Compaq Arms Itself for CRM, B2B Battles

By Paula Musich  |  Posted 2001-01-29

Compaq global services is set to announce this week a worldwide consulting and systems integration partnership with Cap Gemini Ernst & Young LLP to focus on CRM and e-procurement engagements.

If successful, such arrangements could alter the competitive landscape, making it more difficult for niche vendors to compete for large contracts.

Using Oracle Corp. software and based on Compaq platforms and services and Cap Gemini Ernst & Young business consulting, the deal represents a major image boost for the computer makers services arm. Built to join strengths and create targeted offerings rather than to serve a single engagement, it could also be an example of the kinds of consulting and services pacts that enterprise customers will be looking for.

The alliance, which is not an exclusive arrangement, will pull together Cap Gemini Ernst & Youngs expertise in business process engineering, business process transformation and application consulting with Compaqs "architectural systems integration and outsourcing capabilities," said Jeff Lynn, vice president and general manager of Compaq Global Services, in Stow, Mass.

Both organizations have a strong presence in the financial services and telecommunications markets, where they will focus their efforts.

The scope of the alliance is a departure from past Cap Gemini Ernst & Young arrangements, which were "opportunistic and transaction- focused," said Chell Smith, global leader for advanced development and integration at Cap Gemini Ernst & Young, in Chicago. "Every time someone had a lead, theyd want to structure an alliance. But we werent getting the benefit out of them. Now we are much more focused and demanding in the level of accountability we hold our alliance managers to."

Jennifer Beck, an analyst at Gartner Dataquest, in Lowell, Mass., said the deal is different "because its an agreement to do joint account planning, joint marketing and joint selling.

"This is more of an industry consortium—an agreement between some of the market leaders to create a best-in-class solution around enterprise-class CRM [customer relationship management]. Well see more of these agreements, where some of the market leaders come together and say, Well benchmark some of these hot initiatives for very specific kinds of companies and put together the best components for the initiatives."

Smith said that although the alliance is new, both organizations are already working jointly on several deals.

In addition to pursuing engagements that call for enhancing or installing new CRM applications, the Compaq and Cap Gemini Ernst & Young partnership intends to pursue new Oracle e-procurement engagements, "where companies want to pull together in a cross-platform way all the data and applications available in the enterprise," Compaqs Lynn said.

Beck pointed to the 5-year-old Pinnacle Alliance as another example of a consortium of market leaders. That outsourcing alliance includes Accenture, formerly Andersen Consulting; Computer Sciences Corp.; AT&T Solutions; and Verizon Network Integration Corp.

"This is the kind of agreement that can really have an impact on competitors doing it piecemeal," Beck said. "When you get companies in recognized leadership positions making an agreement on something as generic as CRM, then you have some of the specialists and niche players in a very defensive mode."

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