Initiatives for business intelligence (BI) and performance management (PM)-related projects require a diverse set of technology skills, best practices and frameworks, as well as knowledge of multiple functional areas. Successful initiatives consider all levels of the BI and PM framework (see "Gartner's Business Intelligence and Performance Management Framework"). This highlights the increased focus on analytic applications, people and processes as part of a BI strategy that effectively supports corporate goals and objectives.

Completing BI initiatives in a timely manner takes a significant investment in building the requisite expertise that most companies are unwilling or unable to make. As a consequence, the demand for services to close the BI skills gap that exists in many organizations is growing, and consulting and systems integration (CSI) companies are offering services to help fulfill this demand. The skills shortage is initiating significant efforts by CSI service providers to hire and train associates in technologies and products, as well as compete for experienced consultants to staff key positions. As CSI companies shape their BI and PM practices, it is a good time for user organizations to enter into strategic relationship where they can influence the portfolio of services a CSI company develops.

CSI companies invest in tools and templates for repeatable, scalable development and deployment processes. These service providers are moving to standardize certain service components. This industrialization has been facilitated by global capabilities that centralize delivery centers or centers of excellence and allow project execution from remote locations. The result is a multiplicity of options for buyers that affect the risk, speed and price for the completion of a BI initiative. This means that users must carefully evaluate the various options and review references, as some offerings might be new in the market and therefore relatively unproven.

The CSI services market for BI and PM is highly competitive and dynamic as service providers consolidate market share. CSI companies are increasing scale through innovative hiring strategies and career paths to grow their bases of practitioners. Merger and acquisition (M&A) activity is being used to create differentiation in offerings. In addition, technology providers are using M&A to gain entry or expertise into this market. End-user organizations should be aware that niche CSI companies are becoming acquisition targets. This industry consolidation can affect the relationship an organization has with a CSI provider. Contract terms and conditions will decide the ongoing relationship in this event.

Users are selecting CSI companies for BI initiatives based on a combination of capabilities to accelerate project delivery, drive business value, manage cost and mitigate implementation risk. Any one project can include the need for business consulting services, organizational assistance (change management), application and information infrastructure development, and implementation services. Gartner evaluates service providers on their ability to execute and completeness of vision. When both sets of criteria are evaluated together, the resulting analysis provides a view of how well the provider is able to perform a spectrum of services, relative to its peers, and how well it is positioned for the future. This evaluation is a snapshot in time. The competitive and dynamic nature of the BI service provider market is resulting in changes over time in the positioning of CSI companies. Your evaluation criteria for selecting service providers should reflect your own specific requirements.

BI and PM projects have significant impact across an enterprise as well as at higher levels of the enterprise. Organizations seek to achieve business value from the analysis of their information through the use of IT. The increasing investment by end-user organizations in this area is driving growth for the related CSI market. Gartner forecasts the market for these services to grow at a five-year compounded annual rate of 5.8% worldwide and reach more than $20 billion by 2010. This is at a similar rate of growth for the total CSI market, which includes business application services, application development, infrastructure services and so on.

Though demand is high, there is a dampening effect as a result of increasing cost competitiveness from offshore service providers, such as Cognizant, Infosys, Satyam, TCS, Wipro and others. Using global delivery and offshore resources to staff projects, price points have come down. In addition, overall standardization, both from product maturity and service maturity, contribute to greater management of engagement costs. In addition, fixed price/fixed time engagements are becoming more common as a way for end users to shift risk to CSI companies where capabilities have been institutionalized by these service providers. For projects that require new or innovative solutions, premium prices are still observed. And boutique CSI firms, such as Claraview and Myers-Holum, oftentimes provide solutions clients feel are unique.

BI and PM initiatives require multiple skills and assets across domains to be successful. CSI companies evaluated here balance a portfolio of capabilities to address issues across multiple layers of the BI and PM framework. Major categories of capabilities include:

• Business expertise (such as business performance and business process)
• Organizational expertise (for example, change management and training)
• Industry expertise (for example, specialty retail, transportation and utilities)
• Vendor/product expertise (for instance, Ab Initio, Hyperion and OutlookSoft)
• Technical subject expertise (for example, data modeling or data warehouse design)
• Implementation expertise (such as frameworks, tools and templates)
• Delivery expertise (for example, solution centers and global locations)
• CSI talent management (for example, knowledge management, hiring and training)
• Programmatic expertise (for example, project management and governance)
• Ability for innovation (for instance, creating competitive advantage for clients)

When you choose to work with a CSI company, Gartner has made recommendations for engaging with service providers in "Use of ESPs Can Bridge BI Skill and Resource Gaps."

The competitive nature of the BI service provider market, over time, affects the relative position of evaluated companies. Evaluation criteria for selecting service providers should reflect your company's desired business objectives and align with your enterprise and sourcing requirements.

There is a broad group of service providers that offer services to implement BI and PM solutions. Magic Quadrants do not always include all vendors (or an exhaustive list of vendors) in a given sector. Some of the inputs into the decision of the service providers that will be evaluated include the service provider's current and potential market impact and how often Gartner analysts interactions with clients result in some type of interest in specific providers. Gartner finds there are many pockets of different types of companies that focus only on parts of the overall BI and PM solution (for example, independent software vendors [ISVs] and boutique providers). The companies evaluated in this study strive to act as advisors and provide a depth of services that cuts across all levels of the BI and PM framework and organizes themselves to deliver across the expertise areas they choose in the BI and PM framework. This approach, as well as the inclusion criteria documented in a following section, also applied the capabilities of all types of potential vendors, including ISVs, to determine the potential inclusion of their consulting and systems integration offerings to end-user clients.

BI services include business consulting, IT consulting, development, integration and deployment offerings to implement and optimize an enterprise's BI processes and applications and to integrate related technology applications and platforms. Methods of purchase and service line definitions are available in "Dataquest Guide: IT Services Market Research Methodology and Definitions."

BI services span the Gartner BI and Performance Management Framework model that includes strategy, performance management, organization (people and process), applications (analytics and functionality), and information infrastructure, as described in "Management Update: The Cornerstones of Business Intelligence Excellence."

Inclusion of CSI companies in this Magic Quadrant resulted from meeting several criteria. In particular, we focused on companies offering services in North America (the United States and Canada). The criteria are designed to select CSI companies that can match the increasing complexity of BI projects that clients undertake. This Magic Quadrant does not evaluate the suppliers on their managed-service or outsourcing capabilities, only on project-based consulting and systems integration. Nonetheless, there is a broad group of service providers that offer services to implement BI and PM solutions. The market for BI consulting and integration services is a fragmented market when looking for just technology staffing services. Companies evaluated here have the capabilities not just for staffing, but also to manage BI programs.

The IT service providers that are evaluated are chosen based on their current and potential market impact, how often they appear on short lists and the degree to which they are evaluated by respondents to Gartner's primary research surveys and how often Gartner analysts interactions with clients result in some type of interest in specific providers. Service providers were assessed on the qualitative and quantitative criteria listed below for inclusion in the Magic Quadrant. Companies were selected based on services offered and delivered in North America, regardless of the location of their global headquarters and location of service delivery, as dictated by their own operational models.

• Presence — The service provider must have market presence (for example, special offerings or being competitive on requests for proposals), and there must be demonstrated interest by clients for the solutions and offerings, as determined by Gartner.
• Enterprise-level projects — Service providers should have shown that their solutions are used and supported across the enterprise and can go beyond departmental deployments.
• Framework — Service providers must deliver projects that include four of the capabilities from the BI framework domains (either singly or in combination). For more information on this subject, see “Gartner's Business Intelligence and Performance Management Framework.”
• Services — Service providers are expected to deliver consulting and integration services for discrete projects (the project includes requirements to deliverable), not just staffing services, application outsourcing services or business process outsourcing services. Service providers are expected to consistently invest in methodology and internal processes, as well as invest in resource development. Definitions are available in "Dataquest Guide: IT Services Market Research Methodology and Definitions."
• Revenue — Pure-play BI providers and full-service BI providers are evaluated if they meet the above inclusion criteria and the following revenue requirements:
  • Pure-play BI providers are companies that derive more than 90% of their revenue exclusively from BI consulting and integration services, and are expected to have $20 million in estimated annual revenue as estimated by Gartner. Qualifying service providers are Claraview, Knightsbridge/HP, Myers-Holum, and Palladium Group.
  • Full-service providers are companies with $40 million in annual BI professional service revenue, plus $160 million annually for all professional services in application-related work (for example, customer relationship management (CRM), enterprise resource planning (ERP) or supply chain management, singly or in combination) as estimated by Gartner. Qualifying service providers are Accenture, BearingPoint, Capgemini, Ciber, Cognizant Technology, Deloitte, Hitachi Consulting, IBM Global Business Services, Infosys Technologies, Satyam Computer Services, Tata Consultancy Services and Wipro Technologies.

Claraview, Fujitsu Consulting, Myers-Holum

Conversion Services International, Rapidigm and Navigator Systems (see Note 1 and Note 2).

The ability-to-execute dimension in our analysis evaluates the service provider's capacity and track record implementing the services described in its strategic plan and in clients' proposals and contracts. It considers the depth and breadth of services offered at each level of the Gartner BI/PM framework. This includes the service provider's demonstrated ability to satisfy client needs through a combination of tools, techniques, methodologies, alliance partners, and vertical and process expertise, and to deliver time-to-benefit advantage through learning reuse.

The completeness-of-vision dimension evaluates the service provider's strategic vision to deliver the CSI services needed by clients in the four domains of the BI/PM framework. This includes the service provider's depth of knowledge of BI markets, knowledge of the direction of key market trends, and knowledge of the customers it serves. The service provider's scope of vision and the "mind share" it has achieved with potential buyers are important. Factors analyzed include the service provider's commitment to its BI practices, funding and allocation of resources and skill building, and how it positions itself to address future industry scenarios through investments in R&D, methodologies, alliances and partnerships.

Leaders provide offerings that meet demand, as well as demonstrate the vision necessary to sustain their position as requirements evolve in the BI market. The hallmark of leaders is that they focus on and invest in their offerings to the point that they lead the market and can affect its overall direction. As a result, leaders can become the vendors to watch as you try to understand how new offerings might evolve. Leaders typically possess a satisfied customer base and enjoy high visibility within the market. Their size and financial strength enable them to remain viable in a challenging economy. Leaders typically respond to a wide market audience by supporting broad market requirements, including delivering across all levels of the BI framework. However, they may fail to meet the specific needs of more-specialized segments.

Challengers have a strong ability to execute but need to fully match service offering delivery with the total BI market direction. Although challengers typically have sufficient scale and financial resources, they may lack the breadth of vision, innovation or overall understanding of market needs across all levels of the BI framework. Challengers become leaders when their vision develops in concert with their ability to maintain a high level of execution.

Visionaries align with Gartner's view of how the BI market is evolving, but they have less-proven capabilities to deliver against that vision today. This may reflect a competitive strategy, such as selling an innovation ahead of mainstream demand, trying to break out of a rut, or early attempts at differentiating in the market. For service providers and customers, visionaries fall in the higher-risk/higher-reward category. They often introduce new methodologies, offerings or delivery strategies, and they may need to build financial strength, delivery capability across the BI framework, or sales and marketing strategies to complete the realization of their vision.

Niche players do well in a segment of the BI market, or they have limited ability to innovate or outperform other service providers. This may be because they focus on a domain, vertical market or geographic region, or they are new entrants to the market. Their ability to execute is limited to those focus areas and, therefore, assessed accordingly. Alternatively, they may be struggling to remain relevant in a market that is moving away from them. Niche players are often in the process of establishing a strong vision for their offerings across the BI framework and developing the scale to execute.

• Consistent development processes and methodologies across the BI and PM framework.
• BI practice rates high in program management of a client’s BI vision.
• Demonstrated ability to deal with complexity of constituencies and politics in a BI project.

• Clients indicate cost of engagements are high.
• Variable quality of engagement resources, especially technical and project management personnel.

• Demonstrated flexibility in accommodating client’s changing requirements.
• Consistency in staffing of experts for industry and technology domains.

• Clients indicate variability in project management capabilities of resources.
• Limited global delivery capability inhibits ability to tackle and execute larger engagements.

• Consultative working relationships that facilitate knowledge transfer at the client.
• Clients cite consultant skills with technologies and products as well as soft skills (change management, knowledge transfer) as standouts.

• Limited investment in solutions across the BI and PM framework.
• Limited ability to leverage field experience and create institutionalized practice.

• Focus on repeatability of standard service offerings.
• Clients cite consistent use of methodology for project management and delivery as key success factors.
• Capabilities in infrastructure and application layers of the framework.

• Clients indicate staff turnover on an engagement can be a challenge.
• Complexity in organization detracts focus from BI practice.

• References cite client-centric delivery as differentiator.
• Complex data warehousing implementations and unstructured data projects.

• Clients indicate high price point for a boutique BI services company.
• Limited resources may presents a challenge if turnover occurs on an engagement.

• Quality of delivery cited by references.
• The use of proprietary accelerators and tools in BI projects allow for consistent delivery.
• Clients indicate cost/value proposition through the leveraging of global delivery model is effective.

• High growth of the company challenges ability of BI practice to scale in resource quality.
• Limited business-level consultative skills.

• Differentiated strategy to recruit and retain BI talent.
• Business and strategic level focus.
• Experts across multiple disciplines in the firm contribute to a broad reach of service offerings across the framework.

• Clients indicate methodology discipline may limit consideration of alternative solution approaches.
• High price of engagement cited by references.

• Building on success of enterprise application capabilities.
• Technical capability and project management.

• Business skills of consultants (for example, business consulting and performance management).
• Knowledge transfer with clients.

• Superior client relationships reported by references.
• Offerings for Business Intelligence Competency Center (BICC) development that facilitate partnership with client teams.

• References cite varying levels of technical depth across the BI applications landscape.
• Clients indicate varying levels of process consulting capabilities.

• BI practice has breadth and depth across all levels of the framework.
• Company can provide broad and experienced capabilities to match client requirements and project needs.

• Solution development increasingly influenced by IBM technology.
• Internal organizational structure and scale may detract from working with clients efficiently.

• Thought leadership in specific areas (for example, performance management).
• Clients indicate global delivery capability is a differentiator.

• Federated BI practices limit the ability to fully leverage all areas of thought leadership.
• Clients indicate that rapid expansion has led to high demand for domain experts, resulting in scheduling difficulties.

• Specialist in large and complex data environments.
• Industry experience leads to accelerated solution development.
• Technical expertise.

• New vision as part of HP’s larger BI and PM strategy not clear (see Note 1).
• Integration of the company into a product-centric organization (see Note 1).
• High price.

• Specialized information architecture and large data warehouse provider.
• Independent advisor capable of handling projects for large clients.

• Limited brand and recognition of company inhibits organizational growth.
• Scale of company limits investment to standardize delivery.

• Performance management specialization.
• Corporate performance management thought leadership.

• Goals to achieve scale from acquisitions are not yet realized.
• Clients indicate that growth has resulted in inconsistent project management methodologies.

• Growing alliance strategy expands product expertise of BI practice.
• CSI bench of experts shared across outsourcing services for applications and information management infrastructure.

• Lack of effectiveness of translating BI and PM strategy into broad-scale market success.

• Effective use of global delivery (price and staffing).
• Technical resource consistency.

• Business-level engagement and advisory limited by sparse local presence.
• Technology-led vision.
• Relationship skills of consultants cited as cautions by references (for example, communication).

• Centers of excellence and the associated centralization of technical expertise.
• Clients cite improving consulting skills an asset (for example, industry, change management and project management).

• Conservative with respect to Framework solutions offerings.
• Clients cite variability of quality for on-site resources.

Note 1

Acquisitions

Hitachi Consulting acquired Navigator Systems in 2006. As a consequence, Navigator Systems was dropped from this evaluation.

Fujitsu Consulting acquired Rapidigm in 2006. As a consequence, Rapidigm was dropped from this evaluation and Fujitsu Consulting was added.

HP acquired Knightsbridge Solutions in December 2006. HP is integrating Knightsbridge Solutions into its BI practice. At the time of this evaluation, Knightsbridge operated independent of HP.

Note 2

Exclusion

Conversion Services International did not meet the minimum revenue criterion for inclusion.