Magic Quadrant for SAP Implementation Service Providers, Worldwide

8 August 2013 ID:G00248194
Analyst(s): Susan Tan

VIEW SUMMARY

This Magic Quadrant evaluates vendor capabilities for implementation services across multiple SAP applications and technologies among 18 providers. Use this Magic Quadrant to help identify service providers that can provide a broad range of SAP implementation services across multiple SAP solutions.

Market Definition/Description

This document was revised on 9 August 2013. The document you are viewing is the corrected version. For more information, see the Corrections page on gartner.com.

The aim of this Magic Quadrant is to evaluate full service providers for a broad range of implementation services across multiple SAP applications and technologies. Clients can use this Magic Quadrant to help identify and evaluate the right providers of a broad range of SAP services for their organization, such as when implementing a multiple track program. This Magic Quadrant is not suitable for clients looking for best-of-breed service providers for a specific module, application or industry. Gartner documents covering CRM services, supply chain services or business intelligence (BI) services are better-suited for such purposes.

There are more than 3,700 service partners worldwide in the SAP ecosystem. This Magic Quadrant assesses 18 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, geography and other factors.

In this Magic Quadrant, we evaluate service providers for SAP programs that include:

  • Ability to provide a comprehensive set of consulting, system integration and implementation services across multiple SAP applications, products and technologies
  • Ability to service multiple industries (see Note 1) in multiple geographies (see Note 2)

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 when they are part of the SAP program. 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.

Methodology

Gartner evaluates service providers on their Ability to Execute and their Completeness of Vision. Evaluation is informed by a comprehensive set of primary and secondary research activities, including 236 client references supplied by the evaluated service providers, feedback from Gartner clients and insights from client inquiries throughout the year, a detailed vendor survey, briefings, and information from publicly available information. This research was peer-reviewed by 12 other Gartner analysts; their views and comments were incorporated. In addition, this document was presented and defended at a Gartner Application Services Research Community session. For more details regarding the methodology, see the Evidence section.

Magic Quadrant

Figure 1. Magic Quadrant for SAP Implementation Service Providers, Worldwide
Figure 1.Magic Quadrant for SAP Implementation Service Providers, Worldwide

Source: Gartner (August 2013)

Vendor Strengths and Cautions

Accenture

Accenture has the largest SAP service practice globally, with 38,000 professionals, of whom about a third are in global delivery centers. In the last 12 months, it delivered SAP services to more than 1,100 clients globally. Implementation accounts for an estimated 68% of its SAP business globally in 2012, with the rest coming from infrastructure services, hosting and application management services. In 2012, Accenture derived its SAP implementation business from 16 out of the 22 industries defined in this Magic Quadrant, with the main ones being oil and gas, consumer goods, energy and utilities, public sector, retail, and mining and construction. Accenture derives the majority of its SAP implementation business from companies with more than 10,000 employees.

Strengths
  • Scale and global reach — Accenture has the depth and breadth of capabilities to implement large, complex multiyear global SAP-enabled transformational initiatives for the largest companies. It has a good spread of consultants across different regions, and it is a good fit for large global programs that require global reach and onshore resources.
  • Delivery predictability and leadership — Accenture brings its proven methodologies; a strict discipline and governance; a broad range of tools, frameworks, industry process maps and accelerators; and an industrialized process to its engagements, ensuring a high level of predictability for the most complex programs. Clients value Accenture's ability to provide leadership, discipline, independent point of view, best practices and stakeholder alignment.
  • Investments in SAP practice — Globally, Accenture has 11 innovation centers for SAP solutions that house 17 industry-specific "Day in the Life" business and functional scenarios that demonstrate the application of Hana, SAP Business Analytics, Mobility and Cloud products, and offer a technology platform to help clients develop pilots and prototypes. Talent investments include 400 trained Sybase resources, more than 450 SuccessFactors-skilled resources, more than 500 professionals with experience in Ariba, more than 50 consultants working on Business ByDesign and OnDemand (Travel, CRM, and Sales and Operations Planning [S&OP]) projects, and more than 700 professionals trained in Hana. Such investments allow clients to tap into its knowledge, thought leadership and expertise.
  • Multidisciplinary competencies — Accenture can bring together capabilities from different parts of its organization to bear on SAP programs, including business process, industry and change management expertise to complement its SAP application knowledge and a solid well-tested methodology that includes business value realization activities and deliverables.
Cautions
  • Client tiering — Accenture targets clients that have the potential and willingness to partner strategically with Accenture beyond a single project. Companies not in this category should perform due diligence to ensure satisfactory resource availability and senior-level attention.
  • Resourcing gaps and inconsistency — Even with Accenture's scale, some clients in markets where SAP skills are limited have reported that it sometimes has difficulty finding the right skills for the engagement. Similarly, resource quality and experience for the same roles can vary widely.
  • Risk-averse stance — Accenture is generally cautious, and this stance can be manifested as inflexibility in contract and pricing discussions. Even though Accenture does engage in fixed-price or fee-at-risk arrangements, clients indicate Accenture can be conservative in such arrangements, which can lead to protracted discussions, many protective clauses and a risk-adjusted pricing.

Atos

Atos has nearly 10,700 SAP-skilled professionals. An estimated 43% of its global SAP revenue is derived from implementation services; the remainder (57%) is derived from infrastructure services, hosting and application management. Atos became an SAP global value-added reseller in 2012, providing coverage in more than 35 countries. About a third of its SAP professionals are located in global delivery centers managed globally as part of Atos global P&L. In 2012, Atos derived its SAP implementation business from 18 out of the 22 industries defined in this Magic Quadrant, with the main ones being industrial, public sector, energy and utilities, and oil and gas. Atos derives the majority of its SAP implementation business from large companies with more than 10,000 employees.

Strengths
  • Expertise in selected offerings — Atos has invested in and has more than 10 years of experience with large and complex consolidation and harmonization programs, mostly for Europe-headquartered clients with global reach. It is a leading provider in sustainability and applying SAP sustainability solutions for energy and sustainable operations. In addition, it has a good track record in implementing Syclo mobile products as well as developing mobile apps to extend SAP products.
  • Industry focus — Through its acquisition of Siemens IT Solutions and Services (SIS) in July 2011, Siemens is now the largest client and shareholder of Atos. Implementing SAP for Siemens' various units has increased Atos' focus on and expertise in their industries, which include manufacturing, the public sector and healthcare, 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 the manufacturing industry, including the manufacturing integration and intelligence (MII) solution, and chemicals. It is now expanding into telecommunications and media, and financial services.
  • Investments in SAP practice — Atos is investing in a rich set of add-on products and extensions, such as co-innovating with SAP to develop a mobile Warehouse Management extension to SAP Inventory Manager and other products, rapid deployment solutions for compliance, and cloud-based sustainability analytics. Atos is also investing heavily in Hana. It has a Hana Lab Service for clients to perform proof of concept and tryouts, and it has a Hana private cloud for platform as a service and software as a service (SaaS) and Hana One for testing.
Cautions
  • Global coverage — Atos is still a relatively minor player outside its main markets in Europe. Its key strength continues to be in Europe, where it originates more than two-thirds of its business, and this business includes implementation outside Europe from European clients.
  • Resourcing challenges — Although clients are generally satisfied with Atos, clients continue to note Atos' use of subcontractors to supplement its project teams. They note that the subcontractors are typically not of the same caliber as Atos' own consultants.
  • Vision, business and industry expertise — While Atos' SAP application and system integration expertise are rated highly by clients, some clients noted that Atos can improve on its vision and thought leadership, business acumen, and industry expertise.

Capgemini

Capgemini has 13,500 SAP-skilled professionals. An estimated 70% of its global SAP business is derived from implementation, and 30% is derived from infrastructure services, hosting and application management. About a third of its SAP professionals are located in global delivery centers. Capgemini boasted more than 1,300 SAP clients worldwide in 2012. In 2012, Capgemini derived its SAP implementation business from 16 out of the 22 industries defined in this Magic Quadrant, with the main ones being oil and gas, industrial, consumer goods, retail, life sciences, and utilities and energy. Capgemini derives its SAP implementation business from companies of all sizes.

Strengths
  • Alternative delivery and pricing — Capgemini continues to innovate on delivery and pricing models that offer clients different alternatives to buying and paying for SAP systems. For example, its branded "OnePath" package includes several of its preconfigured industry solutions that are offered as a bundle of software and services — SAP license, design, implementation, infrastructure services, application management, hosting and business process outsourcing (BPO) — and that can be bought on a subscription basis for ease of adoption and consumption.
  • SAP application expertise and cultural alignment — Clients are generally impressed with Capgemini's SAP application and product expertise; commitment to the success of the program; flexibility to adapt to their culture and their constraints and deal with issues as they arise; and strong senior leadership involvement.
  • Investments in SAP practice — Capgemini has made significant investments in its SAP practice, including a public cloud offering via a partnership with Amazon Web Services (AWS) and mobility co-innovation on a mobile Direct Store Delivery application. Furthermore, it has trained more than 240 consultants on SAP Hana, built various Hana solution scenarios (for example, Xtreme POS Analytics, Smart Meter Analytics and Anti-Terrorism Squad solution), and created an SAP Hana center of excellence (COE) with three Hana hardware partners (HP, IBM and AWS). It has a co-innovation agreement with SAP to develop new applications for the retail industry built on SAP Hana and aims to bring to market 15 to 20 applications built on top of SAP platforms for various industries within the next 24 months.
Cautions
  • Sporadic presence in Asia/Pacific — Capgemini's traditional region is EMEA, which continues to provide more than half of its business. It is growing rapidly and increasing its reputation and brand in North America. Its acquisition of CPM Braxis has improved its presence and delivery capabilities in Latin America, particularly in Brazil. However, its local presence in Asia/Pacific is sporadic, and the majority of its consultants based in Asia/Pacific are in global delivery centers servicing European and North American clients.
  • Inconsistency in resource quality — While Capgemini clients are overall satisfied with its delivery, some clients have reported struggles during the project with resources that are not a good fit and need to be replaced, a bench that is not deep enough for some needed skills, and some resources that are not familiar with their own tools and methodologies.
  • Discipline in enforcing best practices not always practiced — While its collaborative style is appreciated by clients, unless client sponsors give explicit instructions to its consultants to enforce the governance, Capgemini has a tendency to give in to pressure from business units to configure solutions that align to clients' current practices versus best practices. Capgemini is deploying a framework to address this.

CGI

CGI, a full-service IT services provider headquartered in Canada, acquired U.K.-based Logica in 2012, resulting in a combined entity with more than 4,000 SAP-skilled professionals. An estimated 65% of its SAP business is derived from implementation; the rest is from infrastructure services, hosting and application management. About a third of its SAP professionals are located in global delivery centers. In 2012, CGI derived its SAP implementation business from 17 out of the 22 industries defined in this Magic Quadrant, with the main ones being public sector, utilities and energy, and manufacturing. CGI derives the majority of its SAP implementation business from companies with more than 2,500 employees.

CGI has highly satisfied clients and is a strong candidate in selected markets and solutions; it is positioned in the Niche Players quadrant chiefly because of its smaller scale, its lack of a balanced global coverage, its strengths in a limited number of industries and limited track record in implementing large global projects.

Strengths
  • Strengths in selected markets — More than 60% of CGI's SAP implementation business is derived from the public sector, manufacturing and utilities. Clients cite CGI's industry knowledge and consultants experienced in these industries as key strengths. In addition, CGI has a strong focus on asset-intensive and complex logistics solutions, including the application of mobile solutions in these solutions.
  • SAP application expertise — Clients are generally impressed with CGI's SAP and technical expertise, as well as its ability to shape solutions in alignment with the strengths of the product and business requirements.
  • Delivery focus — Clients are impressed by CGI's commitment to delivering their projects both on time and on budget while meeting client requirements. When challenges arise, CGI displays flexibility in its approach and resource staffing to enable the project to get back on track.
Cautions
  • Small practice outside EMEA — More than 90% of CGI's SAP implementation business is derived from EMEA (with a concentration in the U.K., France and Sweden) as a consequence of the Logica acquisition. While legacy CGI is strong in North America, its SAP implementation business was light and continues to be so today. While CGI has specific strengths in some countries, such as SAP CCS in Brazil, it is a relatively small player in Latin America and Asia/Pacific.
  • Smaller projects — CGI derives the majority of its SAP implementation business from smaller projects, cautioning its more limited track record in implementing large deals.
  • Inconsistent capabilities — While overall client satisfaction is very high, some clients have indicated they would like to see higher-quality project managers, more diverse skill sets and higher-skilled offshore resources.

Cognizant

Cognizant is one of the fastest-growing IT services firms. It is based in the U.S. but known for its India-based offshore model. Cognizant has more than 6,700 SAP-skilled professionals. An estimated 55% of its global SAP business is derived from implementation; the other 45% is from infrastructure services, hosting and application management. About 70% of its SAP professionals are located in global delivery centers. In 2012, Cognizant derived its SAP implementation business from 16 out of the 22 industries defined in this Magic Quadrant, with the main ones being retail, life sciences, oil and gas, and utilities and energy. Cognizant derives the vast majority of its SAP implementation business from companies with more than 2,500 employees.

Strengths
  • Strong growth — Cognizant's SAP practice has consistently grown rapidly over the last few years, a result of strong sales, account management and delivery capabilities. It targets specific industries and domains for investments, and it continues to capitalize on its cost-effective offshore delivery model and strength in testing services.
  • Focus on selected verticals and domains — Cognizant's SAP practice has a focus on the following industries: retail, consumer packaged goods (CPG), life sciences/healthcare, media and entertainment, manufacturing and logistics and, more recently, banking. Within each of the target verticals, Cognizant has products and intellectual property (IP) to differentiate its offerings (for example, an aggregate spend tracking solution in life sciences/healthcare, an IP management solution in media, and a convergent charging solution for the communications and high-tech industries). It also focuses on a few key areas for investments: supply chain, consolidation and harmonization, human capital management (HCM) and SuccessFactors, CRM, mobility and Hana.
  • Delivery focus — Clients are impressed by Cognizant's focus on successfully delivering the project, its willingness to work with the client to overcome any challenges, its commitment to a long-term partnership and its flexibility in adapting to requirement changes.
Cautions
  • Limited presence in Latin America and Asia/Pacific — Cognizant's strongest region is North America, where it derived an estimated 70% of its SAP implementation business. It is growing rapidly and increasing its reputation and capabilities in Europe, both organically and through acquisitions (such as the acquisition of Germany-based C1 Group). Its local presence in Latin America and Asia/Pacific is sporadic, and the majority of its consultants based in Asia/Pacific are in global delivery centers servicing European and North American clients.
  • Gaps in project delivery capabilities — While clients are generally highly satisfied with Cognizant's technical and SAP application expertise, Cognizant has some work to do to round out its delivery capabilities. It needs to improve its project management, change management and business capabilities. Its consultants need to act more like leaders and be more proactive in bringing ideas as well as issues to clients' attention.
  • Limited number of industries served — Outside its focused industries, Cognizant has limited industry and process skills. Its industry and process expertise is strongest in retail, CPG and life sciences; it is developing similar capabilities in media/entertainment and manufacturing/logistics.

CSC

CSC has more than 6,500 SAP-skilled professionals. About half of the SAP professionals are located in global delivery centers. An estimated 43% of its SAP business is derived from implementation, and the rest is derived from infrastructure services, hosting and application management. In 2012, CSC derived its SAP implementation business from 16 out of the 22 industries defined in this Magic Quadrant, with the main ones being public sector, aerospace and defense, oil and gas, and communications. CSC derives the majority of its SAP implementation business from companies with more than 1,000 employees.

Strengths
  • Global alignment and renewed investments — As a result of CSC's global reorganization, its SAP implementation practice is now a core part of its consulting practice, making it easier organizationally for CSC to bring consulting capabilities to its SAP engagements. The reorganization also allows CSC's SAP practice to drive greater consistency across geographies, align with its global industry teams and increase cooperation among CSC units to offer more seamless integrated solutions. Among some of its key investments are industry-specific solutions, mobility and Hana. Leveraging more than seven years of its Syclo partnership, CSC's GreenGrid solution is built on Syclo's platform, and CSC is jointly working with Syclo on a field force solution. CSC is also creating new Hana solutions, including one for insurance analytics to reduce churn.
  • 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 and the U.S. Internal Revenue Service's Integrated Financial System. CSC has approximately 325 U.S. federal SAP experts, specializing in solutions such as SAP financial management, federal logistics solutions, SAP fraud, waste and abuse, SAP mobility, and big data solutions, including Hana.
  • Partnership approach — Clients comment that CSC takes a true partnership approach that is open and honest, even with regard to its own gaps in capabilities. Clients are impressed by CSC's project management capabilities, SAP technical and architectural expertise, reuse of assets to reduce effort and risk, and commitment to delivery.
Cautions
  • A company in transition — While CSC's commitment to the SAP practice is clear, it is nevertheless a company in a turnaround mode, with its associated problems of attrition and retention of key resources, and uncertainty in its ability to really transform into a globally integrated, industry-aligned, geographically consistent implementation practice.
  • Gaps in skills in some newer technologies — While CSC is highly competent in core products, clients have found that CSC still has some gaps to fill in some of the newer SAP areas and niche technologies. However, CSC is honest with clients about these gaps, and together they can fill them either with new hires or contractors.
  • More demonstrated leadership required — Clients appreciate CSC's collaborative style but want CSC to demonstrate more leadership, such as giving more input on best practices and ideas on what clients should do. Having a better mix of technical staff and staff with business knowledge/experience in the area that CSC is implementing will also improve the ability to provide more advisory to clients.

Deloitte

Deloitte has more than 11,000 SAP-skilled professionals worldwide. About a quarter of its SAP professionals are located in global delivery centers. Nearly 90% of its SAP business is derived from implementation, and the rest is from its emerging application management practice. In 2012, Deloitte derived its implementation revenue from a balanced set of industries. Deloitte derives the vast majority of its SAP implementation business from companies with more than 2,500 employees.

Strengths
  • Multiple competencies — 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. In addition, Deloitte has "feet on the ground" in 150 countries, allowing it to bring knowledge of local laws, regulations, business practices and culture to any engagement.
  • Industry and value approach — 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, an attractive value proposition in their SAP-enabled business transformation journey. Deloitte's ability to offer accelerators and preconfigured solutions, based on leading practices within the industry, is another plus.
  • Solid skills — Deloitte's core SAP program skills are overall solid. Clients perceive its consultants to be knowledgeable with good application, technical and process knowledge. Change management and program management skills have also been cited as positive.
Cautions
  • Premium price — Pricing is one of the most common reasons for clients to disqualify Deloitte during the competitive bidding process. Its higher-blended price is often due to Deloitte's business-led approach that incorporates a higher percentage of consulting resources — such as change management and business process consultants — into the project team mix. Although it has significantly grown its offshore capabilities, Deloitte also tends to utilize a lower percentage of offshore resources compared with some of its competitors, which also drives up its overall price.
  • Uneven capabilities — Although Deloitte has taken a lot of steps in recent years to improve global consistency, capabilities continue to be uneven across different countries. Capabilities in single-country engagements in emerging and smaller markets are still maturing, and consistency of capabilities can be an issue, especially when local resources are required.
  • Challenge resourcing niche skills — While Deloitte is highly competent in core products, some clients have found Deloitte is challenged in resourcing certain skills, particularly some of the newer SAP products and niche capabilities. Clients should work with Deloitte to select appropriate consultants for individual projects to ensure that quality and expertise levels are met.

Fujitsu

Fujitsu has more than 2,700 SAP-skilled professionals, of whom about a third are located in global delivery centers. An estimated 59% of its SAP business is derived from implementation, and the rest is derived from infrastructure services, hosting and application management. In 2012, Fujitsu derived SAP implementation revenue from 20 of the 22 industries defined in this Magic Quadrant, the key ones being retail, oil and gas, utilities and energy, consumer goods, high tech, and public sector. Fujitsu derives the majority of its SAP implementation business from companies with more than 2,500 employees.

Fujitsu has strong capabilities in Asia/Pacific and Japan and in select solutions, as well as has high client satisfaction; it is positioned in the Niche Players quadrant chiefly because of its smaller scale, lack of a balanced global coverage and limited large global project implementation track record compared with others in this Magic Quadrant.

Strengths
  • Strength in Asia/Pacific and Japan and select solutions — As part of a huge Japanese company, Fujitsu has strong name recognition, client relationships and solid SAP capabilities in Asia/Pacific, especially in Japan. Nearly three-quarters of its SAP implementation business is derived from Asia/Pacific and Japan, and the rest is nearly evenly split between North America and EMEA. Fujitsu has focused on investing in selected solutions, including a catch weight management solution for the meat processing industry, a chargeback management solution for wholesale and distribution, and a revenue recognition solution for the high-tech industry.
  • Knowledge of client environment and accountability — For Fujitsu's existing managed service clients, Fujitsu 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. Having Fujitsu as the provider of both project work and support enables a smoother transition and better accountability.
  • Client satisfaction — Fujitsu's clients are generally highly satisfied with Fujitsu's resources and quality of work. They cite Fujitsu's knowledge of standard SAP solutions, good quality resources and flexibility as key strengths.
Cautions
  • Limited large project track record — A large portion of Fujitsu's implementation engagements are relatively small engagements, enhancements from its managed service clients and staff augmentation deals, cautioning its more-limited capabilities to prime large deals.
  • Smaller scale — Fujitsu is a smaller player in SAP implementation compared with other companies in this Magic Quadrant. As such, it lacks the bench strength to support the full set of SAP product implementations. Although Fujitsu is consolidating operational management and starting to standardize service delivery in operations, these changes are still works in process, and currently, it has limited ability to create synergies and leverage resources across different countries, even with a global matrix organization.
  • Coordination — Clients indicate that Fujitsu can do a better job of coordination, both in the onshore/offshore team coordination as well as projects to support team coordination.

HCL

HCL is the enterprise application division within HCL Technologies, which acquired the U.K.-based SAP specialist, Axon, in 2008. HCL has more than 7,300 SAP-skilled professionals, of whom more than half are located in global delivery centers. An estimated 68% of HCL's SAP business is derived from implementation, and the rest is derived from infrastructure services, hosting and application management. In 2012, HCL derived SAP implementation revenue from 13 of the 22 industries defined in this Magic Quadrant, the key ones being aerospace and defense, oil and gas, utilities and energy, transportation, consumer goods, manufacturing, and life sciences. HCL derives the majority of its SAP implementation business from companies with more than 1,000 employees.

Strengths
  • Focus on benefits realization — One of the first service partners to embed formal benefits realization methodology into SAP program delivery, HCL works with clients to deploy solutions with tangible business benefits, enabled through a comprehensive set of processes. These processes include 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 delivery.
  • Deep expertise — Overall, HCL has strong expertise across the core set of SAP products. By industry, it has a particular focus and strength in aerospace and defense, high tech and manufacturing, consumer goods, utilities and energy, and travel and transportation. In particular, it has deep industry knowledge in maintenance, repair and operations (MRO) for aerospace and defense, and it brings to engagements its iMRO product, an SAP-endorsed, upgrade-compatible industry solution add-on.
  • Work style — HCL continues to demonstrate flexibility in contracting. It finds ways to resolve commercial issues instead of relying on the contract. Clients comment that HCL is easy to work with and has deep commitment to deliver the program. As issues or challenges arise, HCL is responsive and able to provide practical advice and solutions to resolve these challenges.
Cautions
  • Limited presence in Latin America and Asia/Pacific — More than 90% of HCL's SAP business comes from North America and Europe. Although HCL is delivering some large SAP programs in Asia/Pacific, its local presence in Asia/Pacific is sporadic, and it has very limited presence in Latin America. The majority of its consultants based in Asia/Pacific and Latin America are in global delivery centers servicing European and North American clients.
  • Bench strength — HCL's bench strength of consultants globally is not as deep its key competitors. Staffing with local resources outside of the major markets can sometimes be a challenge. Its project management and subject matter expert bench are not deep enough, resulting in some clients getting weak resources that needed to be replaced or supplemented.
  • Project attrition — Several clients have commented that HCL appears to have a problem with staff retention, as turnover of project staff is higher than expected, and HCL has to hire many new resources.

HP

With more than 9,200 SAP-skilled professionals, HP is a global provider of end-to-end SAP services. HP delivers these services at client sites and through 18 global delivery centers, where a third of its SAP professionals are located. An estimated 49% of its SAP business is derived from implementations, and the rest is derived from application management, infrastructure services and hosting support. In 2012, HP derived its SAP implementation business from 14 out of the 22 industries defined in this Magic Quadrant, with the main industries being consumer goods, industrial manufacturing, automotive, and high tech. The majority of its SAP implementation business is from companies with more than 10,000 employees, of whom many are also its outsourcing clients.

Strengths
  • Knowledge and accountability — For clients that already use HP for IT outsourcing, HP brings a deep understanding of clients' IT environment and processes that ensures faster implementations and more aligned solutions. HP is also extending its focus on delivering business outcomes in its Run SAP Services, to its implementation programs.
  • Technical capabilities — HP is particularly strong in infrastructure services, including networks, data center and virtualization, security and integration, and Basis skills. It also has strong capabilities and a track record in upgrades, including implementation and testing of enhancement packs, as well as Unicode conversion by utilizing its upgrade factory and automation tools.
  • Client focus — Clients perceive HP as being flexible and focused on a successful outcome. They see HP's SAP business as a client-centric organization that places a high priority in getting the right solution in place and working as one team with the client and other service providers in the client's best interest.
Cautions
  • Capability gaps — Clients have observed that HP has some gaps in implementation capabilities for some niche products in the SAP stack and limited bench strength in others. It uses subcontractors or partners to deliver such skills.
  • Partial business process knowledge — Clients perceive a lower-than-expected level of business process knowledge among HP consultants. For programs that require heavy business process input, HP leverages its alliance partners to jointly deliver.
  • Inconsistent project management skills — The quality of HP's project managers varies significantly. Some clients perceive its project management as a strength, while others comment on it as a weakness.

IBM

IBM has more than 32,000 SAP-skilled professionals. An estimated 60% of its SAP professionals are located in global delivery centers. An estimated 58% of its SAP business is derived from implementation, and the rest is derived from infrastructure services, hosting and application management. In 2012, IBM derived its SAP implementation business from 19 out of the 22 industries defined in this Magic Quadrant, with the main ones being automotive, consumer goods, oil and gas, utilities and energy, life sciences, and travel and transportation. IBM derives the majority of its SAP implementation business from companies with more than 10,000 employees, but its general business division offers SAP services to small and midsize clients using a preconfigured approach.

Strengths
  • Global reach and scale — 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 for the largest companies. In addition, it offers small and midsize clients packaged offerings using its preconfigured industry-specific solutions.
  • Delivery predictability from industrialized approach, structured methodologies and assets — IBM has methodologies for implementing SAP that have been well-tested and improved over many engagements. In particular, it has a structured templatized approach to global rollout that has been proven to be able to handle execution in a highly compressed time frame. IBM also 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.
  • Integrated offerings — As part of a larger corporation, IBM is able to leverage the rest of IBM's capabilities and products into integrated offerings. It is able to bundle IBM's software and hardware with SAP's products and bring to clients a total solution. The SAP practice is also able to use IBM Research to help solve difficult problems.
  • Investments in SAP practice IBM showcases its practical thought leadership and industry expertise by proactively developing assets to help clients take advantage of the power of SAP's analytics, Hana and mobile technologies. Its "Lab for SAP Solutions" showcases end-to-end industry-specific offerings, drives co-innovation activities and provides a forum for customized client workshops to tackle problems or introduce innovative thinking — through the coming together of IBM-developed use cases (such as loyalty management), IBM Research business models and assets (such as its Watson's Advanced Social Analytics Platform), IBM Business Analytics and Optimization expertise, and IBM industry specialists.
Cautions
  • Tight controls and bureaucracy — Some clients indicate that decision making on contracts, approaches and changes can take a long time due to IBM's internal processes. Its corporate structure can sometimes make getting access to resources from certain regions cumbersome.
  • Knowledge reuse — Although IBM has a huge repository of tools, templates and assets from previous engagements, some clients have observed that its consultants are not all equally familiar with what is available, and could benefit from more reuse and leverage of IBM's accumulated assets.
  • Inconsistent resource quality — Although the use of structured methodologies and approaches help mitigate quality differences, the quality of IBM's resources can vary. In several cases in which clients reported initial resource quality challenges, IBM subsequently replaced them with high-quality resources.

Infosys

Infosys has nearly 11,000 SAP-skilled professionals. An estimated 63% of its SAP professionals are located in global delivery centers. About 60% of its SAP business is derived from implementation, and the rest is derived from infrastructure services, hosting and application management. In 2012, Infosys derived its SAP implementation business from 17 out of the 22 industries defined in this Magic Quadrant, with the main ones being automotive, life sciences, consumer goods, high tech, oil and gas, and agriculture, mining and construction. Infosys derives the majority of its SAP implementation business from companies with more than 10,000 employees.

Strengths
  • Value-driven approach — Infosys has developed a transformation framework and a value realization method, which it uses throughout the implementation life cycle to increase the probability of program success and aligns SAP programs with desired business outcomes. Its willingness to sign up for outcome-based pricing based on value realization attests to its faith in this model, even if this fee arrangement is not often taken up by buyers.
  • Co-innovation and investments — Infosys has invested in a rich set of vertical and cross-industry assets, such as Clinical Trial Supply Management, Track and Trace for pharmaceutical companies, Pipeline Integrity Management, Disaster Management, and data migration dashboard for core banking. It also co-develops solutions with SAP (for example, a retail execution mobile app). Investments are also made to align with SAP's strategic directions, including a Hana COE to develop assets and capabilities, and a full set of mobility and cloud offerings.
  • Client satisfaction — Clients indicate Infosys has strong delivery capabilities to support their SAP programs. They particularly appreciate Infosys' flexibility, SAP application expertise, functional knowledge, commitment and dedication to project success.
Cautions
  • Limited experience in Latin America — While it has clients in Latin America, Infosys has limited SAP implementation business from Latin America and few implementation professionals on-site in this region.
  • Thin bench of industry and process expertise — Folding Infosys Consulting into the main Infosys company, reorganizing the majority of its SAP professionals to align with vertical practices, and acquiring Lodestone Management Consulting have accelerated Infosys' business capability. However, this capability is not yet pervasive among project team members, whereby the value gets realized in SAP client programs.
  • Consulting skills — While Infosys is very good at executing clients' requirements, clients also expect Infosys to increasingly challenge them on making the best decisions and standing firm on maintaining standardization. Clients have expected that, with its wealth of experience from past engagements, Infosys can be more assertive in providing ideas and recommendations.

Neoris

Neoris was originated in 2000 from the in-house technology arm of Cemex, a leading company in the building materials industry. Following acquisitions and organic growth, Neoris today has 2,800 SAP consultants, and SAP makes up three-quarters of its total business. It is now one of the largest SAP service providers in Latin America, serving local and Pan-Latin American clients, as well as global clients in a nearshore model. Nearly 80% of its SAP business is derived from implementation; the rest is derived from infrastructure services, hosting and application management. About 60% of its SAP professionals are located in global delivery centers. In 2012, Neoris derived its SAP implementation business from 13 out of the 22 industries defined in this Magic Quadrant, with the main ones being high tech, other manufacturing, and agriculture, mining and construction. Neoris derives the majority of its SAP implementation business from companies and business units with more than 2,500 employees.

Neoris is a very strong candidate for selected solutions such as MII and analytics (business planning and consolidation [BPC], BusinessObjects and BW); and for implementations in Latin America. Clients are generally satisfied with Neoris. It is positioned in the Niche Players quadrant chiefly because of its smaller scale, its focus on selected solutions — which is a good strategy, given its smaller size — and its lack of a balanced global coverage.

Strengths
  • Latin America — Nearly 60% of Neoris' business is derived from this region. It continues to expand throughout Latin America and today has presence in 10 countries in South and Central America. Client feedback indicates that Neoris consultants display the local business and statutory requirement knowledge they are looking for. Its next biggest region is EMEA, where it has a growing presence in multiple countries in Europe and the Middle East. Neoris is also making a big push into the U.S. market.
  • Application and technical expertise — While Neoris has solid core ERP implementation capabilities, as a smaller provider, it has to pick its areas of focus beyond the foundational ERP offerings within the ever-expanding SAP portfolio of products. Focus areas include MII, BPC, CRM, NetWeaver, BW/BusinessObjects, Hana and mobility. Clients indicate that Neoris provides excellent guidance from a technical perspective in these areas and has experienced and knowledgeable resources who work very well with clients' internal team.
  • Total cost of services — Neoris' nearshore model provides high-end resources at competitive costs. For North American clients, Neoris can deliver strong capabilities from lower-cost solution centers close to the U.S. and within the same time zone, ameliorating the time zone, culture and communication issues associated with typical offshore centers. Clients are highly satisfied with Neoris' total cost of services and rated it above average in this category.
Cautions
  • Limited presence in Asia/Pacific and Japan — Neoris is just starting to grow its presence in Asia/Pacific and Japan, where it currently derives less than 2% of its revenue.
  • Partial capabilities and experience in some solutions — Neoris' focus on select solutions means that it has limited resources and experience in other solutions, such as APO, TM, EWM and HCM. Neoris has to rely on the support of partners for the implementation of these solutions outside of Latin America.
  • Project management challenges — While some clients are highly satisfied with Neoris' project managers, some have reported that Neoris has gaps in project management.

NTT Data

NTT Data's SAP practice is formed through the acquisition of a number of companies with SAP skills globally, including Keane, itelligence and Intelligroup. In 2012, all acquired companies were organized and integrated under the NTT Data brand. Keane and Intelligroup were integrated into NTT Data's North American regional business; itelligence continues to use its own name, but it is now under the umbrella of NTT Data Business Solutions. In February 2011, NTT Data launched its SAP Global One initiative, which integrates the various skills, resources and best practices under the NTT Data brand. This initiative brought together more than 6,100 SAP consultants in 32 countries. An estimated 40% of its SAP professionals are located in global delivery centers. About 68% of its SAP business is derived from implementation, and the rest from is derived from infrastructure services, hosting and application management. In 2012, NTT Data derived its SAP implementation business from 21 of the 22 industries defined in this Magic Quadrant, with the main ones being industrial, consumer goods, high tech and automotive. NTT Data derives its SAP implementation business from companies of all sizes — from small enterprises to large corporations.

Strengths
  • Strength in Asia/Pacific and Japan — Consolidation of acquired companies under the NTT Data brand allows for synergies among its network of consulting resources, industry solutions and methodologies, in addition to having a financially strong parent with a well-known brand in Asia/Pacific. An estimated 40% of the consolidated NTT Data's SAP business is derived from Asia/Pacific, benefiting from its strong position in Japan.
  • Solid SAP expertise The individual acquired companies bring complementary strengths to NTT Data's global SAP business, so when NTT Data's project team is able to tap into resources from across the company, it possesses both a solid set of SAP expertise across all segments of the market and a full suite of proven tools to accelerate implementation. In addition, it has 30 Business All-in-One solutions, and leveraging its parent's core competency, it is developing an SAP-based telecom solution.
  • Delivery focus — Clients cite as NTT Data's key strengths its willingness to do whatever it takes to meet project timelines and objectives, with full consideration given to quality, budget, risk and scope.
Cautions
  • Integration is still in progress — Integration is ongoing across NTT Data's collection of acquired companies, each with its own strengths and weaknesses, and target markets. A consistent Global One method has been established for implementations, but 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.
  • Limited large deal track record — Most of NTT Data's engagements are relatively small compared with other vendors, which reflects its focus, but could signal less ability to support large complex deals.
  • Gaps in "soft skills," requirements gathering and project management — While clients are generally pleased with NTT Data's capabilities in implementing SAP applications, they suggest that the company could improve its soft skills, requirements gathering methodology as well as its project management skills. While NTT Data is investing in project management and training, more needs to be done to improve project team's capabilities in these skills globally.

PwC

PwC is a global network of member firms that provide assurance, tax and advisory services. PwC has more than 5,600 SAP-skilled professionals. An estimated 20% of its SAP professionals are located in global delivery centers. Virtually all of PwC's SAP business is derived from implementation. In 2012, PwC derived its SAP implementation business from all 22 industries defined in this Magic Quadrant, with the main ones being industrial, consumer goods, retail, oil and gas, high tech, communications, and utilities and energy. PwC derives the majority of its SAP implementation business from companies with more than 1,000 employees.

Strengths
  • Business transformation approach — 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.
  • Credibility with business executives — PwC's brand and relationships with C-level executives and finance professionals position it well in SAP projects that involve the buy-in and engagement of these professionals. PwC's expertise in finance, risk management and operations enables its consultants to translate technical topics into business language, providing the ability to build strong relationships with the business and IT; these are often cited by clients as key factors in successful implementations.
  • Strong business and consulting capabilities — Overall, clients indicate PwC has strong business process, industry, program management and change management capabilities and is able to bring best practices and ideas to their engagements. PwC has strong functional knowledge in financial transformation, performance management, enterprise asset management, operations, and governance, risk and compliance (GRC). With a global network of firms in 158 countries, PwC also brings to its SAP engagements its deep knowledge of local culture, tax laws, regulations and work styles.
Cautions
  • A maturing practice — Compared with the largest providers, PwC has a smaller SAP consulting practice and, in some parts of the world, is a relative newcomer to the implementation space. PwC continues to invest in capabilities and credentials beyond the finance, performance management and GRC solutions for which it is best-known. While it can draw upon the same foundational capabilities and is hiring rapidly, its track record and experience in some SAP technologies and applications are still developing in certain countries.
  • Inconsistent resource quality — PwC's SAP practice is expanding at a rapid pace — for example, 33% revenue growth in the U.S. practice and 70% resource growth in Asia/Pacific, which includes the offshore centers, in fiscal-year 2012. While growth confers great benefits, such as the ability to invest in the business and hiring great talent, any labor-based practice growing that quickly carries potential risk to deliver quality. While overall project quality has not deteriorated, a few clients have indicated variations in resource quality.
  • Price — While PwC has improved its pricing in the last year, clients continue to point to its higher price as an area for improvement. Part of the pricing differential is due to its ratio of higher-priced business consultants and comparatively limited use of offshore resources. This may be justified depending on the type of project and client's preference for onshore versus offshore work.

SAP Services

SAP Services, the service arm of SAP, delivers SAP implementation services globally through about 15,000 delivery consultants, as well as more than 1,200 custom development consultants and collaboration with more than 7,000 active support professionals. Although it continues to provide prime integrator services that compete directly with its system integration ecosystem, SAP Services is realigning 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. An estimated 20% of its delivery professionals are located in global delivery centers. In 2012, SAP Services derived its SAP implementation business from all industries, but its strategic industries are financial services, retail, public sector and utilities. SAP Services derives the majority of its implementation business from companies with more than 2,500 employees.

Strengths
  • A clear set of services aligned to customer needs — SAP Services 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, packaged solutions for rapid deployment, custom development services for unique functionalities and traditional prime integrator services. SAP Services has been innovating on ways to reduce implementation costs; an extensive set of fixed-fee/fixed-scope Rapid Deployment Solutions [RDS] is the result of such efforts, as are "Assemble to Order" and "Industrialized" delivery models that utilize reuse and repeatability, and increasing proportion of remote delivery.
  • Investments in services to aid adoption of new SAP products A key mission of SAP Services is to drive adoption of new SAP products both by customers and partners. Next Generation Services (NGS), a unit within SAP Services, is dedicated to incubating services to drive market adoption of new products — chiefly, cloud, mobile and Hana. NGS invests in and houses the skills, methodologies and assets for such products, in which the track record of implementation success is limited and skilled resources are scarce, and thus, NGS is a key resource for early-adopter clients.
  • Technical/product expertise — As the service arm of SAP, SAP Services has product experts with the most up-to-date SAP product knowledge, given that a portion of its consultants are embedded within SAP product development. Clients value SAP Services' deep product expertise, which also manifests as lower levels of customization, rapid deployment and the ability to gain maximum value from the product. Clients can tap into SAP Services' deep product expertise through specific service offerings, such as its Innovation Control Center during implementation to minimize customization and maximize value, its Value Partnership program for consulting services, and Education services for project team and end-user training.
Cautions
  • Large-scale business transformation program delivery — In the traditional prime integrator market, SAP Services has successfully completed many projects. Where it struggles in are large-scale business transformation programs with significant process changes. While it has large scale program management expertise and some industry, process and change capabilities, such capabilities are insufficiently pervasive to consistently execute large-scale business transformation programs without heroic efforts by individual consultants. For such engagements, clients should carefully weigh the option of using a large system integrator for the program and engaging with SAP Services for specific workstreams.
  • Multivendor project execution — The flip side of being specialized and highly skilled in one family of products is limited capabilities in other technologies. SAP Services does not have sufficient capabilities to assist in highly heterogeneous, multivendor projects in which SAP solutions are only one of a number of applications and technologies.
  • High hourly rate — SAP Services' hourly rate is higher than its service partners'. This can be a problem for clients that need their procurement department's approval. Whether its total cost of ownership is lower, as SAP Services asserts, is difficult to prove, but fixed-price contracting can be a way for clients to compare like for like.

Tata Consultancy Services

Tata Consultancy Services (TCS), the largest Indian IT services firm, has more than 10,000 SAP-skilled professionals. An estimated 67% of its SAP professionals are located in global delivery centers. About 55% of its SAP business is derived from implementation, and the rest is derived from infrastructure services, application management and hosting. In 2012, TCS derived its SAP implementation business from 19 out of the 22 industries defined in this Magic Quadrant, with the main ones being industrial, consumer goods, retail, high tech, utilities and energy, and life sciences. TCS derives the majority of its SAP implementation business from companies with more than 2,500 employees.

Strengths
  • Execution capabilities — TCS has strong SAP functional and technical expertise, well-trained resources and extensive experience with large projects, making it a reliable execution partner in SAP projects at an attractive price.
  • Investments in assets and new expertise — TCS has invested in a rich set of industry and horizontal assets and solution templates that capture its past experience and increase speed of implementation. TCS continues to be a development partner with SAP (for example, in retail execution, field services and demand signal management), and thus it has an in-depth technical understanding of these products. TCS has trained more than 500 consultants on Hana and has opened an SAP-specific center in Cincinnati, Ohio, for customer experience and proof-of-concept development in Hana, mobility and cloud.
  • Responsive and flexible partner — Clients indicate that TCS has been accommodating and flexible in meeting their changing program demands. TCS is very easy to work with and does not tend to rely on contract terms when dealing with scope changes or request additional funding for small changes.
Cautions
  • Limited experience and presence in Latin America — Currently, TCS has limited SAP implementation business from Latin America and few implementation professionals on-site in this region. However, TCS is actively building SAP capability locally in its global delivery centers in Brazil, Argentina, Colombia and Mexico, and it has succeeded in winning implementation projects, including new areas such as Hana and mobility.
  • Onshore resource challenges — As TCS is heavily oriented toward an offshore delivery model, clients have noticed challenges in finding appropriately skilled resources onshore in multiple locations globally. Delay in getting work visas for Indian consultants to come onshore also contributes to staffing challenges, which can lead to a slow ramp-up of a project. In addition, clients indicate difficulty keeping key resources, especially when personal visa options are available, but this problem also applies more generally to its Indian peer group. TCS's recent inorganic expansion, such as the acquisition of Alti, a French company, will help to address some of these challenges and provide expertise in localized business processes and skilled resources.
  • Business skills — Clients indicate that TCS can improve on its end-to-end business process understanding and business stakeholder engagement and bring proactive suggestions to improve the solution.

Wipro

Wipro has nearly 9,600 SAP-skilled professionals. An estimated 66% of its SAP professionals are located in global delivery centers. About 55% of its SAP business is derived from implementation, and the rest is derived from infrastructure services, hosting and application management. In 2012, Wipro derived its SAP implementation business from 19 out of the 22 industries defined in this Magic Quadrant, with the main ones being industrial, consumer goods, oil and gas, life sciences, and utilities and energy. Wipro derives the majority of its SAP implementation business from companies with more than 2,500 employees.

Strengths
  • Good technical and functional capabilities — Wipro continues to build out a full set of capabilities for SAP implementation that it can take to clients. For newer products or products that it has no experience with, Wipro is open to co-investing with clients. It has successfully delivered numerous large-scale global SAP implementation engagements. Clients generally find that Wipro is able to meet or exceed their technical needs, and its consultants are overall very qualified technically and functionally from the implementation perspective.
  • Solid expertise at an excellent price — Clients generally rate Wipro very highly for its ability to price its services very competitively. While price is a very common reason for disqualifying other competitors, it is a relatively nonissue for Wipro. The ability to provide solid expertise at an excellent price is one of the key reasons for selection.
  • Flexibility — Most of Wipro's clients cite flexibility as one of the things they most appreciate in Wipro. Wipro is flexible both in commercial terms and in terms of resolving issues from the solution design and implementation perspective.
Cautions
  • Project execution needs improvement — Wipro can improve on being more consistent in project execution. While some project managers are very good, others need improvement. A few customers indicate that there is room for improvement in completing the project on time and on budget. Obtaining the right level of skilled resources onshore is sometimes a problem, due to a gap in skill set and visa issues.
  • Reticence in leading — Clients notice that oftentimes, Wipro consultants hold back on their opinions and do not offer their advice. When asked, they are often able to leverage their past experience and knowledge to help but would not do so proactively. Wipro consultants must be more vocal, take more ownership of the program, bring ideas, challenge clients' decision, engage clients' leadership, and improve their soft skills, including communication.
  • Gap in middle management — Wipro has strong senior management and very solid junior people to execute on the projects. It, however, needs to do more — including reducing attrition — to develop its middle management to fulfill key roles in projects.

Vendors Added and 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

Not applicable, because this is a new Magic Quadrant.

Dropped

Not applicable, because this is a new Magic Quadrant.

Inclusion and Exclusion Criteria

The criteria for inclusion of service providers for the Magic Quadrant are based on a combination of quantitative and qualitative measures.

Quantitative Criteria

  • Providers must have a minimum of US$250 million in revenue (estimated for fiscal-year 2012) in worldwide SAP implementation services.
  • SAP implementation services revenue must be derived from clients in at least three of the four regions: North America, EMEA, Latin America and Asia/Pacific (including Japan).
  • No more than 80% of the revenue should be derived from the largest region. A minimum of US$50 million in revenue (estimated for fiscal-year 2012) must be derived from the second-largest region, and a minimum of US$20 million in revenue must be derived from the third-largest region.

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 enterprise clients
  • Overall market interest in and visibility of the provider, determined by serious consideration for selection from enterprise clients
  • Ability to provide consulting and solution implementation services across multiple SAP modules 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 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 "How Gartner Evaluates Vendors and Markets in Magic Quadrants and MarketScopes."

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 or Service: This criterion assesses core services that are offered by the provider and that compete in/serve the defined market. This includes current service capabilities, quality, skills, and so on. Subcategories include:

  • Breadth and depth of capabilities in the full portfolio of SAP applications
  • Capabilities in business/process consulting and industry knowledge
  • Capabilities in other key delivery success factors: project management, change management, communication, and so on
  • Demonstrated track record in successfully executing large complex global engagements

Overall Viability: Viability includes an assessment of the overall organization's financial health and 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. Specific assessment includes the size and growth of the SAP implementation business.

Sales Execution/Pricing: This criterion assesses 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/Track Record: This criterion assesses the vendor's 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 build capabilities to address new SAP products (cloud, mobility and Hana) and markets (emerging countries and new industries).

Customer Experience: This criterion assesses the relationships, products and services/programs that enable clients to be successful with their SAP programs. This criterion also considers client feedback on overall experience working with the SAP application service provider.

Operations: This criterion assesses the ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, ability to manage utilization and attrition, tools, methodologies, knowledge management systems, training programs, global presence, global delivery centers, centers of excellence, and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Table 1. Ability to Execute Evaluation Criteria

Criteria

Weight

Product or Service

High

Overall Viability

Medium

Sales Execution/Pricing

Medium

Market Responsiveness/Track Record

Medium

Marketing Execution

No Rating

Customer Experience

High

Operations

Medium

Source: Gartner (August 2013)

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: This criterion assesses the 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 the service provider's knowledge and articulation of key market direction and trends, and the service provider's reputation as a thought leader.

Marketing Strategy: This criterion assesses 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: This criterion assesses 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: This criterion assesses a service provider's approach to SAP implementation service development and delivery that emphasizes depth and breadth of capabilities, differentiation, and methodologies as they map to current and future requirements, such as enhancements/extensions to SAP products, innovative use cases for Hana and mobility, benefits realization, and continual investments into making delivery speedier, less costly and with reduced risks.

Vertical/Industry Strategy: This criterion assesses 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 templates/preconfigured solutions/process maps and other IP development in selected verticals, industries and processes.

Innovation: This criterion assesses the direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. It also includes reputation as an innovator and co-innovation activities with SAP.

Geographic Strategy: This criterion assesses the provider's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, including global delivery locations, either directly or through partners, channels and subsidiaries, as appropriate for that geography and market.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

High

Marketing Strategy

Medium

Sales Strategy

Medium

Offering (Product) Strategy

Medium

Business Model

No Rating

Vertical/Industry Strategy

Medium

Innovation

Medium

Geographic Strategy

Medium

Source: Gartner (August 2013)

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. The players in this quadrant generally have a global client base, a track record of implementing complex SAP programs globally that support business transformation, and well-balanced business, process and industry consulting and implementation capabilities that are supported by rigorous tools and methodologies.

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. Vendors in this quadrant generally have some gaps in sales, marketing, innovation, geographic presence or offering strategy.

Visionaries

Visionaries articulate important market trends and direction. They have a vision for changing market rules, but they are not in a position to fully deliver and consistently execute. There are no Visionaries in this Magic Quadrant; the vendors with strong vision in this evaluation tend to execute well too, which placed them in the Leaders quadrant.

Niche Players

Niche Players focus on a few segments of the market, such as certain geographies, vertical industries, client segments or functional areas. Their ability to execute is limited to these focus areas and, therefore, is assessed accordingly. Their ability to innovate is also affected by this narrow focus. Many of the providers in this segment were rated highly for customer satisfaction, and many can be considered to be leading players within their niche market focus. Niche Players need to increase their geographic sales and delivery, as well as increase overall breadth and depth of capabilities, innovation and bench strength.

Context

A large service ecosystem supports SAP's customers and helps it sell into organizations. Needless to say, the 18 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. These include (but are not limited to) ABeam Consulting, AspireHR, Bristlecone, Ciber, Clarkston Consulting, Dell Services, EY, Epi-Use, Hitachi Consulting, iGATE, KPMG, Keneos, L&T Infotech, Tech Mahindra, NorthgateArinso, Optimal Solutions Integration, ROC, Sita Corp., Softtek, Sparta (a KPIT Cummins company) and Yash Technologies. Vendor Rating, 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.

This Magic Quadrant analyzes the largest providers of SAP implementation services. The relative positioning of vendors in this Magic Quadrant is based on Gartner's standard Magic Quadrant methodology. We analyze consulting and system integration projects that typically require a blend of process, industry, SAP application and technology, and program and project management skills.

When considering implementation partners for a request for information or request for proposal, clients are advised not to simply select service providers in the Leaders quadrant. All selection requirements are enterprise-specific; consequently, vendors in the Challengers, Visionaries or Niche Players quadrants may prove to be more appropriate for their engagement. For example, each provider will have a different deal sweet spot, reflecting the scale of deals that they do well at, their culture and industry coverage, as well as maturity of service provision that their clients value (see "Deal 'Sweet Spot' Analysis Accelerates Service Provider Evaluation and Selection"). Additionally, clients should not disqualify any potential competitors 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. A Gartner analyst can help with a shortlist of the most suitable candidates based on client requirements.

This Magic Quadrant evaluates only the consulting and system integration capabilities required for discrete project work and excludes multiyear contractual engagements typical of outsourcing agreements.

For this document, we obtained 236 references to the 18 leading SAP service providers to supplement our views based on daily interaction with Gartner clients, as well as detailed feedback from our SAP Enterprise IT Leaders (EITL) members.

Market Overview

While great strides have been made in SAP implementation, the market continues to struggle with age-old challenges:

  • How can enterprises implement faster and less expensively, with less risk and more predictability?
  • How can enterprises ensure that the implementation brings about the business benefits promised in the business case?

Added to these age-old issues are new opportunities and challenges brought about by the ever-expanding new and acquired products in the SAP family — namely, Hana, mobility, cloud and SaaS.

A Large but Highly Competitive Market Has Encouraged Innovation in Implementation

Leading system integrators 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. SAP itself has developed a portfolio of RDS that encompasses highly targeted fixed-scope solutions that can be implemented quickly so clients reap benefits early. Some system integrators are also developing RDS to offer to their clients.

System integrators differentiate on capabilities in newer products, such as in Hana and mobility. These new products are driving a flurry of investment activities among system integrators eager to get in front of demand.

They also co-innovate with SAP or develop applications on top of SAP products to round out the standard functionalities, as well as develop use cases for new products.

System integrators also innovate on newer delivery and consumption models, such as financial re-engineering of bundled hardware, software and services into subscription-based billing. Similarly, they are also bringing to market a complete bundle of services so that it is easy for clients to buy and consume newer SAP products. This typically takes the form of an off-premises complete solution. For example, in the case of mobile solutions, service providers are bringing to the market subscription-based solutions based on SAP's mobile products, such as SAP Mobile Platform, Afaria and applications, so clients can quickly get on the mobile bandwagon — without making a large capital investment or hiring in-house staff with the right skill sets.

Challenges Exist but Can Be Mitigated Through Proactive Planning

SAP implementation is, in the final analysis, a people business. While this Magic Quadrant evaluates the institutional strengths and cautions, every project team and its team members from any one firm vary by expertise, experience, people skills and temperament. Consistency in quality is, by definition, difficult. Leading system integrators have ameliorated this through training, enforced use of common tools, methodologies and knowledge management systems, among other things. But as this Magic Quadrant shows, consistency continues to be a challenge, even for the most mature system integrators. Clients are advised to evaluate both the institutional capabilities and the key people proposed for the engagement when selecting implementation partners.

Leading system integrators have continued to keep their resource utilization — especially onshore resources utilization — high, which has brought about challenges, such as difficulty in staffing projects, delays in finding professionals with the right skill sets (especially for newer SAP products), and project attrition. Some leverage the contractor market to supplement their own employees, which can be a boon in that these contractors are typically highly specialized in their fields, but this approach can also be a big challenge because they are not familiar with the system integrator's methodology and tools, and they have less vested interest in staying on to the end of the project. Clients are advised to ensure their chosen system integrator has the right resources in place within the time frame required and have incentives in place to encourage staff to stay to the end of the engagement or, at a minimum, to the end of a significant milestone.

With some exceptions, clients are generally pleased with the "hard" (for example, application and technical) skills demonstrated by system integrators but find many of the system integrators' "soft" skills somewhat limited. Change management, communications, business acumen and project management continue to be challenges both for the system integrators and the clients. Clients are advised to evaluate the system integrator on these factors and insist on strong candidates with these soft skills in staffing key roles.

Acronym Key and Glossary Terms

AWS Amazon Web Services
BI business intelligence
BPC business planning and consolidation
BPO business process outsourcing
COE center of excellence
CPG consumer packaged goods
EITL Enterprise IT Leaders
GRCHana governance, risk and complianceHigh-Performance Analytic Appliance
IP intellectual property
MII manufacturing integration and intelligence
MRO maintenance, repair and operations
P&L Profit and Loss
RDS Rapid Deployment Solutions
SaaS software as a service
S&OP Sales and Operations Planning
SIS Siemens IT Solutions and Services
TCS Tata Consultancy Services

Evidence

Evaluation in this Magic Quadrant is informed by:

  • Primary research — Face-to-face and phone briefings with the 18 participating service providers in the Magic Quadrant.
  • Primary research — Gartner inquiries and discussions conducted in the past 12 months with service provider and user organization clients.
  • Primary research — Discussions with Gartner clients that generously provided impartial feedback on their service providers.
  • Primary research — Feedback from 236 client references, submitted by the participating service providers, using online surveys and follow-up interviews with a subset of these references.
  • Primary research — A detailed vendor survey covering revenue, staffing, geographic capabilities, industry and process assets, partnerships, joint initiatives, investments and other relevant information.
  • Secondary research — Press releases and publicly available information, including company websites and financial reports.
  • Other Gartner analysts — This document was peer-reviewed by 12 other Gartner analysts; their views and comments were incorporated. In addition, this document was presented and defended at the Gartner Application Services Research Community session.

Note 1
Industries

This Magic Quadrant addresses the capabilities of the included vendors in the following 22 industries:

  • Financial services: Banking
  • Financial services: Insurance
  • Financial services: Other financial services
  • Manufacturing: Oil and gas, chemicals, process and resource
  • Manufacturing: Automotive
  • Manufacturing: Aerospace and defense
  • Manufacturing: Industrial discrete
  • Manufacturing: High tech
  • Manufacturing: Consumer goods
  • Manufacturing: Other manufacturing
  • Manufacturing: Life sciences
  • Healthcare (Provider)
  • Public sector
  • Communications
  • Utilities and energy
  • Wholesale
  • Retail
  • Services
  • Travel and transportation
  • Agriculture, mining and construction
  • Education
  • Not for profit

Note 2
Countries per Region

This Magic Quadrant addresses worldwide capabilities of the included vendors in the following regions:

  • North America: United States and Canada
  • Latin America: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Mexico, Panama, Peru, Uruguay and Venezuela
  • Asia/Pacific and Japan: Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam
  • EMEA: Austria, Algeria, Azerbaijan, Bahrain, Belarus, Belgium, Bulgaria, Cameroon, Cote d'Ivoire, Croatia, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Jordan, Kazakhstan, Kenya, Kuwait, Lebanon, Libya, Lithuania, Luxembourg, Morocco, Netherlands, Nigeria, Norway, Oman, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Serbia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Syria, Tunisia, Turkey, Ukraine, United Arab Emirates, the United Kingdom and Yemen

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/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 vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

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

Completeness of Vision

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

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

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

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

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

Geographic Strategy: The vendor'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.