Filing Information: December 2011, IDC #CA12CAS11, Volume: 1, Tab: Vendors
Canadian Cloud and Application Services: Competitive Analysis
C O M P E T I T I V E A N A L Y S I S
I D C M a r k e t S c a p e : C a n a d i a n S A P I m p l e m e n t a t i o n E c o s y s t e m 2 0 1 0 – 2 0 1 1 V e n d o r A n a l y s i s
Jim Westcott
I D C O P I N I O N
This IDC study represents a vendor assessment of the 2011 SAP-based systems
integration (SI) market through the IDC MarketScape model. This assessment
discusses both quantitative and qualitative characteristics that define success in the
SAP implementation market. This MarketScape covers a variety of vendors
participating in the SAP implementation market. The evaluation is based on a
comprehensive and rigorous framework that assesses each vendor relative to the
criteria and to one another. The framework highlights the factors expected to be the
most influential for success in the market in both the short term and the long term.
Key findings include:
The Canadian SAP implementation services market is highly competitive, and
the list of capable service providers is long. Buyers looking at implementing SAP
technology have a large field from which to choose a provider, increasing the
likelihood of finding an ideal partner and ensuring project success.
There are several IT service providers whose Canadian operations are above
average in terms of market share or customer penetration relative to other
geographies. These service provider firms are leaders in the Canadian
marketplace and help drive the brand image of the firms throughout the world.
Growth in new SAP license sales indicates that the implementation services
market is a strong growth market for IT services providers and will continue to be
a growth market for the foreseeable future. IT service providers are working with
SAP to develop a strong road map for emerging technology solutions and focus
areas (including mobility, analytics, in-memory computing, and cloud computing)
to sustain growth beyond the current forecast period.
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#CA12CAS11 ©2011 IDC
T A B L E O F C O N T E N T S
P
In This Study 1
Methodology ............................................................................................................................................. 2
Situat ion Overview 2
IDC MarketScape Vendor Inclusion Criteria ............................................................................................. 6
Market Size and Growth ........................................................................................................................... 6
Market Strategies .............................................................................................................................. 6
Future Out look 12
Market Analysis ........................................................................................................................................ 13
Vendor Summary Analysis ....................................................................................................................... 14
Accenture .......................................................................................................................................... 14
Description of Offerings.............................................................................................................. 14
Strengths .................................................................................................................................... 15
Key Findings and Opportunities ................................................................................................. 15
Capgemini ......................................................................................................................................... 15
Description of Offerings.............................................................................................................. 15
Strengths .................................................................................................................................... 16
Key Findings and Opportunities ................................................................................................. 16
CGI .................................................................................................................................................... 17
Description of Offerings.............................................................................................................. 17
Strengths .................................................................................................................................... 17
Key Findings and Opportunities ................................................................................................. 18
Deloitte .............................................................................................................................................. 18
Description of Offerings.............................................................................................................. 18
Strengths .................................................................................................................................... 18
Key Findings and Opportunities ................................................................................................. 19
HCL ................................................................................................................................................... 19
Description of Offerings.............................................................................................................. 19
Strengths .................................................................................................................................... 20
Key Findings and Opportunities ................................................................................................. 20
HP ..................................................................................................................................................... 20
Description of Offerings.............................................................................................................. 20
Strengths .................................................................................................................................... 21
Key Findings and Opportunities ................................................................................................. 21
IBM .................................................................................................................................................... 22
Description of Offerings.............................................................................................................. 22
Strengths .................................................................................................................................... 22
Key Findings and Opportunities ................................................................................................. 22
TCS ................................................................................................................................................... 23
Description of Offerings.............................................................................................................. 23
Strengths .................................................................................................................................... 23
Key Findings and Opportunities ................................................................................................. 23
Essent ial Guidance 24
©2011 IDC #CA12CAS11 1
I N T H I S S T U D Y
This study uses the IDC MarketScape vendor assessment model to evaluate the
Canadian SAP implementation services market. This research enables analysis of
quantitative and qualitative characteristics to provide metrics and context for end
users evaluating the use of SAP implementation services. It will also help in analyzing
a vendor's current comparative success in the marketplace and in anticipating a
vendor's evolution (and ascendancy). The main user focus areas for this market
include, among other factors, evaluation of depth and breadth of SAP implementation
service portfolios, flexibility and range of service delivery models, pricing options,
implementation methodology frameworks, sales and marketing strategies, go-to-
market strategies, and delivery model capabilities and overall competitiveness.
IDC's SAP implementation evaluation is based on a comprehensive framework and
set of parameters to assess vendors relative to one another and to those factors
expected to be most conducive to user demand and to market success for the short
term and the long term. The IDC MarketScape strategies axis represents a three- to
five-year period and future perspective, while the capabilities axis represents current
SAP implementation services offered and go-to-market execution. Despite the
regional focus of this study, IDC Canada has opted to keep the strategies and
capabilities weighting at 1:1. Often strategic direction is set at a corporate level which,
in most cases, lies outside of Canada. However, equal weighting of these two factors
was maintained due to the uniqueness of the Canadian IT services market and the
need for a balanced approach to serving existing customers and acquiring new
customers.
Market share of each vendor is indicated by the size of the circle representing the
vendor, and the vendor's year-over-year growth rate is indicated by a (+), (=), or (-)
icon next to the vendor name, representing growth in excess of, the same as, or at a
slower pace than the entire market.
This study is made up of four key sections. The first section provides definitions and
descriptions of the various IT services categories that are included in the vendor
analysis. The second provides definitions, descriptions, and weighting for the
characteristics IDC analysts believe enable a successful SAP implementation service
that is highly responsive and adaptable to user demand. These characteristics are
based on buyer and vendor surveys and analyst observations of the evolving market
and industry practices.
The third section is a visual aggregation of multiple vendors into bubble chart format
(refer to Figure 2), accompanied by written analysis. The diagram concisely display
and quantify scores of the eight reviewed vendors weighted across the SAP
implementation services market. This particular approach was chosen based on IDC's
assessment of evolving market demand and user input.
2 #CA12CAS11 ©2011 IDC
M e t h o d o l o g y
IDC MarketScape criteria selection, weightings, and vendor scores represent well-
researched IDC judgment about the market and selected vendors. IDC analysts tailor
the range of standard characteristics by which vendors are measured through
structured discussions, surveys, and interviews with market leaders, participants, and
end users. Market weightings are based on user interviews, buyer surveys, and the
input of a review board of IDC experts in each market. IDC analysts base individual
vendor scores, and ultimately vendor positions within the IDC MarketScape, on
detailed surveys and interviews with the vendors, publicly available information, and
end-user experiences in an effort to provide an accurate and consistent assessment
of each vendor's characteristics, behavior, and capability.
S I T U A T I O N O V E R V I E W
The SAP implementation market covers the design, build, and integrate functions of
the design-build-run function chain (see Figure 1). The design phase includes both IT
and business consulting. The analysis in this document excludes the "run" function
illustrated as it consists of outsourcing services activities.
F I G U R E 1
I D C ' s D e s i g n - B u i l d - R u n F u n c t i o n C h a i n
Source: IDC, 2011
©2011 IDC #CA12CAS11 3
IT consulting is defined as any professional services activity around information
technology. It is the delivery of advice to customers aimed at managing their IT
organization and at improving their IT performance, infrastructure, and related
processes. IT consulting includes two main areas:
IT strategy consulting assists an IT executive with designing an IT vision and
goals for the entire organization and then aligning resources accordingly. This
includes IT strategic planning (including human resources, facilities, and financial
planning), IT road map design, governance, systems, enterprise application, and
infrastructure strategy.
IT operations consulting assists an IT executive with optimizing the company's
IT infrastructure and architecture, and its use of specific technologies. This
includes infrastructure management; IT road map implementation; hardware,
software, and services procurement; vendor relationship management; IT
infrastructure performance; and performance engineering.
Business consulting involves advisory and implementation services related to
management issues. It involves defining an organization's strategy and goals and
designing and implementing the structures and processes that help the organization
reach its goals. Business consulting includes three main areas:
Strategy consulting assists an executive with defining a vision and goals for the
business, and acquiring and aligning resources to reach its objectives. This
includes competitive analysis, market analysis, advice-on-market entry and/or
exit strategy, product portfolio management, alliance strategy, strategic planning,
strategic road map development, and advice on corporate acquisition or
divestment choices.
Operational improvement consulting helps clients become more competitive
through process and operational changes by addressing the process and
business/industry or functional content dimensions of business transformation.
Operational improvement consulting can be viewed by core business processes
(e.g., manufacturing, marketing, sales, order fulfillment, and customer care) or by
support functions (e.g., finance processes, human resources, and
marketing/communications) excluding IT. Operational improvement consulting
services include process reengineering, sales force effectiveness, procurement
improvement, pricing strategy, cross-functional initiatives/program management
or support for all growth initiatives (including product launch, new business
implementation, and pre- and postmerger integration), and advice on risk,
security, and compliance. Operational improvement consulting also includes
process and business performance measurement through executive dashboard
and scorecard design and implementation. Examples of support functions
consulting include:
Finance and accounting (F&A) consulting serves the finance function in
client organizations. Consulting services to the finance function include
strategy and organization design for finance and accounting processes,
4 #CA12CAS11 ©2011 IDC
financial assessment, budgeting, finance management and controls
(including treasury, trading, and tax operations), transactional processes and
process and service delivery, and financial performance management and
measurement.
Governance, risk, and compliance (GRC) consulting reflects an
integrated approach to governance, risk, and compliance for organizations.
GRC is a comprehensive and holistic view of all three components
(governance, risk, and compliance) from both operational and strategic
perspectives; it is a process that promotes the operation, management, and
high performance levels of a business while ensuring the reduction of
uncertainty. Specific skills used in this service include integrating enterprise;
governance; and risk management, risk and vulnerability assessment,
business sustainability, regulatory compliance, compliance cost optimization,
change management and learning as related to risk in an organization,
performance measurement, and monitoring and incident management.
Internal audit consulting services assist organizations in assessing,
building, transforming, and sourcing their own internal audit departments.
The ultimate goal is to establish internal audit departments that are of
strategic and high value to organizations. Consulting activities include
benchmarking the internal audit function, measurement of internal audit
performance and value, quality assurance reviews including identification of
internal audit weaknesses based on stakeholder needs and organizational
risk management priorities, Sarbanes-Oxley services, the development of
internal audit career profiles and human resource models, and to determine
whether to outsource some or all of the internal audit function.
Change and organization consulting focuses on building the case for business
change and on the actions required to create the momentum to implement a
business change. Change and organization consulting also addresses the
human dimension of business transformation including organization design. This
includes helping executives align organizational elements with a new strategy
and mobilizing an organization to achieve improvement goals. Change initiatives
may include various facilitation and internal communication techniques, usually
tied to strategy and business improvement initiatives:
Change management is a structured approach to transitioning individuals,
teams, and organizations from a current state to a desired future state. It
includes both organizational change management processes and individual
change management models, which together are used to manage the
people side of change.
Organizational consulting focuses on the human dimension of business
transformation. This includes helping executives align organizational elements
with a new strategy. Organizational consulting contains several dimensions:
Human capital management. Advice related to compensation,
employee rewards and incentive programs, talent acquisition and talent
management, and development planning
©2011 IDC #CA12CAS11 5
Health and benefits. Designing or describing optimal employee health
plans with providers
Mergers and acquisitions. Assessing and proposing responses to
issues relating to cultural fit, job type, employee transition, and so forth
Communication. Strategies and tactics for disseminating corporate
information to the employee population and collecting insight into
employee attitudes, satisfaction, engagement, and other employee
behaviors, and interpreting that information
The build and integrate functions include systems integration, defined as a process
that includes the planning, design, implementation, and project management of a
technical solution that addresses a customer's specific technical or business needs
(SAP in this case). It involves IT site preparation, IT project management, test and
debug, system configuration, IT installation, software reengineering, custom software
development, packaged software customization, application interfacing and
integration, IT relocation services, systems migration, IT documentation, and user
experience design and analysis.
SI projects typically involve different platforms and technologies. The solution may
include hardware, software, and services. An SI project is formalized by a contract
that is constructed around solution specifications and often demands certain levels of
performance against technical or business goals. The end result of an SI project is
the delivery of a system that meets a stated objective and fulfills solution
specifications. It is difficult to place a minimum dollar limit, but SI projects in this
category usually exceed $100,000.
This study does not assess the run components of the SAP ecosystem. These are
services that involve a long-term, contractual arrangement in which a service provider
takes ownership of and responsibility for managing all or part of a client's IS
infrastructure and operations based on a service-level agreement (SLA). Services are
provided in a one-to-one model. These contracts would typically include the following
services provided in a discrete or bundled format, post-implementation:
Local area network (LAN) and wide area network (WAN) operations
management
Help desk support
Application management
Hosted application management
Disaster recovery services
Hosting services
Datacentre operations (either mainframe based or through a server farm)
6 #CA12CAS11 ©2011 IDC
I D C M a r k e t S c a p e V e n d o r I n c l u s i o n C r i t e r i a
For a vendor to be considered for inclusion in this study, the vendor's services must
have been significantly evaluated for purchase within a recent deal with which IDC is
familiar. Further research and due diligence were then conducted to narrow the list of
vendors to only those that had won deals and that IDC viewed as legitimate
contenders for future SAP implementation deals within the Canadian IT services
market. At the outset, 13 vendors were invited to participate in this study, the
following eight accepted:
Accenture
Capgemini
CGI
Deloitte
HCL
HP
IBM
Tata Consultancy Services (TCS)
The five vendors that declined to participate were Bell Canada, Fujitsu, Infosys,
TELUS, and Wipro.
M a r k e t S i z e a n d G r o w t h
From an implementation services standpoint, IDC Canada estimates that SAP-related
services accounted for approximately $1.2 billion in 2010, with a projected growth rate
of approximately 20% in 2011, producing an estimated 2011 spending total of $1.4
billion. From an ecosystem perspective, adding outsourcing and IT training and
education spending would add a further $1.2 billion to $1.5 billion (in 2010) bringing
the SAP-related IT services spending ecosystem into the $2.4 billion to $2.7 billion
range.
The following sections provide a detailed view of the criteria and subcriteria used by
IDC Canada to evaluate vendors active in the SAP implementation services market.
The analysis includes descriptions and quantitative values for both the strategies and
the capabilities vectors.
Market Strategies
There are several criteria that are most influential in predicting success in SAP
implementation services. There are service elements that providers must take into
consideration when crafting a future strategy and in leveraging existing capabilities to
best advantage. Factors for future strategy are found in Table 1, with factors for
leveraging existing capabilities in Table 2. The factors were weighted because IDC
believes that some are more important than others in maximizing market opportunity
and realizing market success in the Canadian marketplace.
©2011 IDC #CA12CAS11 7
T A B L E 1
K e y S t r a t e g y S u c c e s s M e a s u r e s : C a n a d i a n S A P I m p l e m e n t a t i o n S e r v i c e s M a r k e t
Strategy Criteria Criteria for Success
Subcriteria
Weights
Offering strategy Current development of offerings that will be relevant and attractive
to customers over the next three to five years.
Functionality or offering road map Excellence is marked by plans to offer a complete suite of SAP
solutions either through organic development, through partnership, or
through acquisition.
2.0
Delivery model Excellence is marked by plans to support emerging architectures,
such as SOA, and the ability to provide nontraditional service delivery
options, such as SaaS.
3.5
Cost management strategy Superior service calls for ways by which the vendor can help clients
justify expenditures, including ROI models, and by providing clear
paths by which the client can lower costs.
2.0
Portfolio strategy A true portfolio strategy ensures that the client makes most effective
use of the technology for business transformation and focuses on
services offered in support of SI services including emerging services
areas such as SI services around cloud computing.
2.5
Offering strategy total 10.0
Go-to-market strategy These are strategies that will maximize the connection between the
offering and the customers, including choosing to target customer
segments that offer the greatest opportunity over the next three to
five years.
Pricing model Superior planning for future pricing alignment with market direction,
and pricing plans that will encourage adoption of full SAP suite.
2.0
Sales/distribution strategy Excellence is demonstrated by plans to serve new markets such as
SMB for enterprise suppliers, or enterprise for SMB suppliers, or
specific industries. Also, the strategy to use partners including SAP
to reach these new market segments is also taken under
consideration.
3.0
Marketing strategy This involves clear, differentiation strategy and messaging of
vendor's SAP practice.
2.0
Customer service strategy Whatever the current client retention rate, superior firms have a well-
articulated plan for lowering client churn.
3.0
Go-to-market strategy total 10.0
Business strategy To be successful, vendors need to have strategies to grow the
business that are aligned with market trends and future opportunities
over the next three to five years.
8 #CA12CAS11 ©2011 IDC
T A B L E 1
K e y S t r a t e g y S u c c e s s M e a s u r e s : C a n a d i a n S A P I m p l e m e n t a t i o n S e r v i c e s M a r k e t
Strategy Criteria Criteria for Success
Subcriteria
Weights
Growth strategy Vendor has strategic plans for both organic and inorganic growth,
and the plans align well with the overall IT trends in the next three to
five years' plans.
4.0
Innovation/R&D pace and
productivity
Strategic innovation/R&D plans for attaining or retaining functional
superiority over competition.
1.5
Financial/funding model Viability of funding strategy for next three to five years. Focus is also
on plans for growing revenue per employee.
2.0
Employee strategy Clearly articulated plans for retaining top performing employees. 2.5
Business strategy total 10.0
Source: IDC, 2011
©2011 IDC #CA12CAS11 9
T A B L E 2
K e y C a p a b i l i t i e s S u c c e s s M e a s u r e s : C a n a d i a n S A P I m p l e m e n t a t i o n
S e r v i c e s M a r k e t
Capabilities Criteria Criteria for Success
Subcriteria
Weights
Offering capabilities The offering's capabilities align well with current market needs and
demands.
Functionality/offering delivered The ideal solution offers solutions along the full life cycle of a SAP-
based application integration process without partnership (i.e.,
capable of providing the design, build, implement, sustain, upgrade).
The vendor should be able to market these offerings as a standalone
offering.
1.5
Delivery model appropriateness
and execution
The buyer is given flexibility in delivery to meet its culture and needs
with options including onshore, nearshore, offshore, and
geographical reach. Focus is also on the size of the offshore
practice.
3.0
Cost competitiveness Pricing must reflect volume discounts and must be competitive with
the market. Focus is on blended SAP integration rates.
2.0
Portfolio benefits delivered The offerings are well supported and enhanced by a portfolio of
complementary offerings such as business consulting, application
management, and support services. That is, the vendor has the
capability to provide end-to-end services solutions and not just
integration services.
3.5
Offering capabilities total 10.0
Go-to-market capabilities These are capabilities that will maximize the connection between
offerings and customers, such as delivery, partnerships, pricing,
distribution, marketing, sales, and service.
Pricing model Flexible pricing arrangements that allow clients to navigate through
the costs of undertaking implementation projects.
3.0
Sales/distribution How well the vendor is able to reach customers using a combination
of both direct selling and an efficient partnership ecosystem. The
right partners/partnership ecosystem will include subcontracting or
collaboration with other SIs, strategic relationships with ISVs that
have strong expertise in certain domain or industry-specific areas
and, of course, strong relationships with SAP. Focus is also on the
size of the SAP-dedicated sales force.
2.5
Marketing Focus is on the size and importance of the SAP-dedicated marketing
spend within the enterprise. Looking at a marketing campaign that is
geared toward a well-defined audience. The message is concise and
appropriate for each of the target markets.
1.5
Customer service Focus is on the size of the SAP implementation client base as well as
how well the vendor is able to keep the current clients engaged.
3.0
Go-to-market strategy total 10.0
10 #CA12CAS11 ©2011 IDC
T A B L E 2
K e y C a p a b i l i t i e s S u c c e s s M e a s u r e s : C a n a d i a n S A P I m p l e m e n t a t i o n
S e r v i c e s M a r k e t
Capabilities Criteria Criteria for Success
Subcriteria
Weights
Business capabilities Financial, employee, partner, and R&D management, among other
capabilities, are in agreement with current market opportunities.
Growth strategy Market momentum and growth is shown through acquisition of new
capabilities as well as organic growth. This will be measured by the
percentage of organic growth achieved compared with that of the
industry average.
3.5
Innovation/R&D pace and
productivity
Sufficient new development is taking place to stay ahead of or in line
with competition.
1.5
Financial/funding model Excellence is marked by strong cash flow and financial acumen and
restraint. Focus is also on how good a vendor is at generating
revenue per employee.
2.5
Employee strategy Strength in managing employees is demonstrated by the number of
the SAP workforce, the number of certified professionals, and a high
employee retention rate of the SI workforce.
2.5
Business capabilities total 10.0
Source: IDC, 2011
In addition to the criteria for success having varying weights, IDC believes the
aggregate criteria (offering, go to market, and business strategy) should also be
weighted. Table 3 shows the relative weights used in this analysis for SAP
implementation services. The "business strategy" component was giving the highest
weighting for the Canadian SAP implementation market given the need to execute in
a market that has unique challenges (e.g., expansive geographic scope with relatively
few large urban centres, dominance of SMB sector, and existing use of external
providers in the large business segment). The "offerings" component (functionality
and IP investment) was weighted most heavily for both current capabilities in the SAP
implementation services view. This was followed by go-to-market and business
capabilities and strategy in the second and third places. Overall, IDC Canada
believes that current capabilities rather than future vendor strategies are most
relevant to enterprise buyers of SAP implementation services.
©2011 IDC #CA12CAS11 11
T A B L E 3
A g g r e g a t e C r i t e r i a W e i g h t i n g f o r t h e C a n a d i a n S A P I m p l e m e n t a t i o n
S e r v i c e s M a r k e t
Strategy Criteria Weighting Capabilities Criteria Weighting
Offerings strategy 3.0 Offerings capabilities 5.0
Go-to-market strategy 3.0 Go-to-market capabilities 3.0
Business strategy 4.0 Business capabilities 2.0
Subtotal 10.0 Subtotal 10.0
Source: IDC, 2011
Consequently, based on these weightings, there are several criteria that are most
influential in predicting success (for definitions of these areas, refer back to Tables 1
and 2):
Offerings. SAP implementation offerings are the most vital aspect of success for
vendors participating in the Canadian SAP implementation market. Services
providers should be able to provide a full range of SAP-based services and
solutions by leveraging all available SAP capabilities and resources. Services
providers should possess implementation capabilities around key functional
areas such as financial management, customer relationship management, supply
chain management, HR, business analytics, and any new initiative on the SAP
horizon including mobility and cloud computing. Key metrics include the number
and the types of offerings, the offering road map, and the portfolio strategy.
Complementary offerings such as outsourcing and operation-related services,
training, and support services also improve a provider's position in the ecosystem
(although not measured in this analysis).
Growth strategy. Organic and inorganic growth is important in the Canadian
market (as it is globally) due to the relative size of the market and the
concentration in revenue at the top of the market. Nontraditional providers,
including the offshore providers, are growing significantly faster than the overall
market average and sustaining these growth rates will be challenging, but it also
demonstrates the pressure that incumbent providers are facing. Overall, the SAP
implementation services market is vibrant and healthy and providers' not keeping
pace with the growth will have to reevaluate their strategies and execution in the
Canadian marketplace.
12 #CA12CAS11 ©2011 IDC
Delivery model and cost competitiveness. For the most part, Canadian
companies are comfortable using the offshore services delivery model although
application of the model will vary by business. There are some businesses, even
large Canadian businesses that are engaged in first-generation offshore resource
usage (for both project-based and outsourcing-based services), which typically
serves to restrict the use of offshore resources in favour of onsite resources. The
analysis is clear that global sourcing is a key component in providing SAP
implementation services to Canadian customers and having an appropriate mix
on onsite and offshore resources will be of critical importance as well as having
an offshore bench that can assign an even higher percentage of resources to
Canadian customer projects.
F U T U R E O U T L O O K
The IDC vendor assessment for the Canadian SAP-based systems implementation
market represents IDC's opinion on which vendors are well positioned today through
current capabilities and which are best positioned to gain market share over the next
few years. For the purposes of discussion, IDC divides potential key strategy
measures for success into two primary categories: capabilities and strategy.
Positioning in the upper right of the grid indicates that vendors have a strong
combination of capabilities to ensure success in today's ecosystem and have the right
set of strategic initiatives to maintain and grow their future position in the market.
Positioning on the y-axis reflects the vendor's current capabilities and menu of
services and how well it is aligned to customer needs. The capabilities category
focuses on the capabilities of the company and its services today. In this category,
IDC analysts look at how well a vendor is building, pricing, positioning, and/or
delivering capabilities that enable it to execute its chosen strategy in the market. On
the y-axis, a position toward the top (north of centre) indicates a strong set of
differentiated capabilities to be successful in today's market.
Positioning on the x-axis or strategy axis indicates how well the vendor's future
strategy aligns with what customers will require in three to five years. The strategy
category focuses on high-level strategic decisions and underlying assumptions about
road maps for offerings, customer segmentation, business, and go-to-market plans
for the future, which in this case is defined as the next three to five years. In this
category, analysts look at whether or not a supplier's strategies in various areas are
aligned with customer requirements in terms of spending, procurement, and delivery
over a defined future time period. On the x-axis, a position toward the right (east of
centre) indicates a strategy that not only is well aligned with customer requirements
but is agile and differentiated from the pack.
Figure 2 shows each vendor's position in the vendor assessment chart. Vendor
market share is represented by the size of the circles. Vendor year-over-year growth
rate relative to the given market is indicated by a plus, neutral, or minus icon next to
the vendor name. Spatial position is also represented on the x- and y-axes.
©2011 IDC #CA12CAS11 13
F I G U R E 2
I D C M a r k e t S c a p e S A P I m p l e m e n t a t i o n S e r v i c e s V e n d o r A s s e s s m e n t
Source: IDC, 2011
M a r k e t A n a l y s i s
As a whole, the vendors covered in this analysis are established players, all with
strengths in service, innovation, and delivery. This analysis indicates an intense
competition among the players as vendor ratings were very close for the majority of
the vendors in most subcriteria. The need to differentiate will become even more
important in the next three to five years.
The analysis also reveals certain areas of high performance and somewhat weaker
categories for players as a group within the SAP implementation ecosystem.
14 #CA12CAS11 ©2011 IDC
Relationship with SAP. The vendors profiled in this document have strong
relationships with SAP at the corporate level, and these relationships have been
reinforced at the Canada level. Vendors that have a weaker relationship with
SAP will be at a disadvantage relative to competitors.
Vertical market capabilities. All of the profiled vendors are aligned
organizationally by vertical market or have cultivated strong capabilities for
selected verticals.
Tactical market approach. Relatively few vendors are cultivating reputations as
thought leaders in Canada. In this market, emphasizing real-world experience
and tactical competency is a better strategy, and it is best to leverage thought
leadership from corporate or headquarter sources.
Global resource leverage. Global resourcing has become table stakes for
vendors operating in Canada, allowing for the reuse of methodologies, IP, and
qualified resources. Most buyers are now comfortable augmenting onsite and on-
shore resources with offshore resources, including employees brought onsite
from offshore locations.
Managed innovation. SAP has laid out its investment road map for emerging
solutions areas including mobility, in-memory computing, and cloud computing.
Implementation partners are keenly aware of these emerging opportunities and
many are already working with SAP in codeveloping solutions. In Canada,
vendors have to balance these emerging markets with existing solutions
offerings, the bulk of the opportunity in this country.
V e n d o r S u m m a r y A n a l y s i s
Accenture
Descr ipt ion of Offer ings
P r e s e n c e i n C a n a d a
Accenture has been one of the leading IT services providers' active in Canada.
Accenture's Canadian workforce exceeds 4,500, and it has offices and delivery
centres in major metropolitan centres across the country. Accenture is a Leader in
this IDC MarketScape document.
O r g a n i z a t i o n
While a significant proportion of Accenture's Canadian revenue has come from
outsourcing over the past few years, the SAP implementation practice accounts for
more than 10% of revenue in Canada and numbers in excess of 500 local resources.
Even in comparison with the other vendors profiled in this document, Accenture has a
very strong relationship with SAP, and it has reinforced this relationship with the
creation of an Accenture Innovation Center for SAP in Toronto, one of a group of
centres distributed globally. Accenture's Global Delivery Network has in excess to
16,000 SAP resources.
©2011 IDC #CA12CAS11 15
T a r g e t s f o r S A P S e r v i c e s
Accenture's SAP resources are largely held in Toronto and Montreal, but it worked on
two dozen projects across Canada in 2010/2011 across a wide range of industries
including retail, financial services, utilities, and high tech. Accenture can provide SAP
services across the entire application life cycle from consulting to implementation and
application outsourcing. The creation of the Accenture Innovation centre for SAP in
Toronto will allow Accenture an opportunity to provide Canadian customers with a
local option for assessing SAP capabilities and project options.
Strengths
A r e a s W h e r e t h e C o m p a n y E x c e l s o r I s A b l e t o D i f f e r e n t i a t e I t s e l f
Accenture, in addition to its service delivery capabilities, has cultivated strong C-level
relationships with companies across Canada. Accenture both globally and in Canada
has positioned itself as a thought leader in the IT services market, and this positioning
has raised the company's profile and gives it an advantage in terms of getting
recognition for its delivery capabilities, codevelopment initiatives, and its platform
solution for SAP implementation.
R e a s o n s f o r I t s S u c c e s s
Accenture was a pioneer in organizing its services practices by vertical market, and
this continues to be one of its strengths in the SAP implementation services market.
Accenture can provide vertical expertise and industry templates and solutions for SAP
products including horizontal product offerings (i.e., HCM).
Key F indings and Opportunit ies
R e a s o n s f o r i t s P o s i t i o n i n g o n t h e C h a r t
Accenture's positioning in the Canadian SAP implementation services market
straddles Major Player and Leader, making it a Leader in the market. Accenture is
well positioned from a customer and revenue perspective, but its growth rate has
some room to match some of its smaller rivals.
W a y s i n W h i c h t h e F i r m C a n I m p r o v e I t s P o s i t i o n i n t h e M a r k e t p l a c e
Accenture is one of the largest and best-regarded IT and business services provider
operating in Canada. The company has a strong relationship with SAP, and it
continues to demonstrate its commitment to the platform with new investments. In the
Canadian marketplace, Accenture has to balance its thought leadership initiatives and
its outsourcing/annuity revenue business with its consulting/systems integration
business.
Capgemini
Descr ipt ion of Offer ings
P r e s e n c e i n C a n a d a
Capgemini Canada is a top 10 IT and business service provider in Canada, operating
as part of the North America business unit. Using the North America operating model,
16 #CA12CAS11 ©2011 IDC
Capgemini has just short of 9,000 total resources of which close to 1,500 working in
Canada. Capgemini is a Major Player in this IDC MarketScape document.
O r g a n i z a t i o n
Capgemini has concentrated its SAP resource base (totaling 200) in central Canada,
specifically Toronto and Montreal. Capgemini can augment these in-country
resources with more than 4,000 SAP resources distributed in 22 global delivery
centres.
T a r g e t s f o r S A P S e r v i c e s
In Canada, Capgemini generates a disproportionately high percentage of its revenue
from outsourcing (in comparison with other geographies). From a target perspective,
Capgemini focuses its resources (including its SAP implementation resources) on the
utilities sector, manufacturing businesses, and retail entities. Capgemini is also
leveraging SAP's All-in-One certification program to scale SAP solutions for small and
medium-sized businesses.
Strengths
A r e a s W h e r e t h e C o m p a n y E x c e l s o r I s A b l e t o D i f f e r e n t i a t e I t s e l f
Capgemini has aggressively built solutions for the SAP platform including OnePath
(SaaS-based solutions for HCM, SCM, and procurement). Capgemini offers HCM
EDGE a proprietary solution that delivers templates and tools for SAP HCM solution.
Capgemini also offers its CRESCENT solution for consumer products and wholesale/
distribution companies. These are certified SAP All-in-One offerings. Drawing on its
success in the energy sector, Capgemini offers EnergyPath, also an SAP All-in-One
solution for energy services companies.
R e a s o n s f o r I t s S u c c e s s
Capgemini has, over the course of the past few years, shifted to an annuity revenue-
generation model, the result of winning large outsourcing contracts. This shift has
concentrated Capgemini's resources and expertise in a handful of industries, and this
has contributed to its success in the SAP implementation services market.
Key F indings and Opportunit ies
R e a s o n s f o r I t s P o s i t i o n i n g o n t h e C h a r t
Capgemini is positioned as a Major Player in the Canadian SAP implementation
services market. Despite the significant shift toward outsourcing taken by Capgemini
in Canada, the firm still has strong assets in the implementation services market and
a strong global relationship with SAP that continues to fuel opportunities in the local
Canadian market.
W a y s i n W h i c h t h e F i r m C a n I m p r o v e I t s P o s i t i o n i n t h e M a r k e t p l a c e
Capgemini has to continue to expand its presence beyond central Canada into high
growth regions and areas of the country that complement its existing strategy and
industry focus. The recent (outsourcing) contract win in British Columbia provides a
foundation from which the firm can grow in western Canada.
©2011 IDC #CA12CAS11 17
CGI
Descr ipt ion of Offer ings
P r e s e n c e i n C a n a d a
CGI is a Canadian success story having started in Quebec in the 1970s to become a
$4+ billion global IT and business services provider. IDC Canada has, in the past,
analysed CGI's distributed business model, but it has resulted in CGI having a strong
presence throughout Canada and it gives local business units the expertise to win
new business and maintain existing business with customers based on regional
requirements and industry expertise. CGI is a Major Player in this IDC MarketScape
document.
O r g a n i z a t i o n
CGI generates approximately 50% of its revenue from Canada and globally, about
one-third of revenue comes from consulting, systems integration, and application
development. As a percentage of revenue, SAP does not account for an
overwhelming majority as CGI has strong capabilities in packaged enterprise
applications and custom developed applications.
T a r g e t s f o r S A P S e r v i c e s
From a top-line Canadian perspective, CGI is well diversified across the entire
country. In terms of its SAP implementation capabilities, CGI has strong roots in the
eastern half of Canada, extending from Atlantic Canada to Ontario. Western Canada
is considered a growth market opportunity. CGI has a diverse customer base as well,
with SAP projects completed or under way in many vertical markets including
telecom, utilities, healthcare, public sector, retail, and manufacturing.
Strengths
A r e a s W h e r e t h e C o m p a n y E x c e l s o r I s A b l e t o D i f f e r e n t i a t e I t s e l f
In comparison with the other vendors profiled in this document, CGI has two
interesting points of differentiation. First, CGI prefers to use its own project
management framework (as opposed to a customer or a SAP-based methodology).
This allows the company to improve the monitoring of projects as well as lower
project risk by owning and overseeing all aspects of the project. Second, CGI does
not focus its IP on codeveloping SAP solutions. Rather, it focuses its innovation of
improving the productivity and interoperability of SAP solutions.
R e a s o n s f o r I t s S u c c e s s
CGI's business model allows local business units to get very close to its customers
and to develop strong vertical market skills based on the composition of that market.
To this foundation, CGI has, through M&A activities, extended its reach across North
America, Europe, and Asia, giving it onshore, nearshore, and offshore delivery
capabilities.
18 #CA12CAS11 ©2011 IDC
Key F indings and Opportunit ies
R e a s o n s f o r I t s P o s i t i o n i n g o n t h e C h a r t
CGI's positioning as a Major Player in the SAP implementation services market
underscores its presence in Canada as a first tier IT and business services provider.
CGI is well positioned from a revenue perspective, but it has to remain diligent not to
lose market share to new entrants.
W a y s i n W h i c h t h e F i r m C a n I m p r o v e I t s P o s i t i o n i n t h e M a r k e t p l a c e
In the Canadian marketplace, CGI is encouraged to raise its profile in SAP
implementation market, both with SAP as a partner and within the end-user
community. Unlike all of the other providers evaluated in this document, CGI does not
seek awards for its SAP work yet this could be a lost opportunity and something that
could hinder CGI's ability to market itself to new and potential customers.
Deloitte
Descr ipt ion of Offer ings
P r e s e n c e i n C a n a d a
Deloitte is one of the world's largest partner-owned IT and business consultancies,
and it has a well established operating history in Canada. In addition to its consulting
practice (which includes technology, human capital, strategy and operations, and
services quality), Deloitte Canada provides Tax, Financial Advisory Services, and
Enterprise Risk Services as part of its portfolio. Deloitte is a Leader in this IDC
MarketScape document.
O r g a n i z a t i o n
Deloitte's technology practice has experienced strong growth over the past few years,
and IDC Canada estimates that services related to SAP accounts for approximately
20% of revenue for the group.
T a r g e t s f o r S A P S e r v i c e s
Deloitte has a wide range of customers across all industries; however, it generates a
higher proportion of its Canadian revenue from tactical industries (i.e., financial
services, energy, and manufacturing) and strategic industries (i.e., public sector,
healthcare, and utilities). As a reseller of SAP's Business All In One solution, Deloitte
also targets small and medium enterprises. Globally, Deloitte derives a significant
proportion of its revenue from the SME sector through its SAP partnership.
Strengths
A r e a s W h e r e t h e C o m p a n y E x c e l s o r I s A b l e t o D i f f e r e n t i a t e I t s e l f
In the Canadian marketplace, one of the ways in which Deloitte has demonstrated its
capabilities is through the development of two SAP COEs, one in Victoria, British
Columbia, the result of a project with the British Columbia Government focused on
revenue management and the other in Winnipeg, Manitoba, with expertise in loan
management and CRM.
©2011 IDC #CA12CAS11 19
R e a s o n s f o r I t s S u c c e s s
Deloitte has resources to match many of the other top players with respect to global
delivery: the ability to draw from a pool of more than 10,000 SAP resources around
the globe. Deloitte has also cultivated a strong relationship with SAP, codeveloping
ASAP as an example, as well as using its methodologies (Enterprise Value Delivery)
and IndustryPrint to streamline project delivery and utilize best practices developed
from other SAP engagements.
Key F indings and Opportunit ies
R e a s o n s f o r I t s P o s i t i o n i n g o n t h e C h a r t
Deloitte occupies a position in the Leaders area, placing the firm at the top end of the
market in terms of IDC Canada's evaluation. Coupled with its audit, tax, and advisory
businesses, Deloitte matches up well with all of the other major vendors and their
Canadian and international capabilities.
W a y s i n W h i c h t h e F i r m C a n I m p r o v e I t s P o s i t i o n i n t h e M a r k e t p l a c e
Deloitte is very effective at demonstrating its thought leadership abilities in the
Canadian market, and this has positively reflected on the Deloitte brand. The firm is
also encouraged to raise its public profile by announcing contract wins to the market,
even in generic terms, in order to promote its practical capabilities in SAP
implementation services.
HCL
Descr ipt ion of Offer ings
P r e s e n c e i n C a n a d a
HCL is relatively new to Canada, having a local market presence (Toronto,
Vancouver, Montreal) since 2008. HCL accelerated its stake in the SAP
implementation services market in Canada (and North America) with the acquisition
of AXON in 2008. HCL is a Major Player in this IDC MarketScape document.
O r g a n i z a t i o n
In Canada, HCL generates the majority of its revenue from Enterprise Application
Services, the division of HCL that largely accounts for AXON's revenue. The vast
majority of HCL's revenue in Canada comes from application services and SAP
generates the lion share.
T a r g e t s f o r S A P S e r v i c e s
In a very short period of time, HCL has been able to acquire several high-profile
customers in the utilities (Hydro One, Fortis), transportation (Canadian National
Railway, Canadian Pacific Railway), and oil and gas (ConocoPhillips, Suncor)
sectors. HCL has established a development centre for the transportation industry
(based on its contracts with CPR and CNR) as well as its iCREW (SAP-certified
solution for HCM in regulated transportation industries) and its iLINE asset
management solution.
20 #CA12CAS11 ©2011 IDC
Strengths
A r e a s W h e r e t h e C o m p a n y E x c e l s o r I s A b l e t o D i f f e r e n t i a t e I t s e l f
HCL has defined itself as a fast follower in the Canadian market, using its asset base
tested in other geographies to establish itself in Canada in a relatively short period of
time. There is a strong vertical market orientation to HCL's strategy, and it will
continue to build on this foundation.
R e a s o n s f o r I t s S u c c e s s
Similar to other IT service providers, HCL has a vertical market structure and
alignment, and this has clearly lead to its success in Canada as it has used its global
experience to win Canadian business in a relatively short period of time. HCL has
also focused on larger deals (a highly competitive market that is difficult to unseat
incumbents), and it has cultivated relationships with sourcing advisors in addition to
its internal pursuit resources to increase its profile in large accounts.
Key Findings and Opportunit ies
R e a s o n s f o r I t s P o s i t i o n i n g o n t h e C h a r t
If this document had been authored in 2010 or early, HCL would have likely appeared
as a Contender. As it stands today, IDC considers HCL a Major Player as it has
managed to capture a significant amount of revenue and a number of marquee
customers in a relatively short amount of time. HCL has done a good job of exploiting
its capabilities to reach Canadian customers in specific vertical markets, and it has
built a foundation upon which it can generate future success.
W a y s i n W h i c h t h e F i r m C a n I m p r o v e I t s P o s i t i o n i n t h e M a r k e t p l a c e
HCL is something of an unknown quantity in the Canadian IT services market, and
the company has a relatively low level of awareness with Canadian end-user
businesses. HCL has the opportunity to increase its profile and awareness in the
market of Canadian customers and move itself higher up the market share ladder.
HP
Descr ipt ion of Offer ings
P r e s e n c e i n C a n a d a
HP is one of the largest and most diversified IT services provider in Canada with well
over $1 billion in revenue. HP's Canadian IT and business services revenue is
generated across the country, strengthened by the EDS acquisition and its strong
presence in British Columbia. HP is a Leader in this IDC MarketScape document.
O r g a n i z a t i o n
The largest share of HP's services revenue is generated through IT outsourcing.
Implementation services, confined to systems integration, comprise less than 10% of
the HP's revenue (IDC Canada estimate). Within these confines, SAP is a focus area
for HP and it does account for a sizeable share of SI spending in Canada. HP has
four SAP capability centres in Canada: two in the east (Ontario and Quebec) and two
in the west (Manitoba and Alberta).
©2011 IDC #CA12CAS11 21
T a r g e t s f o r S A P S e r v i c e s
HP has customer relationships in the major Canadian vertical market segments with a
strong heritage in the public sector, manufacturing, retail, and oil and gas. In addition
to its already strong presence in Ontario and British Columbia, HP is targeting
Quebec and Alberta for future growth. HP is also targeting the SMB sector as a
complement to its capabilities in the large business segment, a reflection of the
composition of the Canadian business landscape and its stated objective to grow IT
services revenue.
Strengths
A r e a s W h e r e t h e C o m p a n y E x c e l s o r I s A b l e t o D i f f e r e n t i a t e I t s e l f
HP has a pragmatic approach to SAP implementation services: Canadian customers
benefit from consistent methodologies, resources, and pricing based on standardized
policies as well as leveraging multiple COEs located throughout the world (5 of the 12
SAP COE's are located in the western hemisphere).
R e a s o n s f o r I t s S u c c e s s
Application services had a strong heritage in EDS prior to the acquisition and,
postacquisition, HP has continued to emphasize this business as part of its IT
services growth strategy. HP can leverage its existing success with SAP
implementation around the world to continue building the Canadian practice.
Key F indings and Opportunit ies
R e a s o n s f o r I t s P o s i t i o n i n g o n t h e C h a r t
HP's position on the IDC MarketScape chart mirrors that of the other top-rated
vendors: the border between Major Player and Leader. HP has competitive
capabilities across the entire IT services life cycle and a healthy SAP services
business, particularly with the inclusion of EDS' legacy services operations.
W a y s i n W h i c h t h e F i r m C a n I m p r o v e I t s P o s i t i o n i n t h e M a r k e t p l a c e
HP has a very strong Canadian presence yet its focus on North America as the
operating unit takes some of the focus away from its capabilities in the domestic
Canadian market and veils its presence to some degree. HP can improve its
positioning in the SAP implementation services market by raising its capabilities (and
giving it the same level of investment as it has for Java and .Net) as well as adding a
Canadian SAP COE to its existing global delivery system.
IBM
Descr ipt ion of Offer ings
P r e s e n c e i n C a n a d a
IBM is the largest IT provider in Canada with over 20,000 in-country employees and
annual revenue in excess of $5 billion. IT services revenue is estimated to exceed $4
billion annually. IBM is a Leader in this IDC MarketScape document.
22 #CA12CAS11 ©2011 IDC
O r g a n i z a t i o n
IBM's Canadian SAP capabilities are integrated in IBM's Americas business unit,
which accounts for approximately 25% of IBM's global SAP workforce. IBM also
operates an SAP Innovation and Delivery centre in Toronto.
T a r g e t s f o r S A P S e r v i c e s
IBM's strong presence across Canada has given the company a wide customer base
that includes all of the major sectors. IBM continues to target the midmarket or SMB
sector in Canada as a growth market.
Strengths
A r e a s W h e r e t h e C o m p a n y E x c e l s o r I s A b l e t o D i f f e r e n t i a t e I t s e l f
IBM has several areas in which it is able to differentiate itself from its competitors. Its
primary advantage stems from its scale in Canada, as well as the scope of its
offerings, in particular its outsourcing capabilities. IBM can also leverage its
partnership with SAP globally, described as SAP's largest partnership.
R e a s o n s f o r I t s S u c c e s s
IBM's success stems from the strength and depth of its SAP bench as well as the
reach of its sales force. IBM can also bring a strong vertical market focus, industry
templates for SAP projects, a host of software assets for automating and managing
SAP applications, and a robust methodology for managing SAP projects.
Key F indings and Opportunit ies
R e a s o n s f o r I t s P o s i t i o n i n g o n t h e C h a r t
IBM is positioned as a Leader in the Canadian SAP implementation market because
of its overall size of the practice and the breadth and depth of its capabilities.
W a y s i n W h i c h t h e F i r m C a n I m p r o v e I t s P o s i t i o n i n t h e M a r k e t p l a c e
As previously mentioned, IBM can benefit from establishing a stronger foothold in the
SMB sector or at least the high end of the medium-sized business market. This is a
growth area for some of its competitors and a source revenue that currently goes to
small and niche providers.
TCS
Descr ipt ion of Offer ings
P r e s e n c e i n C a n a d a
TCS was among the first wave of India-based providers to open an office in Canada,
and now it is the leading offshore provider in Canada in terms of revenue. Throughout
its evolution in Canada, TCS has grown its core business activities centered on
application services and expanded into complementary markets in IT infrastructure
services and BPO. TCS is a Leader in this IDC MarketScape document.
©2011 IDC #CA12CAS11 23
O r g a n i z a t i o n
In 2010, TCS restructured its organization and consolidated and its application
services business in an Enterprise Solutions group. This allows TCS to share
knowledge, expertise, toolsets, and resources around the globe. Application services
accounts for approximately 90% of TCS's revenue in Canada and SAP is a large
focus for TCS, particularly for new license sales and implementations.
T a r g e t s f o r S A P S e r v i c e s
TCS supports a wide range of SAP products in Canada from an implementation
services, with strong capabilities in ABAP, BOBJ, and logistics. From a vertical
market perspective, TCS has implemented SAP projects in the manufacturing, retail,
utilities, life sciences, travel, and transportation sectors. TCS is targeting buyers in the
financial services and telecom sectors in addition to expanding its presence in
established verticals.
Strengths
A r e a s W h e r e t h e C o m p a n y E x c e l s o r I s A b l e t o D i f f e r e n t i a t e I t s e l f
One of TCS's advantages lies in its global delivery model, the Global Network
Delivery Model (GNDM) that combines nearshore, regional, and offshore solutions
centres. From a customer perspective, the GNDM offering provides access to a
globally integrated resource base, using common processes and standard
infrastructure components.
R e a s o n s f o r I t s S u c c e s s
At least part of its success in the SAP implementation services market is based on
the strong relationship TCS has built with SAP. It was the first India-based SI to be an
SAP global service partner and one of the first Global Run SAP partner.
Key F indings and Opportunit ies
R e a s o n s f o r I t s P o s i t i o n i n g o n t h e C h a r t
TCS is positioned as a Leader in the Canadian SAP implementation services market.
TCS is the leading offshore provider active in Canada, and it continues to significantly
outperform the market average in both project-based IT services and SAP
implementation services. Canadian companies have become increasingly
comfortable in including offshore providers in RFI and RFP proposals and TCS is, as
the largest offshore player active in Canada, often sought after for a contribution.
W a y s i n W h i c h t h e F i r m C a n I m p r o v e I t s P o s i t i o n i n t h e M a r k e t p l a c e
TCS should continue to exploit its leadership position in the market and expand its
capabilities across Canada. TCS has expanded into Western Canada recently, and
this effort should be intensified to expand its presence in the west. TCS should,
wherever possible, demonstrate its success in the SAP implementation market with
public announcements to improve its brand recognition and demonstrate its
capabilities in this growing market.
24 #CA12CAS11 ©2011 IDC
E S S E N T I A L G U I D A N C E
The key finding of this research is the overall strength of the capabilities of the
majority of the vendors. While there are areas in which many vendors strive to
differentiate themselves through strategies and capabilities, there is also a great deal
of commonality among the vendors. This section highlights some of the ways in which
competitive positioning can be strengthened for vendors active in the SAP
implementation services market:
Find niche markets or service offerings to establish an exceptional
relationship with SAP. All of the service providers profiled in this document
have strong relationships with SAP and strong ties to SAP's Canadian leadership
team. Given the existence of a relatively even playing field, there are
opportunities for implementation partners to distinguish themselves through the
development of expertise or competencies in specific vertical markets or
components of the SAP solution.
Carefully balance innovation with practical, near-term service offerings.
Vendors in Canada have to walk a fine line in demonstrating thought leadership
and innovative strategies with a more practical approach to solving real-world
enterprise application issues. By and large, Canadian businesses place thought
leadership lower on the buying criteria checklist. Many of the profiled vendors
have done a good job of leveraging IP and thought leadership material from other
geographies while focusing on tactical issues in Canada. As the market for
implementation services evolves and incorporates cloud computing options,
balancing these two aspects will be challenging and leveraging existing assets
will be even more important.
Strengthen the "partnership" model with customers. Buyers have become
very sophisticated and knowledgeable, and they have a very strong
understanding of their requirements and what they expect from service providers.
In a buyers' market, vendors will have to demonstrate a commitment to flexibility
and the willingness to adapt to buyer requirements in order to be successful. This
message was consistently mentioned and reinforced by end-user interviews and
vendor flexibility and the willingness to embrace the partnership model was often
the key selection issue and separated winning bidders from losing bidders.
Find ways to selectively implement alternative pricing strategies. Vendors
have created a wide range of pricing options from which buyers can choose, and
this has clearly had a positive effect on new license sales and implementation
projects. The vast majority of customers interviewed for this study opted for
traditional fixed-price contracts, but there is still an opportunity for vendors to
establish the applicability of value-based pricing, risk-reward pricing, and other
pricing mechanisms. While some buyers may prefer the relative certainty of
traditional pricing methods, vendors can benefit from demonstrating how other
customers leveraged alternative pricing strategies.
©2011 IDC #CA12CAS11 25
This research project included a customer or an end-user dimension, and there are
numerous items buyers should consider including:
If your business is thinking about implementing SAP technology, there is at
least one service provider operating in Canada that will be a good fit. As
buyers go through the process of selecting enterprise applications, one of the
choices is the use of internal resources, the services resources of the ISV, or
opting for an IT services vendor. This research project has clearly demonstrated
that while there is commonality in service offerings and capabilities, there are
many vendors that take a unique approach to providing SAP implementation
services. Buyers are encouraged to cast a wide net for implementation partners,
and the chances of identifying an ideal match will be higher and be one of the
key factors in producing a success result.
Plan ahead and take advantage of economies of scale and scope. There are
definite advantages for taking a piece-meal approach to enterprise application
implementation, not the least of which is managing expenditures. Conversely,
there are advantages to consider current and future needs for SAP technology
and part of the consideration lies in the ability of vendors to bundle services, and
passing on cost savings on to customers. Vendors are generally willing to
accommodate a variety of project configurations to reflect the comfort level of
buyers and the benefit of bundled solutions and pricing discounts should be
factored into the equation.
Work with SAP to identify a potential service provider. As the chosen ISV,
SAP can work with buyers to identify implementation solution providers that have
specific expertise or experience in a specific area. SAP has invested
considerable time and effort in cultivating and enhancing relationships with
implementation partners, and there are areas where partners work hand in hand
with SAP developing IP, industry templates and solutions, module add-ons, and
supported methodologies. To protect the investment in SAP technologies, buyers
that don't already have a strong relationship with an implementation provider can
leverage SAP as knowledgeable advisor.
Closely evaluate vendors for specific criteria including vertical expertise
and module or functional expertise. Vertical market expertise and "knowledge
of my business" are consistently issues that affect project success, and there are
SAP implementation providers that have cultivated exceptional strength in select
vertical markets or SAP functional modules. Buyers are encouraged to seek out
this expertise, from around the globe, and engage with Canadian providers that
can leverage their global expertise on local projects as a means of improving the
odds and scale of successful outcomes.
26 #CA12CAS11 ©2011 IDC
L E A R N M O R E
R e l a t e d R e s e a r c h
IT Services Firms in Canada: Awareness, Selection Criteria, and Brand
Perception (IDC #CA10CAS11, December 2011)
IT Consulting Services in Canada: Mining 2011 Growth Opportunities (IDC
#CA4CAS11, July 2011)
Canadian Enterprise Applications 2011–2015 Forecast (IDC #CA5ECA11, June
2011)
Canada Professional Services 2011–2015 Forecast (IDC #CA6CAS11, May
2011)
Business Consulting Services in Canada: End-Users Sound Off On Usage Plans
and Opportunities (IDC #CA13CAS11, March 2011)
IDC's Worldwide Services Taxonomy, 2011 (IDC #226877, March 2011)
S y n o p s i s
This IDC study represents a vendor assessment of the SAP-based systems
integration ecosystem through the IDC MarketScape model. This assessment
discusses both quantitative and qualitative characteristics that explain success in the
SAP implementation market in Canada. This MarketScape covers a variety of
vendors participating in the SAP implementation space. The evaluation is based on a
comprehensive and rigorous framework that assesses vendors relative to the criteria
and one another and highlights the factors expected to be the most influential for
success in the market in both the short term and the long term.
"There is no question that SAP is a dynamic force in the Canadian enterprise
application market and one of the leading ISVs active in Canada. One of the key
findings of this research project is that the SAP partner ecosystem is equally as
vibrant and that there are many provider active in Canada that have an excellent mix
of strategic intent and delivery capabilities" says Jim Westcott, research manager,
Application Services at IDC Canada. "It is also apparent that the SAP implementation
services market is highly competitive and that differentiation, while difficult to attain,
will be based on cultivating and maintaining customer relationships and the further
development of industry expertise and functional SAP expertise."
©2011 IDC #CA12CAS11 27
C o p y r i g h t N o t i c e
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