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Sapient has lost some of its luster in recent months, but the company remains a shining example of a well-run consulting firm. In fact, this is the third consecutive year that Sapient has earned a top-10 spot on our Smart 100 Companies list.
The company announced a $48 million Q1 loss as we went to press, but Sapients track record and cash reserves ($262 million) make for a promising future. In fact, since its inception in 1991, Sapient has nearly doubled revenue every year to reach $503.3 million in 2000. And while there was an earnings hiccup in Q4, net income was still more than 25 percent higher for the same period year over year.
While Sapient didnt focus on any one big initiative last year, there are a few highlights worth noting. First off, the Cambridge, Mass.-based consultancy continues to bolster its management team. Among the executive appointments last year was CFO Edward G. Goldfinger, a Pepsi-Cola veteran who brought extensive international experience and business-development skills to Sapient. Goldfingers appointment and the consultancys decentralization of its leadership structure last spring were important steps toward global expansion.
The company also promoted executive VP Sheeroy D. Desai as COO. Sapient says the position was created to strengthen the companys ability to deliver business and technology consulting services worldwide. Before his latest promotion, Desai, a longtime Sapient executive, was in Europe steering the companys expansion abroad.
The international push is paying some early dividends. Roughly 20 percent of Sapients revenue now comes from outside North America. Sapient India, for instance, expects revenue to grow to $35 million this year from $5 million in 2000, according to internal company estimates. In addition to a flagship office in New Delhi, Sapient plans to open shop in Bangalore, Indias technology capital. Sapient also has offices in London, Milan, Munich and Tokyo.
The company has been hot on the alliance and acquisition trail, as well. Sapient joined forces with Genuity, an e-business infrastructure company, to provide end-to-end services to digital businesses. The two brought a century-old American business icon, S&H Green Stamps, into the digital age. S&H greenpoints.com integrates online and off-line commerce through a multifunctional, personalized experience.
On the heels of its deal with Genuity, Sapient partnered with Thomas Weisel Capital Partners L.P. to help established companies launch standalone Internet businesses—a niche that has been virtually untapped by integrators. Gen3 Partners is among the few players focused on that niche.
And to further broaden its own expertise in strategy, creative design and technology, Sapient acquired Human Code Inc., a developer of rich media and broadband applications for entertainment and e-learning companies, in August of 2000.
What can we expect going forward? More of the same, according to a Sapient spokeswoman. “Our strategy this year is the same as its always been: to provide business value to our clients by understanding the key business problems they face and by solving those problems.”
Nevertheless, Sapient faces its share of challenges. Though the company has plenty of cash on hand, Sapient isnt immune to the economic slowdown that has killed or maimed rival consulting firms like MarchFirst. As we went to press, Sapient announced a Q1 financial loss and issued an earnings warning for Q2. Still, plenty of fallen rivals envy Sapients market position.