Magic Quadrant for Help Desk Outsourcing, North America

Gartner defines "help desk services" as the provision of end-user support for all IT services. Help desk services include:

• First-level support (see Note 1)
• Second-level support (see Note 1)
• Custom software support
• Problem management
• Problem categorization and logging
• Problem tracking and escalation
• Problem resolution

Source: Gartner (July 2012)

Vendor Strengths and Cautions

Atos

The acquisition of Siemens IT Solutions and Services (SIS) is now complete and the new Atos has a unified portfolio of desktop, user support and workplace services known as the Adaptive Workplace. Delivery competencies and locations have also been consolidated across delivery centers and are operating with one delivery model.

Strengths

• Reference clients reported no service disruptions during the acquisition of SIS and its integration into Atos. Given the size and scale of both firms, this is impressive.
• Clients report that Atos has excellent staff resources — its people have deep technical skills, are good at communications and are readily available.
• Atos demonstrates a process-rich delivery method for service desk support during regular hours, which, according to its clients, results in consistent performance and delivery to end users.

Cautions

• Clients report that off-hours support presents challenges as the pool of Atos resources lacks familiarity with clients' environments. Clients are often frustrated by the limited and inconsistent off-hours assistance provided by Atos's service desk personnel.
• While major components of the SIS and Atos integration are complete, Atos has yet to finish integrating processes at the operational layer. Gartner recommends that clients perform extensive due diligence when considering Atos and ensure that process cohesion for service delivery is written into the contract.
• Atos lacks vertical-market focus for service desk delivery in comparison to its competitors. Clients contemplating using Atos should examine their industry-specific requirements to ensure that Atos has sufficient talent with adequate vertical-market understanding.

CGI

CGI's strategy is to provide complete infrastructure services across vertical markets including manufacturing, government, healthcare, telecom/utilities and financial services. CGI's key geographic market is now the U.S., which accounts for over 50% of its business, ahead of Canada with 43%. CGI handles over 3.5 million help desk contacts a year. To supplement its growth plans, CGI has made an offer to acquire Logica (revenue of $6 billion) in order to strengthen its global footprint.

Strengths

• CGI is a very strong player in Canada and is successfully expanding in the U.S., largely through its strong position in the government sector, which accounts for 42% of its business.
• To help support the rise of Apple devices in client enterprises, CGI has partnered with Apple to address iOS and Mac OS devices at both consumer and enterprise level. This broadening of scope has strengthened its ability to support clients.
• Clients report satisfaction with CGI's service levels and the stability of resources operating its help desk.

Cautions

• Since much of CGI's business comes from the U.S. government sector, clients need to assess CGI's depth of experience and available resources for help desk services in other vertical markets in the U.S.
• Reference clients recommend that CGI improve its project management skills to avoid lingering problems. This would also lead to more accurate milestone delivery.
• Reference clients indicate that CGI is making slow progress with, and failing to invest enough in, automation and self-help/self-healing tools for its help desk clients. They also report a lack of continuous improvement in help desk delivery.

Ciber

Ciber is a $1.1 billion global IT services company that builds, integrates and supports application and infrastructure for businesses and governments. Ciber has reported annual help desk service revenue of $46 million and claims to handle over 4 million help desk contacts. Ciber has increased its global capacity with expansions in Poznan, Poland and India.

Strengths

• Ciber has introduced a software-as-a-service (SaaS) service desk for ease of use and access. This is positioned with transactional pricing, or "pay as you grow" for maximum scalability. The system allows for easy integration with CRM and other capabilities.
• Clients said Ciber had partnered well with them, and Ciber scored very highly in customer satisfaction surveys thanks to its high rate of first-call resolution and responsiveness in answering calls.
• Clients added that Ciber's pricing is competitive as they were able to save 20% or more by switching to Ciber.

Cautions

• Clients indicated that Ciber continues to struggle to develop effective processes and to improve its processes. They stated that its processes were less rigorous and less mature than those of larger service providers they work with.
• Clients indicated that Ciber can be reactive, rather than proactive, in the area of problem resolution and that it lacks a strong continuous improvement model to resolve issues.
• Clients believe that, through better recruiting and deeper training of Level 1 help desk operators, Ciber could increase its already strong first-call-resolution percentage.

CompuCom

CompuCom has IT services revenue of over $1 billion. Its help desk business handles over 7 million help desk incidents a year for clients and generates annual revenue of $77 million. CompuCom has an impressive retention rate of 89%, with 47% of its clients having been with the company for over 10 years.

Strengths

• CompuCom, building on its nearshore delivery success in Mexico, has nearly doubled its help desk capacity in Mexico in the past three years. This gives it a nearshore capability with both the language support needed for North America and a competitive cost structure.
• CompuCom is using its cloud service desk capability to take advantage of U.S.-based rural and remote agent resources. This approach provides it with highly skilled employees at a lower price.
• Clients are impressed by CompuCom's quality, as it always meets set service levels and takes a flexible, collaborative approach to service delivery in order to put customers' needs first.

Cautions

• Clients indicated that some of CompuCom's contractors and temporary staff do not always meet requirements, and that replacing them causes disruption.
• Some clients stated that CompuCom was not timely when pricing new services or responding to a customer's request for additional services. The response from CompuCom took too long and slowed the overall process.
• Clients cautioned that some CompuCom account managers exhibited less ability than was anticipated to take ownership of help desk issues and follow them through to appropriate resolution. Clients felt they had to press account managers continually in order to keep CompuCom focused on their problems.

CSC

CSC has revenue of $16 billion. It has over 550,000 help desk users and handles more than 14 million help desk contacts per year. CSC tightly couples its help desk service offering across its operations centers and operations support office functions to enhance delivery performance.

Strengths

• CSC has made key investments in telephony system upgrades, analytics and problem management to boost customers' satisfaction with first-call resolution. This effort is supported by ITIL- and Six Sigma-certified problem managers and an inclusive service portfolio road map to guide the use of applications and delivery models.
• Clients indicated that CSC's help desk staff are effective and reliable, and that offshore staff in Malaysia have proven to be capable in providing help desk support.
• Reference clients are impressed with CSC's processes and ability to meet contracted service levels: first-call-resolution, customer satisfaction and resolution rates are very good.

Cautions

• CSC has hired a new CEO with the aim of improving its financial performance. Such a move typically results in changes to corporate leadership and account support, so clients should be aware of the potential for change and that it might impact the delivery of services.
• Reference clients indicated that CSC's pricing was above average when comparative market-based pricing analysis of their deal was completed. And they did not always feel that the higher price gave them better performance or enhanced help desk service offerings.
• A few clients indicated that CSC's process standards start to break down when applied in a global environment. This is an indicator that CSC's processes may not be applied as diligently in all areas of the globe, leading to inconsistent delivery. Clients should check that the account management team provides focus in this area to ensure consistent quality.

Dell

Dell's services business accounts for $8.3 billion in corporate revenue. Help desk contacts grew by 14% in 2011 to 12 million, which is impressive growth in a competitive market. Dell's strategy spans global expansion, horizontal delivery, industry expertise and market growth. Dell focuses on key industry segments such as healthcare, financial services, government, manufacturing, retail and education, while continuing to nurture its business in other industry segments.

Strengths

• Dell has created simplified end-user service delivery options for clients. These offer standardized ready-to-use services based on a fixed scope and price, plus configurable options. The different user profiles — basic, advanced and premium — offer clients flexible buying and delivery options.
• Reference clients indicated that Dell's account teams continually look to improve help desk efficiency and are very customer-focused. These clients were also pleased with Dell's expertise and help desk delivery.
• Reference clients stated that Dell takes a very proactive approach and has effective metrics to support their environments. This stems from Dell's efforts to understand clients' business processes and customized environments.

Cautions

• Reference clients indicated that their accounts were experiencing agent turnover resulting from attrition, promotions and transfers. This has led to some temporary degradation of help desk service.
• Some clients indicated that Dell's product and service teams are not always "in sync" and that there is potential for conflict between what the client needs and what the Dell team feels compelled to propose.
• Some clients stated that Dell underestimated the detailed requirements for their transition. This resulted in delays and required escalation. Dell teams responded effectively with extra support, but a more detailed initial transition plan would have prevented the need for this.

Fujitsu

Fujitsu has $54.6 billion in total revenue. Gartner estimates that $250 million of this derives from global help desk services. Fujitsu's North American help desk services represent a business worth over $24 million, and which is still growing. The company's global help desk incident volume totals 18 million globally per year, with 2.3 million attributable to North American clients. Fujitsu focuses on a continuous improvement program via its Sense&Respond methodology which applies lean principles of maturity. Fujitsu's help desk service approach is robust and visionary, but the firm lacks market share, especially in North America.

Strengths

• For North American clients, Fujitsu mainly uses its three help desk solution centers in Costa Rica, Richardson, Texas and Montreal, Canada, but it also has other global delivery centers around the world that it can use when needed. Fujitsu has been very good at retaining agents, with an attrition rate of less than 5% for all three sites.
• Reference clients commented that Fujitsu is easy to work with, very agile, and able and willing to manage requested changes in a timely manner.
• Fujitsu has strengths as a global company and can support 41 languages with 5,500 agents without having to use a translation service. This bodes well for North American companies that have global service and multiple language requirements.

Cautions

• Fujitsu employs the Triole for Services (TfS) system, which can be acquired by its clients and integrated with their existing applications, but it does not yet have a SaaS help desk offering.
• Some Fujitsu clients indicated that the company does not bring innovation to bear on their deals, and continuous improvement was not evident, which contradicts its Sense&Respond program.
• Some clients indicated that Fujitsu's procedures were neither formally documented nor clear to them. Gartner recommends that processes and procedures that the service provider is responsible for be reviewed regularly and clarified to enable a new provider or insourced group to take over the processes if necessary.

Genpact

Genpact has about $500 million in IT services revenue. Gartner estimates that $30 million of this is attributable to North American help desk services. The company has global and regional delivery capabilities, and its help desk agents can support delivery in over 25 languages. Genpact claims a 100% client renewal rate.

Strengths

• Genpact has shifted its go-to-market strategy from a focus on business process outsourcing (BPO) to IT outsourcing. This has ignited growth, and boosted its revenue among the ranks of the Fortune 500. Genpact's overall business mix has changed, and its largest client, GE, now accounts for less than 30% of its revenue.
• Genpact has provided clients with contract flexibility to accommodate additional volume through the use of a pooled resource pool that can be teamed with dedicated resources.
• Reference clients indicated that Genpact is flexible in building new delivery capabilities to adapt to their business changes, while maintaining quality assurance processes.

Cautions

• Genpact's delivery model offerings face challenges as reference clients indicated a lack of nearshore options, and language barriers with agent communications.
• Some Genpact clients voiced concerns about a lack of innovation and continuous improvement at their accounts, especially as Genpact had promised strong analytics capabilities that could be used to improve efficiency and customer satisfaction.
• Some reference clients were concerned about Genpact's reactive approach to problem solving and its failure to identify adverse trends that could have been addressed before problems arose.

HCL Technologies

HCL Technologies' North American revenue grew by 29% in 2011. Its help desk revenue alone reached $29 million in North America, with an impressive 24% growth. Contacts numbered 5 million, 30% of which were addressed through chat services. HCL's strategy is to deliver a single virtual service desk from multiple physical locations.

Strengths

• HCL has invested considerably to enhance its offerings. Investments in tools such as MyDashBboard and Management Tools as a Service (MTaaS) — a business-ready management platform offered on a cloud, on-premises application or hybrid deployment basis — provide visibility and transparency in service delivery for clients.
• Reference clients stated that HCL has highly effective technical skills and that it brings innovation proactively to help desk services. Clients further expressed satisfaction with HCL's dedication to improving a delivery process designed to bring additional efficiency and effectiveness to client accounts.
• Reference clients said they were happy with the urgency with which HCL stepped in to resolve issues, and with its effective follow-up. HCL also takes on the culture of the customer and delivers consistent services.

Cautions

• A few clients indicated that HCL had turnover problems with offshore resources and had lost some agents with knowledge of their business. However, they also stated that HCL's good documentation minimized the impact of this turnover.
• Clients expressed some dissatisfaction with HCL's MTaaS tool, which despite investment, still does not function as well as originally expected.
• HCL has managed a compound annual growth rate (CAGR) of 43% during the past five years, an achievement that required an increase in overall resources from 4,100 to 18,000 during this period. This growth is good news, but it might also result in a shortage of good resources. Clients have indicated that suitable resources that can fill vacant positions in a timely manner are becoming more difficult to find.

HP

HP's service desk vision takes into consideration the best location for the client, aided by the use of virtual routing, multiaccess points to the help desk, and effective user validation with user profiles. Help desk calls total 39 million annually, and is supported by HP's capabilities in 35 languages across the globe.

Strengths

• HP's service desk has the depth and breadth to support all PC brands. HP also strives to increase self-service capability, first-contact resolution and offer multilingual capability.
• Reference clients observed that the richness of HP's operations, processes and methodologies make its help desk service delivery more consistent and thorough.
• Clients stated that HP has flexible service offerings, including options to add extra resources from its resource pool.

Cautions

• Several reference clients reported high turnover in HP help desk agents, which resulted in delivery problems due to loss of expertise. This reduced customer satisfaction.
• Reference clients reported challenges with help desk transitions. On some occasions, the work effort was rescoped, causing customer frustration and delays.
• Reference clients indicated that HP is not a low-cost provider, and they considered they were paying a premium without necessarily receiving premium services. They indicated that HP, as a sizeable company, can have a highly fragmented sales approach, with the result that, for example, they receive calls from HP sales representatives about services for which they already have HP contracts.

IBM

IBM has significant worldwide help desk coverage and handles over 54 million calls per year globally, with 5.6 million attributed to its North American clients. The service desk is the hub of IBM's end-user services and manages activities across service components.

Strengths

• Reference clients remarked on the strength of IBM's help desk processes and methodologies, which led to consistent delivery of help desk services.
• IBM, through its Lean Six Sigma and analytics approach, strives to make continuous improvements for end users. This is evident from its continued investment in shared infrastructure deployed globally, contact center tools for better client relationship management, and IBM Watson for contact center knowledge management.
• Reference clients indicated that IBM's local teams are very customer-focused and very timely and responsive. Service agents are reported to be quality resources. Furthermore, IBM is standardizing its hardware and procedures, which is delivering added value to clients.

Cautions

• Reference clients commented that despite IBM's wealth of experience, processes and methodologies, it failed to bring the expected innovation to help desk services.
• Reference clients indicated that turnover of highly skilled help desk agents often causes delivery difficulties, as replacements are often less experienced offshore staff. Clients wanting to maximize the value of IBM's offshore service delivery should gauge the appropriate level of onshore integration and management required.
• Despite IBM's wide-reaching delivery model, reference clients indicated that IBM can find it challenging to support less common or emerging technologies through its help desk outsourcing services. Potential clients considering IBM should be mindful not to assume that IBM — often considered a premium provider — is immune to common help desk staffing problems.

Maintech

Maintech offers desktop support, help desk and data center services. Its managed service business is a division of Volt and has total revenue of $2.5 billion, of which $23 million is attributable to North American help desk services. Maintech's clients are primarily in the financial services industry and include investment banks. Maintech is not yet a global provider, but they are expanding services into Asia/Pacific and Brazil based on clients' demands for support in these specific areas.

Strengths

• Maintech has proven itself by serving clients in a very demanding vertical market, the financial services sector. Its ability to respond urgently to fix problems has earned it a good reputation as a solid service provider with foundational help desk delivery skills.
• Maintech has started to offer help desk automation tools and quality initiatives to drive service delivery improvement at client accounts.
• Reference clients stated that they are confident about Maintech's ability to deliver core help desk services.

Cautions

• Maintech does not offer help desk services as point solutions, but only as part of a full infrastructure offering. As such, Maintech is not a suitable candidate for clients seeking a help-desk-only solution.
• Maintech remains a Niche Player and is unlikely to become a Leader through technological advancement. Maintech may not be ideally positioned for clients seeking a large provider with significant global and multilingual capabilities.
• Reference clients indicated that Maintech needs to invest more in help desk services, including tools and enhanced processes to improve its delivery.

Pomeroy

Pomeroy has $665 million in revenue, of which $20 million is attributable to help desk services. It handles 2.6 million contacts a year and averages 8,000 client calls per month. Nearly half its help desk business comes from clients in the financial services industry.

Strengths

• Pomeroy is effective in delivering service to small and midsize enterprise clients looking for customized solutions with dedicated help desk agents.
• Reference clients indicated that service quality is good in that Pomeroy meets contracted service levels and is flexible in service delivery. Pomeroy is also reported to have stable account management that is client focused.
• Pomeroy is continuing to implement toolsets that are aligned to ITIL base standards. These toolsets have received positive feedback from clients.

Cautions

• Reference clients expressed a need for more robust reporting and better proactive deployment of monitoring solutions to reduce call volumes.
• Some reference clients stated that innovation is a challenge as it is slow in coming. Some clients had to initiate and lead discussions regarding help desk improvements and innovation to improve the efficiency and effectiveness of delivery.
• Gartner remains concerned about Pomeroy's single centralized help desk delivery model, which resides in its corporate office in Kentucky. Business outages and disruptions may occur with Pomeroy's single centralized help desk approach. Being reliant on a single centralized help desk location places Pomeroy clients at increased risk, compared with clients of providers that have established multiple centralized help desk locations around the globe.

Stefanini

Stefanini has completed the acquisition of TechTeam and now operates under the Stefanini name only. Stefanini, a Brazil-headquartered firm, has 15 help desks and handles approximately 3.4 million user calls per year in 30 different languages in North America. Stefanini focuses on many industries, including automotive, manufacturing, consumer products, oil and gas, technology, financial services, power and utilities, telecom, life sciences, retail and hospitality, and travel and transportation.

Strengths

• Stefanini's help desk offering is ITIL-based and powered by CA Technologies tools. It can deliver via a SaaS model, allowing for flexibility in approaching individual client environments.
• Clients report that Stefanini is flexible to work with and willing to adapt to unique client considerations, which are often complex.
• Strong process orientations are also exhibited by Stefanini staff, which helps create more consistent delivery of services.

Cautions

• Reference clients noted that Stefanini is not proactive in making its service delivery more efficient and effective — they often have to start, and then lead, discussions with the vendor. Clients considering hiring Stefanini, or renegotiating a contract, should work with the company to build a performance-based contract including appropriate measures, incentives and penalties.
• A few reference clients reported staff turnover in management and key delivery and interface positions at the account level, which has resulted in stalled customer satisfaction rates and a decline in delivery capability. This was especially true during the integration of TechTeam.
• Clients with global delivery requirements see limitations in Stefanini's ability to cover all their geographic needs, which has limited their relationships and deals with this vendor.

Tata Consultancy Services

Tata Consultancy Services (TCS), though a new entrant to this Magic Quadrant, has impressive revenue numbers in the help desk services area and exhibits strong market growth. TCS has invested in worldwide help desk locations, as well as centers of excellence, and is continuing to expand its delivery footprint around the world.

Strengths

• TCS's clients are very impressed by its use of metrics and key performance indicators. They find the vendor has a strong attention to detail and is very transparent regarding calculated metrics.
• Clients report that TCS is a process-oriented firm that strives for uniformity in help desk delivery and client satisfaction.
• TCS has a strong global delivery footprint and capabilities in many languages, which clients, especially those with worldwide locations, find very appealing. TCS plans to open additional help desk locations in Asia/Pacific and Europe to expand its capabilities further.

Cautions

• Clients want TCS to spend more time training its new service desk agents before they handle client calls on their own. Gartner recommends that prospective clients discuss this issue with TCS, review its training plans for new agents, and contractually dictate minimum levels of training and testing of capabilities before agents are allowed to take calls.
• Clients expressed frustration about bringing innovation into established help desk deals, as they felt they had to initiate conversations with TCS, as opposed to the vendor proactively bringing ideas to its clients.
• Some clients expressed concerns about accent neutralization and reported having difficulty understanding agents clearly when calling the service desk.

Unisys

Unisys supports 6.8 million calls across its 11 worldwide help desks (two in North America, three in Latin America, three in EMEA and three in Asia/Pacific). Unisys divides its service portfolio into three distinct categories: "my workspace" to enhance the client experience, "integrated service management" to simplify computing, and "infrastructure services" to optimize infrastructure investments. Unisys has several areas of strength: end-user computing, including help desk services; a delivery model that emphasizes efficient, globally standardized processes; and a geographically dispersed footprint.

Strengths

• Unisys's help desk strategy is holistic, with offerings that address the impact of disruptive trends including mobility, "bring your own device," social computing, cybersecurity and virtualization, to name but a few. It has modified its vision to reflect changing market conditions and client needs.
• Clients praised Unisys for its contract flexibility and the personalized service it provides through user profiling and flexible delivery models. They also found Unisys highly responsive to any delivery issues that arose.
• Unisys has greatly improved its financial situation and is once again making strategic investments in its help desk offerings. It has a disciplined customer improvement and innovation program, which it uses to introduce improvements and innovation to clients in a formalized way.

Cautions

• Some reference clients expressed a need for tighter, more structured transition processes to enhance the overall experience when moving workloads to Unisys.
• Unisys clients reported some frustration with inconsistent following of processes, which created some delivery challenges.
• Reference clients stated that Unisys's use of multiple suppliers and subcontractors meant that it was not possible to manage the contract as seamlessly as they would like, as the account manager lacked the control or capabilities to make necessary decisions.

Wipro

Wipro's strategy includes building a solution set that meets its clients' business-driven service-level requirements with appropriate help desk resources, continuing to enhance its help desk skills, delivering help desks as a service, and addressing clients' emerging business needs. It aims to address clients' emerging business needs by building state-of-the-art certification programs for its help desk personnel and offering highly flexible and standardized global support that ensures business continuity.

Strengths

• Wipro has a strong global delivery platform that reaches across global help desk delivery locations, so it can support clients' broad geographical requirements.
• Wipro is generally proactive in addressing clients' problems relating to help desk delivery, takes charge of the situation, and strives to solve problems in timely fashion.
• Reference clients expressed satisfaction with Wipro's tools and technologies, such as its self-help and self-healing tools and remote management capabilities.

Cautions

• Wipro's help desk services seems to be gaining momentum in North America, but its brand presence in the help desk services arena is still weaker than its competitors'.
• Reference clients report that Wipro is not proactive in bringing innovation to the deal in a timely fashion. They reported often having to lead discussions about innovations to help desk service delivery.

Xerox

Xerox is a provider with $23 billion in revenue, half of which comes from services. It is changing the way it approaches the help desk market by adopting more of an industry-focused strategy for services and sales opportunities. It has also significantly enhanced its support for Apple products with a MAC center of technology.

Strengths

• Xerox has continued to develop its help desk service offering with the use of ISO 20000, ITIL and Lean Six Sigma process methodologies and standards in order to drive effective practices across the customer base.
• Reference clients praised Xerox for its service prices. Several claimed to have saved 25% or more, compared with their prior help desk delivery model.
• Reference clients reported that the Xerox help desk is highly scalable and has the flexibility to increase or decrease in scope based on service needs. Xerox is also very flexible in its approach to supporting an array of devices including Apple iPads and iPhones and various user-owned devices. Its investment in a MAC center of technology for Apple products is evident.

Cautions

• The ACS Management Platform (AMP) platform that uses a Remedy system with additional Xerox capabilities is an effective tool for the help desk team. Although clients can still access to this tool should they need to end their engagement with Xerox, they should ensure that this access is formally included as a right in the contract's terms and conditions before signing a deal.
• Xerox would benefit by establishing an innovation process that links its technical capabilities more closely to firm business demand with strong support from the full Xerox engine, not just local support.
• Reference clients indicated that staffing problems exist, with high turnover rates in offshore facilities and Xerox's use of contractors causing inconsistency in help desk service delivery.

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 a Magic Quadrant or MarketScope may change over time. A vendor's appearance 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. It may simply reflect a change in the market, and therefore changed evaluation criteria, or a change of focus by the vendor.

Added

Tata Consultancy Services has been added because it fully met the inclusion criteria, having expanded its presence in the North American help desk market.

Dropped

GlobalServe, Patni Computer Systems and Technisource.

In addition, the names of some vendors have changed:

• Stefanini TechTeam now appears as Stefanini, the new operating name for the combined entity.
• Siemens IT Solutions and Services, having been acquired by Atos, now operates under the Atos brand.
• ACS, A Xerox Company, is now officially called Xerox, following its acquisition and integration.

We included external service providers that generated a minimum of $20 million in annual help desk service revenue and submitted at least five reference clients in North American.

Any service providers that qualified for inclusion but chose not to participate actively in the study, we elected to include or exclude based on our experience and knowledge of the market. If, for example, we knew that many client organizations had chosen to contract or shortlist these vendors, then we included them.

Our evaluation of each provider comprised the following components:

• Gartner analysts' interactions with the reference clients that the service providers identified.
• Gartner analysts' discussions with clients during normal day-to-day interactions, at various Gartner events, such as the U.S. Symposium, the Outsourcing and Vendor Management Summit and the Asset Management Summit.
• Assessment of each provider's 60-to-90-minute presentation delivered to the four Gartner analysts who wrote this Magic Quadrant. The presentations described the providers' delivery capabilities and the strategic direction of their help desk service businesses.
• Input from additional Gartner analysts who are not listed as authors of this Magic Quadrant.

Reference Checks and Results of Client Interactions

As part of our reference checks, we interviewed end users in more than 150 organizations, which had the following characteristics:

• Organizational characteristics:
  • The organizations ranged from those with only slightly more than 400 users to organizations with over 162,000 users. This gave Gartner the opportunity to analyze various deal sizes, which provided insight into challenges, pricing, service levels and contract structures.
  • The organizations represented many industry segments, including financial services, retail, utilities, oil and gas, manufacturing, pharmaceuticals, government (federal, state and local) and educational institutions (both K-12 and higher education). In addition, many of the large organizations were multinational.
• Help desk and desktop outsourcing purchasing characteristics:
  • As last year, more than 85% of the organizations used the same provider for desktop and help desk support. Fewer than 10% used a provider only for help desk services. These findings indicate the continuation of a trend in which the virtualization of end-user computing and the rise of cloud computing prompt clients to consider a single service provider for more parts of an individual IT tower (help desk and desktop services, for example) and, indeed, for multiple IT towers. This is due to interwoven solution delivery capabilities and the availability of end-to-end solution toolsets.
  • Slightly more than 65% of the clients relied on the same provider for IT services other than the desktop and help desk services.
• Help desk outsourcing contract characteristics:
  • Last year, over 98% of the end users had formal SLAs in their contracts.
  • More than 97% of the SLAs included penalties for underperformance, and almost 65% of the deals included earn-back opportunities — a slight increase from 60% in last year's Magic Quadrant, and a substantial increase from the year before that, when only 40% included earn-back opportunities.
  • Slightly less than 40% of the SLAs had incentives for overperformance. While this represents little or no change from last year, it is indicative of the difficulties clients are having in determining the value of overperformance. In fact, it could easily be interpreted as clients taking the definition of overperformance seriously and not wanting to give overperformance payouts to appease vendors that insist on them if penalties are to be imposed for underperformance.

Relevant Data

In addition to the data gathered from their reference clients, the participating providers gave Gartner relevant market information about:

• Revenue: Collectively, they reported that in North America they have over 2,425 help desk organizations, operated on either a stand-alone basis or in conjunction with other services. Collectively, they reported relevant revenue in North America of $3.25 billion.
• Activity: The 2,425 help desk client organizations, with more than 36 million employees, handled over 77 million calls in 2011.
• Profit margin: Most of the providers reported a gross profit margin of 20% to 25%. The lowest reported figure was 15% and the highest 30%. Of course, it is impossible to verify these figures as they are not included in the providers' annual reports in sufficient detail. As in previous years, larger deals appeared to have smaller margins, while smaller deals seemed to have slightly higher margins. One of the key pricing factors was the scale of the deal. This meant that providers priced larger deals lower per call or per user per month, while they priced smaller deals higher per call or per user per month. In addition, offshore-delivered help desk deals continued to have lower prices than onshore-delivered deals.
• Pricing data: As with any IT infrastructure tower, the help desk has various pricing mechanisms. The mechanisms reported by the reference clients Gartner spoke to included per minute, per call, per hour, per full-time equivalent and per user per month. The most prevalent pricing mechanism was per user per month. This pricing method is also the most effective way to drive provider behavior and to complete benchmarking analysis.
• Service provider employment: The 18 service providers each have, on average, 19,625 employees staffing 128 help desks worldwide. One vendor provides its help desk through just one location, while one had 44 help desks globally. Reported employee attrition ranged from less than 1% to over 30%. Attrition in offshore delivery locations substantially exceeded that in onshore locations due to the competitive nature of the employee market.
• Languages supported: Collectively, the providers support more than 40 languages. However, some support as few as two languages (English and Spanish), while one supports 35.
• Reference results: In general, the reference clients painted an improved picture from last year, which indicates that the performance of providers in general has improved. However, it remains the case that not all the reference clients were wholly satisfied, and one or two cases were contemplating switching to another provider due to their present provider's inability to meet expectations.
• Most common service levels: Almost all the reference clients we spoke to had formal service levels that they used to measure providers' performance. The number of service-levels per deal ranged from one (a measure of customer satisfaction) to as many as 15. The most common service levels were for average speed of answer, call abandonment rate, first-call resolution, recall rate (if an issue is not resolved during the first call) and customer satisfaction. Other, less frequent, ones included help desk availability, average talk time and number of calls per user per month.
• Penalties/incentives: Over 60% of the deals that included penalties for underperformance had penalty fee reductions ranging from 10% to 20% of the monthly fee to the provider.
• Innovation: Implementation of innovative solutions continues to lag behind clients' expectations, as it has for many years. In response, organizations are beginning to negotiate stringent innovation-related terms, conditions and measurements into contracts to ensure that the expected innovation occurs.
• Benchmarking: Over 60% of the deals included benchmarking clauses enabling the client to engage an external company to perform a formal benchmarking exercise. The price was often adjusted if it was not within the top 10% to 25% of best prices for a similar size and type of deal in the help desk market.
• Toolsets: Most of the providers and some of the reference clients reported reluctance by end users to use self-service portals for tasks such as resetting passwords and consulting FAQs. This is probably indicative of cultural issues, a lack of communication or a simple fear of using such tools. But whatever the reason, neglect of these tools leads to higher costs for help desk solutions. Organizations that do use these tools are capitalizing on an easy way to reduce costs, the only change required being to employees' behavior.

The results of our reference checks and our views of the providers' presentations led to the placement of the providers in the Magic Quadrant. Their positions reflect their completeness of vision and ability to execute. It is worth noting that this year's reference checks resulted in feedback indicating that the providers were doing a better job than in recent years. Fewer reference clients had encountered challenges during the year, and those who made positive comments were more complimentary than before.

Evaluation Criteria

Ability to Execute

We based our analysis of each vendor's ability to execute on the following criteria:

• Product or service
• Effective resourcing
• Transition management
• Sales execution/pricing
• Contract/deal structure
• Pricing acceptance
• Marketing execution
• Clarity of services, roles and responsibilities
• Client delivery model/relationship management
• Customer experience
• Operations
• SLAs, metrics and measurement programs
• Expertise with technical support/operations/tools
• Market responsiveness and track record
• Client innovation
• Overall viability (business unit, financial, strategy and organizational viability)

The Ability to Execute axis positions each service provider according to its success in delivering results, and its preparation to deliver successfully in the future. Gartner verifies a vendor's capability to deliver help desk services through extensive interviews with the provider's clients, including reference customers.

We evaluated providers on the quality and efficacy of the processes, systems, methods and procedures that enable them to perform competitively, efficiently and effectively. Our evaluation also included their ability positively to affect revenue, retention and reputation. Ultimately, their capability and success in capitalizing on their vision play a critical role in our evaluation.

For the purpose of scoring, each criterion is weighted "high," "standard" or "low."

Criteria Weighted "High"

Product/Service: We looked at each provider's core services that compete in or serve the defined market. The analysis included service capabilities, quality, feature sets and skills, whether the provider offers them natively or through agreements or partnerships with OEMs, according to the market definition and as detailed in the subcriteria. Two key considerations:

• Effective resourcing: We focused on the service provider's ability to provide relevant resources effectively to customers. This involved asking:
  • How do you decide on the resources required to support a customer?
  • Do you have tools and procedures to assist with resource allocation?
  • What are your current capabilities in terms of staff availability and facilities?
• Transition management: We evaluated the service provider's investments in its people, focusing on what practices it has put in place to recruit, train and retain qualified staff. We also judged providers on their ability to integrate staff from client organizations by offering competitive job opportunities — for example, addressing salary and benefit packages in different countries, offering retraining, providing career progression opportunities, and minimizing disruption due to employees' job locations. This involved asking:
  • What are the key skill sets and competencies of the resources?
  • What changes in the skill set mix do you anticipate during the next two years?
  • Do you have a quality process and project plan for transitions?
  • What are your procedures for moving the workload to your facility?
  • How do you handle the hiring of your customers' employees?

Sales Execution/Pricing: We examined each provider's capabilities in all presales activities and the structures that support them. This included deal management, pricing and negotiation. We reviewed the following areas:

• Contract/deal structure: We asked each provider to explain how they manage various contracts and structure the relationship to meet the needs of both parties. This involved asking:
  • How do your deals support the service recipient and your own strategic goals?
  • Is there a shared vision?
  • Do you have a process to ensure that your vision remains aligned with that of the customer for the life of the contract? From a contractual point of view, how can you provide flexibility and agility in the provision of help desk services?
• Pricing acceptance: We evaluated each provider's ability to manage prices and reduce costs (through new service offerings, improved productivity, management tools, quality initiatives, and staff reallocations or reductions). These abilities are key to outsourcing deals where the primary objective is to gain economies of scale. We also examined each provider's pricing schemes and their clarity. This involved asking:
  • How are the various services priced?
  • Are there add-on costs?
  • Do you provide price justifications based on services' business value to your customers?

Marketing Execution: We explored the clarity, quality, creativity and efficacy of programs designed to deliver each provider's message to influence the market, promote its brand and business, increase awareness of services, and create a positive view of the services, brand and organization in the minds of buyers. A combination of publicity, promotions, thought leadership, word of mouth and sales activities can create and increase this "mind share." We evaluated the following two areas in particular:

• Clarity of services, roles and responsibilities: We explored each service provider's willingness to establish clear roles and responsibility matrices as part of a comprehensive governance effort. These matrices help to avoid confusion among the parties, reduce duplication of roles, eliminate unclear responsibilities, and optimize decision making and project management processes. We also asked each provider to explain its relationship management role and how it supports what needs to be done for various service recipients. This involved asking:
  • What statement-of-work structures describe the services offered?
  • Do you have a standard format?
  • If so, what does it include?
  • Is there a formal communication process to interact with the client?
• Client delivery model/relationship management: We examined each provider's delivery capabilities and practices for help desk services, CRM and knowledge transfer, as well as quality control and quality assurance. We evaluated service providers on their overall client delivery model and ability to apply repeatable practices consistently to manage long-term relationships with customers and support emerging business and IT challenges. We asked each provider to explain the organizational structure and procedures they use to manage their accounts and resolve differences, escalate problems, and generally maintain a successful relationship with customers. This involved asking:
  • What is your style and approach to working in the client's cultural and political environment?
  • How would you describe the roles of relationship management, contract management and service delivery management in an engagement?

Customer Experience: We evaluated the relationships, products and services/programs that enable organizations to be successful with the service solutions under evaluation. Specifically, this included how organizations receive technical support or account support from their provider. This can include ancillary tools, customer support programs (and the quality thereof), the availability of user groups, and SLAs. We asked providers to identify five reference customers for the help desk services they provide.

Operations: We examined each service provider's ability to meet its goals and commitments. Factors include the quality of the organizational structure, such as the skills, experiences, programs, systems and other factors that enable the organization to operate effectively and efficiently on an ongoing basis. We evaluated two areas in particular:

• SLAs, metrics and measurement programs: We evaluated how effective each provider's performance measurement program was to determine whether the provider was delivering services effectively. This involved asking providers the following questions:
  • How do you arrive at reasonable service levels for your service recipients?
  • Do you have penalties or incentives tied to SLAs?
  • Do you survey customer satisfaction levels?
  • If so, how are the results of the survey used?
• Expertise with technical support/operations/tools: We evaluated the service provider's depth and breadth in help desk service technology areas. We looked at each service provider's skills and capabilities in help desk service environments and in the application of specific management tools, and at associated personnel's expertise in satisfying the requirements of deals. This involved asking:
  • What are the principal standards, solutions and systems that your company can manage in help desk service engagements?
  • Exactly what help desk services do you provide?
  • Do you have specialized operational processes or tools for help desk service management?

Criteria Weighted "Standard"

Market Responsiveness and Track Record: We looked at each service provider's ability to respond, change direction, be flexible, improve continuously and achieve competitive success as opportunities develop, competitors act, customers' needs evolve and market dynamics change. We reviewed the following areas:

• Client innovation: This involved asking:
  • Assuming your company pays attention to emerging trends and developments in the help desk service market, how do you share the resulting knowledge with your clients?
  • Do you provide customers with advice and recommendations regarding innovations and tools?
  • If so, how do you present them?
  • How do both parties meet their strategic and operational goals, and respond to business and technology changes?
  • What examples of innovation and thought leadership have you brought to bear in client engagements?
  • What examples can you provide of investments that your organization has made to stay ahead of competitors?
  • During the past 12 to 18 months, what innovations have you brought to market?
• Continuous improvement: This involved asking:
  • Do you use results from service-level assessments to feed the continuous improvement process?
  • How do you measure customer satisfaction?

Criteria Weighted "Low"

Overall Viability (Business Unit, Financial, Strategy and Organization): This involved an assessment of the organization's overall financial health, the financial and practical success of the business unit, and the likelihood of the business unit continuing to invest in services and develop a state-of-the-art service portfolio.

Source: Gartner (July 2012)

Completeness of Vision

We analyzed each provider's completeness of vision according to the following criteria:

• Offering (product) strategy
• Practice area
• Operational/tool expertise
• Business model
• Methodologies
• Management acumen
• Market understanding
• Innovation
• Marketing strategy
• Sales strategy
• Vertical market/industry strategy
• Geographic strategy
• Regional capabilities
• Alliances and partnerships

The Completeness of Vision axis reflects each service provider's potential for success by analyzing its view of the market, service operating model, and strategic plans for growth and service improvements. Gartner determines each service provider's vision for help desk services on the basis of its presentation to Gartner and direct feedback from extensive interviews with its clients.

We asked each service provider many questions and evaluated each on its ability to articulate logical statements convincingly about market directions, innovations, customers' needs and competitive forces. Ultimately, we rated providers on their understanding of how they can exploit market forces to create opportunities for themselves.

For the purpose of scoring, each criterion is weighted "high," "standard" or "low."

Criteria Weighted "High"

Offering (Product) Strategy: We asked each provider to describe its product solution strategy in relation to future market needs. We evaluated service providers on their ability to demonstrate a well-defined and well-articulated vision for helping organizations link help desk services and associated tools and relevant solutions to enterprise technology and business strategies.

We reviewed the following areas:

• Practice area: We evaluated the composition of practice areas serving clients that require help desk services, including relative size, revenue, number of seats supported, geographic reach, leadership provided by the management team and the team's position in the corporate structure.
• Operational/tool expertise: We looked at whether providers used specialized operational processes or tools and whether they used ITIL or another process to manage their workload. In addition to asking providers what operational tool expertise they offered customers, we also asked their reference clients the following questions:
  • Does your service provider use automated password resets as part of the help desk solution for your engagement?
  • Does your service provider have other self-help or self-healing tools (such as knowledge management databases for problem resolution) that your end users can use?
  • If it does, are they effective?
  • Does your provider use remote diagnostic tools to help solve issues remotely prior to dispatching deskside assistance?
  • Do the remote diagnostic tools seem to help resolve problems?

Business Model: We evaluated two factors:

• Methodologies: We asked each provider for a high-level description of its help desk service delivery business model. In addition, we reviewed the procedures (operational, transitional, program management, relationship management and change management) that each provider provides to customers. We focused on the processes and best practices that the provider implements for smooth transitions of systems, people and assets. This involved asking:
  • Is the model embedded in a larger methodology?
  • How does this methodology link technology implementation to business objectives?
  • How do you ensure that sourcing management processes are appropriate and effective for your various clients?
  • How do you ensure that help desk services can deliver high-value services by supporting applications and business processes?
  • Are processes to measure bottom-line business results (or value delivered via an optimized and agile IT infrastructure) embedded in the methodology?
  • If so, what are the key features for measuring results?
  • What practices does your organization use to ensure and control quality?
• Management acumen: We evaluated the management structure each provider uses to support and manage customers, as well as the experience of its managers, because these factors are directly associated with the success of a provider. Having good plans and the people to carry them out is essential. Deals are good for both parties when the provider's managers focus on ensuring that deals meet their clients' needs and on satisfying the provider's profit targets. Therefore, our evaluation involved asking:
  • How experienced and skilled is the management team?
  • How are customer issues addressed?
  • How experienced and skilled are the executive management team and the key customer-facing managers?
  • How are customer issues addressed?
  • Does the customer have access to the appropriate level of management within the provider?

Criteria Weighted "Standard"

Market Understanding: We asked each provider to describe its strategic plan and vision as it relates to help desk services, as well as its commitment to aligning services with future market needs. We also evaluated each service provider according to its ability to demonstrate a well-defined and well-articulated vision for helping organizations link help desk services to enterprise technology and business strategies. This involved asking:

• How would you differentiate your strategic plan and vision from those of your competitors?
• What is your company's heritage in this area?
• How long have help desk services been part of your service portfolio?
• How has it evolved and grown?
• How will it maintain a leading position in a challenging market?

Innovation: We evaluated each service provider's position in the market as a thought leader and innovator. We assessed each provider's leadership and supporting investments to develop innovative strategies in the help desk services market. This involved asking:

• How does your company stay up to date with technology and tools?
• Do you have alliances with other suppliers?
• Do you offer innovative services to your customers?
• How do you offer innovations to your customers?
• What investments is your company making to sustain and enhance its vision for innovative help desk services?

Criteria Weighted "Low"

Marketing Strategy: We evaluated each provider's strategy and approach to the market and how it promotes help desk services. We asked each provider to supply a high-level sales organization chart to demonstrate its go-to-market strategy and assessed each provider's capability to articulate its value proposition and differentiate its services. We also evaluated each provider's penetration of industries and ability to apply industry-specific expertise in its main industry and other industries. We looked at its ability to demonstrate expertise in vertical markets and business processes that are underpinned by help desk services. This involved asking:

• How many dedicated personnel do you have?
• How does your company measure the effectiveness of the business development model?
• What training do marketing people receive?

Sales Strategy: We evaluated each provider's sales strategy and ability to sell help desk services. This involved asking:

• How many dedicated personnel do you have?
• How does your company measure the effectiveness of the sales organization?
• What training do salespeople receive?
• What is your sales strategy for help desk services?
• Do you have standard sales processes, and do you use sales productivity tools?
• How do you respond to requests for proposals?

Vertical/Industry Strategy: We evaluated each provider's strategy to direct resources, and the skills and offerings it has to meet the specific needs of individual market segments, including industries. We assessed the extent to which providers have penetrated industries and their abilities to apply industry-specific expertise in its main industry and other industries. We also evaluated their ability to demonstrate expertise in vertical markets and business processes that are underpinned by help desk services.

Geographic Strategy: We reviewed the following areas:

• Regional capabilities: We evaluated each service provider's strategy to direct resources, skills and offerings to meet the specific needs of regions outside its "home" or native geography (directly or through partners, channels and subsidiaries) as appropriate for that geography and market.
• Alliances and partnerships: We evaluated each service provider's relationships with product providers or other service providers to add value, provide full-service solutions or bring innovation closer to clients. In particular, we looked at providers' abilities to demonstrate that they had selected strategic relationships that are well-defined and can seamlessly link into many client environments.

Source: Gartner (July 2012)

Quadrant Descriptions

Leaders

Providers in the Leaders quadrant are performing well, have a clear vision of market direction and are actively building competencies to sustain their leadership positions in the market. The following providers (listed in alphabetical order) are Leaders in this Magic Quadrant:

• Atos
• CompuCom
• CSC
• Dell
• HCL Technologies
• HP
• IBM
• Unisys
• Xerox

All these providers have demonstrated that they have significant help desk outsourcing experience and understand the dynamics needed to deliver help desk services successfully. Experience weighs heavily in the Leaders quadrant.

Challengers

Providers in the Challengers quadrant execute well. However, they have a less well-defined view of the market's direction, so they may not be aggressive in preparing for the future. The following providers (listed in alphabetical order) appear as Challengers in this Magic Quadrant:

• CGI
• Ciber
• Genpact
• Pomeroy
• Stefanini
• Wipro

These providers have demonstrated a solid base of satisfied help desk outsourcing clients. Overall, each provider in the Challengers quadrant has great potential to become a market leader, if it can enhance its strategic vision and broaden its service offerings to meet organizations' future needs.

Visionaries

Providers in the Visionaries quadrant have a clear vision of the market's direction and are focused on preparing to execute that vision, but they can improve their service delivery. The following provider appears as a Visionary in this Magic Quadrant:

• Fujitsu

Niche Players

Providers in the Niche Players quadrant focus on a particular segment of the client base, as defined by characteristics such as size, vertical-market focus, selective help desk service offerings or time in the market. The following providers (listed in alphabetical order) appear as Niche Players in this Magic Quadrant:

• Maintech
• Tata Consultancy Services

Niche Players are viable options for help desk outsourcing. Although they might have limited experience in the general or commercial North American markets, or might provide only specific service offerings, they have a broad spectrum of delivery capabilities for help desk outsourcing.

This Magic Quadrant is designed to help organizations identify and evaluate help desk outsourcing external service providers in North America. The providers assessed can all provide help desk services, but their competencies and offerings vary. Clients should base their selections on detailed evaluations of their outsourcing scope, objectives and evaluation criteria (including functional and technical requirements), as well as the providers' ability to fulfill the scope while satisfying key evaluation criteria.

The market for help desk outsourcing services is mature. However, Gartner has added one service provider to this year's Magic Quadrant and excluded three providers that appeared in last year's. The main reasons for shifts in the service provider landscape in this sector are mergers and acquisitions; the addition of tools that improve end-to-end delivery capabilities, as well as alternative call request channels, such as email, instant messaging and Web access, which are now typically included in help desk service offerings; and the expansion of complementary infrastructure offerings, such as data center services and network services, by providers from other sectors. Service providers that have participated in this help desk outsourcing Magic Quadrant for many years recognize the capabilities of other vendors that have not, especially those that have never previously competed in this market but that now offer tools, such as those for remote infrastructure management, that are gaining more of a presence in it. Providers already established in the help desk market have access to, and are using, these new tools and technologies, and this is leading to process changes. This, in turn, is resulting in changes in the competitive positioning of providers in the North American help desk outsourcing market.

All service providers in this market are using standardized tools and methodologies, such as ITIL, Six Sigma, Lean Six Sigma and ISO 20000, to help standardize practices and reduce costs. This has become a primary requirement to compete, rather than a differentiator. This year, most service providers are using these and other common processes and procedures to improve their delivery standards.

The competitive landscape, extensive client choices, continuing economic challenges and a zeal for cost cutting are keeping the price of help desk outsourcing low. This has driven many service providers to include alternative geographic locations for help desk agents. These locations may be onshore, nearshore or offshore.

We continue to see mixed results from the offshore alternatives. Clients need low-priced help desk services, but also recognize the need to balance price with value. As such, service providers are working hard to improve their help desk solutions and the quality of offshore and nearshore delivery centers. They are striving to ensure consistent and transparent delivery, regardless of help desk delivery location. However, clients must still review service providers' offshore delivery skills, paying particular attention to incident resolution and customer satisfaction, before deciding on help desk service delivery locations. This will help them avoid common problems.

As in previous years, the help desk outsourcing capabilities of service providers vary. Some concentrate on specific vertical markets or end-user roles. We have noted these vertical markets in the preceding analysis.

Clients are generally very satisfied with the services of help desk outsourcing providers in North America. On a scale of one to five, the average customer satisfaction rating is about four, mostly thanks to service providers' adoption of methodologies, processes and services that enable them to deliver better services. As last year, a high proportion of the service providers fall into the Challengers and Leaders quadrants.

The North American help desk outsourcing market will grow at a CAGR of 3.6% from 2012 ($11.4 billion) to 2016 ($13.2 billion). In 2011, this market was worth $11.1 billion.