well as incubating software-as-a-service-based Hana service offerings for key clients.
• Clients described L&T Infotech as highly focused on quality delivery, flexible and committed to client success.

Cautions

• The majority of L&T Infotech's experience is in executing discrete SAP work streams, such as rollout of regional/global templates, master data implementation, financial reporting, and testing or upgrades, rather than large-program execution. It is, however, enhancing its large-program execution capabilities through initiatives such as its Corporate Project Management Office and building governance and organization change management capabilities, and it has executed a few full-scope SAP program implementations, including process harmonization and re-engineering exercises, and is building scale to deliver more such programs.
• Its delivery model is highly offshore-centric, with a fly-in model to meet onshore requirements. This model has limitations that L&T Infotech is addressing by investing in onshore captive capability through local hires and establishment of nearshore development centers in the U.S. and Canada to supplement implementation project needs.
• Clients suggest that L&T Infotech consultants can be more proactive in coming up with improvement suggestions; when asked, they are often able to give good suggestions. To address this, L&T Infotech has piloted a Thought Partnership program for its top three clients to proactively identify and propagate value-creation opportunities across business process, technology and program execution, which has gained some traction.
• Clients suggest L&T can improve on its communications skills and organizational change management capabilities. To address this, L&T Infotech is investing in specific programs to provide advanced communications training for resources who are on the frontline to better connect with customers and manage change.

NTT Data

NTT Data, a $13.7 billion Japanese IT services firm, has more than 5,400 SAP-skilled professionals worldwide, of whom about 1,000 consultants are based in North America. The North American SAP practice of NTT Data has been formed through acquisitions of several companies, the largest of which are Intelligroup, itelligence and Keane. Its SAP Global One initiative aims to bring under one umbrella all the SAP resources within the NTT Data Group of companies. Its Americas region completed a reorganization in April 2012, while the rest of the group will reorganize by the end of 2012 (see "Vendor Focus for NTT Data's Global SAP Services: An Example of Japanese Competitiveness in the Worldwide Market"). NTT Data is an SAP Service Partner, SAP Business All-in-One Reseller and SAP Business Objects Reseller.

Strengths

• Since the acquired companies focused on different segments of the market, NTT Data now has offerings to serve companies of all sizes, ranging from small to large. For small to midmarket clients, NTT Data is able to provide end-to-end solutions, including advisory, implementation, application management and hosting solutions.
• The combined entity of nearly 5,400 SAP-skilled professionals gives clients a deeper bench. Clients have also observed some ability in bringing in resources from other groups within the NTT Data family to supplement or augment current programs. With a family of acquired entities in different countries, NTT Data is also better able to service global clients in some geographies.
• NTT Data is very strong in upgrades, with a full suite of proven automation tools to accelerate implementation and provide consistent delivery at competitive rates for large and midmarket clients. In addition, NTT Data has continued to invest in industry solutions and now has 16 industry All-in-One solutions for midmarket and smaller clients.
• Clients cite NTT Data's flexibility in resourcing, addressing issues and adapting to changing business needs; strong technical and software expertise; and customer-focused attitude as strengths.

Cautions

• Although improving, NTT Data's large-project-management capability is still developing, and it has a relatively small bench of professionals experienced in comprehensive SAP implementations. NTT Data, however, is investing in these capabilities and already does well in discrete work streams (for example, supplier relationship management, BusinessObjects upgrades and Enhancement Pack implementation).
• While clients are pleased with NTT Data's capabilities in implementing SAP applications, they suggest that the company could improve its consulting and industry capabilities, as well as its project management and organizational change management skills. The Revere Group (another acquired company in the NTT Data family that provides industry, process and technology expertise) resources are beginning to engage and should help, but so far leverage of these resources appears spotty.
• Although the combined capabilities of multiple acquired companies present NTT Data clients with a full lineup of skills for an end-to-end SAP program, integration of the companies' methodologies and tools, cross-training, and cross-pollination of cultures are not yet apparent at the project team level. Capabilities of consultants still tend to align with each of the legacy companies' traditional strengths, but there is some evidence that the integration of all the acquired companies is moving into a holistic resource pool.

Optimal Solutions Integration

Texas-based Optimal Solutions Integration (Optimal) is a fast-growing specialist SAP service firm that provides consulting, implementation, staffing and managed services across the full range of SAP solutions. With about 850 SAP-skilled professionals, Optimal primarily serves clients in the U.S. Optimal is a Premier SAP Services Partner, Gold Level SAP Business All-in-One Partner, a Gold Level SAP BusinessObjects Partner, a Run SAP certified partner and a Sybase partner.

Strengths

• Optimal brings strong skills in select areas to large clients, principally EPM, BusinessObjects planning and consolidation, analytics, mobility and SAP Hana. Optimal is also a full-service provider of end-to-end ERP implementations to midmarket and upper-midmarket clients.
• Optimal invests in thought leadership and innovation that explore issues around the SAP product suite. For example, clients can test out SAP software in its Optimal Labs, which contains more than 40 distinct SAP instances, multiple configurations of SAP BusinessObjects, Sybase technology and SAP Hana. Optimal also has 15 preconfigured solutions and numerous packaged services to accelerate timelines, reduce project costs and mitigate risks for clients.
• Optimal's acquisition of Glenture in 2011 augments Optimal's strengths in EPM. Glenture was an OutlookSoft (a software company acquired by SAP, whose product is now renamed BusinessObjects Planning and Consolidation) partner and brought strong capabilities in BPC. In particular, Optimal has co-invested with SAP in EPM for the banking and insurance vertical.
• Optimal has solid experience in the CPG; metals and mining; retail and apparel and footwear; financial services; and public-sector industries. It is one of a small handful of SIs with good experience implementing SAP Public Budget Formulation, a relatively new product introduced in 2009.
• Clients cite its flexibility in response to changing business requirements, experienced consultants, and technical and product expertise as key strengths.

Cautions

• Because Optimal is a fast-growing company, its ability to staff projects is stretched thin when there are multiple engagements requiring the same resources.
• Although Optimal is expanding globally, it has limited client presence outside the U.S.
• Clients suggest Optimal can improve on its project management and communications.

PwC

PwC is a global network of member firms that provide industry-focused assurance, tax and advisory services. It is rapidly rebuilding its SAP implementation capabilities, having sold its consulting business to IBM in 2002. In 2011, PwC grew its SAP revenue and head count nearly 50% and now has 4,500 SAP-skilled professionals, with 1,500 of them based in North America, supported by more than 500 in global delivery centers. PwC achieved the SAP Global Services Partner status — the highest partnership level — in 2011.

Strengths

• PwC has the clout and access to the CxO suite (especially with CFOs), which positions it well to lead large-scale enterprisewide transformational projects that require the involvement and buy-in from the CxO office.
• PwC takes a business transformation approach to its SAP engagements and is able to bring together strategy, industry, process, tax and software expertise to bear on a program. It emphasizes putting process improvement and best practices before system- level decisions, which makes it a clear fit for SAP change programs.
• Particular areas of strengths are EPM, enterprise asset management (especially in the nuclear industry), finance transformation, BusinessObjects planning and consolidation, and GRC. Key industries where it has experience and is focusing its investments in are discrete manufacturing, high tech, chemicals, retail and CPG, pharmaceuticals and life sciences, and utilities.
• Clients' feedback indicates that PwC brings strong program management and change management capabilities to SAP engagements, and they appreciate that PwC consultants come to the table with specific points of views informed by industry and process expertise.

Cautions

• With PwC as a relative newcomer to the implementation space and because the SAP portfolio is so broad, clients have commented that PwC has resource gaps in some newer SAP products.
• PwC is not a good fit for clients with SAP projects that are mostly IT implementations, such as upgrades, or vanilla installations of software that do not require a combination of business and process competencies.
• Because of its limited bench strength, higher cost and limited offshore resources, PwC is also not a good fit for the realization phase of the largest-scale programs, although it is highly suitable for the blueprinting phase of these largest-scale programs because of its process and consulting strengths.

SAP Consulting

SAP Consulting, the services arm of SAP, delivers SAP implementation services through more than 14,000 consultants globally, with about 2,500 in North America. Although it continues to provide prime integrator services that compete directly with its SI ecosystem, SAP Consulting is changing to realign more closely with SAP's overall strategy by focusing on high-value expert services, supporting adoption of SAP innovations, and productizing services for rapid deployment and cost containment.

Strengths

• SAP Consulting has developed a full spectrum of services that allows clients to buy the services most relevant to their needs — expert services for hard-to-find software consultants, services to assist in adoption of new products, package services (such as the fixed-fee/fixed-scope Rapid Deployment Solutions [RDS]), and traditional prime integrator services.
• As the services arm of SAP, it has product experts with the most up-to-date SAP product knowledge to support clients' implementations, as well as a route into SAP's product development team. This benefit is especially important for newer innovations where the track record of implementation success is limited and where there may be a need to interface with the product development team to iron out kinks in the software.
• Clients value SAP Consulting's involvement in validating implementation plans and ensuring SAP's accountability for the success of the project.
• SAP Consulting is also innovating on ways to reduce implementation costs. It has developed "Assemble to Order" and "Industrialized" delivery models that utilize reuse and repeatability, as well as global delivery to provide more cost-effective services.
• Its Business Transformation Services (BTS) group has made big strides in process and change capabilities, as well as intellectual assets to help clients get maximum value from their SAP implementation and investments. Such assets include business process libraries containing best-practice processes and key performance indicators mapped to SAP solutions, a (still in process) business transformation management methodology to guide clients through SAP-enabled transformation, and business process improvement packages for continuous improvement in production environments.

Cautions

• While SAP Consulting as an organization has the full set of capabilities for any SAP-related service, it is spread quite thin as its bench in North America has only 2,500 professionals, including 100 BTS consultants. Clients have cited SAP Consulting's difficulty in finding resources at times.
• Although it is developing expertise in its strategic industries (financial services, public sector, retail and utilities), clients have observed that its consultants often have limited industry and process expertise.
• SAP Consulting does not have the scale for large implementations and often relies on its ecosystem of service partners. For such engagements, clients are better off using a large SI and supplementing with expert services from SAP Consulting.
• For vanilla implementations or implementations involving mature solutions, clients can do better with one of SAP's many lower-cost ecosystem partners.

Sparta Consulting

Sparta Consulting, a California-based firm and provider of SAP solutions, was acquired by KPIT Cummins, a global IT consulting and engineering firm focused primarily on the manufacturing industry, in 2009. The combined SAP practice is officially called "Sparta Consulting, a KPIT Cummins Company" to leverage Sparta's brand equity in the SAP service market. Sparta (KPIT Cummins) has more than 1,360 SAP professionals; about 470 or 35% are in North America and supported by more than 700 in global delivery centers. Sparta (KPIT Cummins) is an SAP Value-Added Reseller and a Gold Level Services Partner. The position of Sparta (KPIT Cummins) in the Niche Players quadrant reflects its smaller size and its strength in the midmarket.

Strengths

• Its industry focus, its track record of consistent delivery facilitated by a rich set of tools and templates, and its development centers in five locations are the key strengths that enabled Sparta (KPIT Cummins) to grow 60% in 2011.
• Sparta (KPIT Cummins) has invested in preconfigured solutions and other assets in its five focus verticals — automotive, high tech, manufacturing, utilities, and wholesale and distribution — which help reduce implementation time and cost through addressing additional functionalities not available in the standard SAP software. Its Sparta Utilities North America Solution (SUNAS), for example, is a portfolio of preconfigured business applications and best practices, tailored for midmarket energy and utility companies, an industry in which Sparta (KPIT Cummins) has performed SAP-related services for more than 40 companies.
• Although Sparta (KPIT Cummins) has successfully delivered engagements for much-larger companies, its size and capabilities make it uniquely suited to companies in the $500 million to $2 billion revenue range, in which it has served many highly satisfied clients.
• Clients cite application and technical expertise, highly experienced resources, and willingness to work with clients to resolve issues and ensure successful project deliverables as key strengths.

Cautions

• As its global presence is still patchy, Sparta (KPIT Cummins) may be challenged in SAP implementations that involve global rollouts to multiple countries.
• Although improving, Sparta (KPIT Cummins) is continuing to develop deeper competencies in newer products, such as Hana and SUP.
• Clients cite some difficulty in getting niche skills as the company's bench could be deeper. Clients also suggest Sparta (KPIT Cummins) could improve on its communications skills and its ability to engage business users.

Tata Consultancy Services

Tata Consultancy Services (TCS), the largest Indian IT services firm, has more than 8,300 SAP-skilled professionals, of whom about 750 are based in North America, supported by more than 6,000 in global delivery centers. TCS is an SAP Global Services Partner and an SAP-certified Run SAP Partner.

Strengths

• From its roots in application management and software engineering, TCS has built a full set of SAP life cycle services, from consulting to implementation, managed services, BPO and hosting. It can thus offer its clients an end-to-end menu of SAP services.
• TCS continues to be a development partner with SAP in, for example, MII, product life cycle management, mobility applications in CPG and an SAP Expert Finder application, and testing. This gives TCS early product access and in-depth technical understanding of these products.
• TCS's preconfigured solution investments include SWIFT MRO (a solution for the airline industry), tax intelligence (a solution developed with KPMG for effective tax planning and management), dealer management and legal management. In addition, it has opened centers of excellence for Hana and mobility where it develops use cases with SAP and clients.
• Technical expertise, flexibility, excellent work ethics, attractive price points and desire to go the extra mile are cited by clients as key strengths.

Cautions

• Although TCS continues to improve its front-end consulting capabilities and business process depth to be a business (and not solely a technology) partner, it needs to make these skills more pervasive among its consultants.
• TCS as an organization is focused on a heavy offshore-centric model. Although TCS has on-site resources and is currently recruiting a large number of local resources, clients looking for a provider with a high onshore component should verify on-site resource availability and work with TCS to obtain such resources.
• A few clients have indicated that TCS needs to improve its project management and communications skills.
• There have been specific instances of resourcing and project team turnover lately. However, such issues have not (thus far) materially impacted project performance.

Wipro Technologies

Wipro Technologies, a division of India-based Wipro, has more than 8,600 SAP-skilled professionals worldwide. More than 3,300 of them serve North American clients. Wipro is an SAP Global Services Partner, Application Management Services Partner and Run SAP Partner.

Strengths

• Wipro continues to build out a full set of capabilities for SAP implementation that it can take to clients, including investing in process consulting and tapping change management resources from its Wipro Consulting practice to complement its strong SAP software expertise. It has successfully delivered numerous large-scale global SAP implementation engagements.
• Wipro continues to focus significant investments on SAP solutions, including MES and MII, transportation management, enterprise warehouse management, and RDS. It has also built a large set of templates and accelerators to speed up implementation and ensure quality of deliverables.
• It is also investing and increasing its capabilities in newer areas. For big data, Wipro has a center of excellence for Hana and a Hana lab, and it is building six industry-specific solutions on Hana and has more than 10 ongoing engagements. For mobility, Wipro has built a dozen mobile apps, dashboards and analytical apps.
• Flexibility, SAP product expertise, a great work ethic and excellent price points are cited by clients as key strengths.

Cautions

• While Wipro is investing in process and industry capabilities, this is still a work in progress, and clients continue to cite its limited business acumen as an area for improvement.
• Attrition of project team members has been an issue in several client engagements. Clients need to monitor turnover and make sure Wipro has adequate processes to ensure sufficient knowledge transfer in case of churn.
• Wipro can also improve on its proactiveness in bringing issues, problems and risks to clients' attention, as well as bringing innovative ideas and suggestions to clients.

Vendors Added or 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

This is a new Magic Quadrant; consequently, no new vendors have been added.

Dropped

This is a new Magic Quadrant; consequently, no vendors have been dropped.

The criteria for inclusion of service providers for this Magic Quadrants are based on a combination of qualitative and quantitative measures:

• Quantitative criteria:
  • External service providers (ESPs) must have consulting and system integration service revenue derived from clients in North America (the United States and Canada).
  • They must have a minimum of $60 million (estimated for calendar-year 2011) in SAP project service revenue from North America.
• Qualitative criteria:
  • Client interest in specific SAP service providers as revealed by Gartner analysts' interactions with enterprise buyers and/or Gartner analysts' opinion on the attractiveness of specific providers to Gartner's North American enterprise clients
  • Overall market interest in and visibility of the provider
  • Ability to provide consulting and solution implementation services across multiple SAP products and with multiple competencies

Evaluation Criteria

Ability to Execute

Gartner evaluates service providers on their ability to execute and their completeness of vision — as per the definitions below. When the two sets of criteria are evaluated together, the resulting North American analysis provides a view of how well the provider performs a spectrum of services compared with its peers and how well it is positioned for the future. For more information on Gartner's Magic Quadrant research methodology, refer to our Research Methodologies on the Gartner website and/or review "Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market."

Gartner analysts evaluate technology providers on the quality and efficacy of the processes, systems, methods or procedures that enable IT provider performance to be competitive, efficient and effective, and to positively impact revenue, retention and reputation. Ultimately, technology providers are judged on their ability and success in capitalizing on their vision.

Product/Service: Core services offered by the provider that compete in/serve the SAP service market. These include current service offerings as defined in the market definition and expressed by growth, capacity, market penetration, skills availability, breadth and depth of offering, and so forth. Subcategories include:

• Vendor's breadth and depth of capabilities in the full portfolio of SAP applications
• Vendor's capabilities in business/process consulting
• Vendor's application expertise
• Vendor's vertical and horizontal offerings

Overall Viability (Business Unit, Financial, Strategy, Organization): Financial viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue to invest in the service and continue to offer the service, advancing the state of the art within the organization's portfolio of services. Subcategories include:

• Assessment of service provider's practice area profile (for example, financial strength, growth, utilization and attrition)
• Analysis of strategy and organization

Sales Execution/Pricing: The service provider's capabilities in all presales activities and the structure that supports them. These include deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel. Subcategories include:

• Pricing strategy and alternative pricing models
• Customer feedback on value for money

Market Responsiveness and Track 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 provider's history of responsiveness and ability to quickly address changing requirements. Subcategories include:

• Vendor's capabilities to deliver against business-outcome-based objectives and metrics

Customer Experience: This criterion considers:

• Specific client feedback on the client's experience working with the SAP application service provider
• The provider's demonstrated ability to deliver on key metrics that drive the overall client experience

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experience, training programs, systems, global delivery centers, centers of excellence, and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Source: Gartner (July 2012)

Completeness of Vision

Gartner analysts evaluate technology 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 the Gartner position. Ultimately, technology providers are rated on their understanding of how market forces can be exploited to create opportunity for the provider.

Market Understanding: Ability of the provider to understand buyers' needs and translate these needs into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and they can shape or enhance those wants with their added vision. Subcategories include:

• Service provider's knowledge and articulation of key market direction and trends
• Analysis of the service provider's executive leadership (including thought leadership, continuity, operational capabilities and so on)

Marketing Strategy: A clear, differentiated set of messages that are consistently communicated throughout the organization and are externalized via communications, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling services, which uses the appropriate network of direct and indirect sales, marketing, service, and communications affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and customer base. Subcategories include:

• Service provider's strategies for partnerships and alliances
• Account management and vision for creating new and/or additional SAP service business

Offering (Product) Strategy: A technology provider's approach to product development and delivery that emphasizes differentiation, functionality, methodology, and feature set as they map to current and future requirements, such as templates and enhancements/extensions to SAP products.

Vertical/Industry Strategy: The technology provider's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals. This includes vertical, industry and process investments as revealed by dedicated resources, training and related IP development in selected verticals, industries and processes.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. Subcategories include:

• Investment in tools, methods, prebuilt assets, industry and process maps, and so forth to assist in improving speed and/or quality of implementation, reducing total cost of ownership or accelerating ROI of solution
• Vendor's ability to align with SAP's road map
• Vendor's innovation on new services and/or offerings related to SAP applications

Geographic Strategy: The provider'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. Subcategories include:

• Geographic scope to assist in global rollouts and so forth
• Appropriate global delivery centers around the world

Source: Gartner

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 position in the market.

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 are the "up and comers" of the future.

Visionaries

Visionaries articulate important market trends and direction. However, they may not be in a position to fully deliver and consistently execute. They may need to improve their optimization of service delivery. In this Magic Quadrant, there are no Visionaries identified. In SAP implementation services, service providers tend to align with SAP's vision and product road maps rather than articulate market direction. Their visions articulate applying SAP products to derive business value, such as specific use cases. Service partners that have interesting vision for how the products are used typically co-innovate with SAP to bring about their vision and train their consultants along the way to execute on this vision. So far, the leading providers that are able to articulate vision have also the ability to execute on them.

Niche Players

Niche Players are strong in one or more segments of the market, such as vertical industry, client size or functional area. Their ability to execute and ability to innovate are limited to these areas and, therefore, are assessed accordingly. Niche Players are particularly suited to projects in their niche spaces and may be as suitable as or more suitable than Leaders for these niches.

The Magic Quadrant for SAP implementation service providers in North America analyzes the leading vendor landscape for SAP implementation services. The relative positioning of vendors in this Magic Quadrant is based on factors determined by Gartner as relevant to this market. We analyze consulting and system integration projects that may require a blend of business, industry, technology, program and project management skills that must align with the client's objectives, institutional and business culture, and employees.

When considering ESPs for a request for information or request for proposal, do not simply select service providers in the Leaders quadrant. All selection processes are enterprise-specific; consequently, vendors in the Challengers, Visionaries or Niche Players quadrants may prove to be more appropriate for your engagement. This analysis is for the consulting and system integration services required for discrete project work only and excludes multiyear contractual engagements typical of 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 large array of criteria. An IT services 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, IT services providers should not underestimate any potential competitor because the inclusion criteria in the Magic Quadrant result in the analysis of the most established providers in the SAP implementation market. Other IT services providers not evaluated in this Magic Quadrant may present better alternatives for your business requirements.

For this document, we obtained 224 references to the 20 leading SAP service providers to supplement our views based on daily interaction with Gartner clients.

Similar to 2011, 2012 has been a busy year for SAP implementation services. Companies continue to be busy harmonizing, rationalizing and consolidating their environments. Globalization continues to spike demand for global rollouts of SAP software, and clients are increasing their SAP footprint through adoption of more modules and extensions. Meanwhile, demand is also coming from verticals new to SAP, such as the public sector, life sciences and banking, as well as emerging markets. SAP's investments in new spaces (notably analytics and its in-memory database flagship product, Hana, and mobility) are driving a flurry of investment activities among ESPs eager to get in front of demand. Leading ESPs have experienced rapid growth and high demand, resulting in high utilization, which has brought about new challenges, such as difficulty in staffing projects, delays in finding professionals with the right skill sets (especially for newer SAP products), and attrition.

While great strides have been made in SAP implementation, the market continues to struggle with age-old challenges: how to implement faster and less expensively, with less risk and more predictability, and to ensure the implementation brings about the business benefits promised. To this end, many leading ESPs have invested heavily in accelerators, reusable assets in industry-specific or horizontal niche functionalities, and preconfigured solutions, as well as accelerating their offshore delivery capabilities. They also co-develop with SAP on "white space" or gaps in SAP products to compete better with best-of-breed software providers. SAP itself has developed a portfolio of RDS that encompasses highly targeted fixed-scope, often highly affordable, solutions. Some ESPs are also developing RDSs to offer to their clients. Leading ESPs differentiate on capabilities in newer products, such as in Hana and mobility. Others innovate on newer delivery and consumption models, such as offering virtualization and private and public cloud services, as well as bundled hardware/software/service subscription fee models.

A large service ecosystem supports SAP's customers and helps it sell into new organizations. Needless to say, the 20 service providers included in this Magic Quadrant make up a small fraction of the thousands of service providers that implement SAP. Many capable providers are not included in this study due to our inclusion criteria and methodology. Vendor Guides, Cool Vendors and Hype Cycle reports feature smaller and/or interesting SAP service providers that may be a better fit for specific SAP implementation projects, depending on resourcing objectives, size of project and other factors.