Part IV: Professional Services Firms
This authorised reprint contains material excerpted from a recent Celent report profiling and evaluating card management and transaction processing professional services firms. The full report is 72 pages long. This report was not sponsored by 91快活林 in any way.
This reprint was prepared specifically for and granted to 91快活林, but the analysis has not been changed from the original report. For more information about the full report, please contact Celent through our website (www.celent.com) or info@celent.com.
Introduction
The demand for cards management and transaction processing (CMTP) technologies and capabilities continues to grow. Banks and other institutions looking to either establish or upgrade their CMTP capabilities are asking: What options do I have? How should I approach the challenge? Who can I turn to for help?
In 2014, Celent kicked off a research effort to understand the landscape of vendors and service providers in card management and transaction processing. The main goal of this research is to develop an overview of each vendor鈥檚 capabilities, focus areas, and market presence. We were also looking for the vendors鈥� perspectives on industry trends. Given the broad scope of this research, we DID NOT seek to evaluate and identify the best products and services available on the market.
We already published the first two reports in this research series:
We are now publishing a pack of reports focusing on vendors. This is the report on professional services firms with all the participating vendor profiles. It addresses three key research questions. The remaining reports in the series focus on vendor landscape overview and the other vendor categories.
The content in the first two sections of this report, Selecting a Professional Services Firm and Market Presence Analysis, has already appeared in the corresponding sections of the companion report, Card Management and Transaction Processing Vendors, Part I: Vendor Landscape. These sections are included here again so that this report is self-sufficient. Readers already familiar with this content from the vendor landscape report can skip it and go straight to the individual vendor profiles. Details on the research approach and overall participants are given in the Appendix
Key Research Questions
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Selecting a Professional Services Firm
Introduction
Professional services firms have deep domain expertise and support financial institutions by offering consulting (e.g., target operating model advice), software development and system integration, and large scale programme management services. Many also offer a variety of IT and business process outsourcing services (ITO and BPO).
No matter what type of partner is required, Celent always advises its financial institution clients to conduct a rigorous vendor selection process. Our ABCD vendor assessment framework is often seen as a great starting point and covers four dimensions: Advanced technology, Breadth of functionality, Customer base, and Depth of customer service. Other factors are often important as well, such as financial strength of the company, degree of specialisation and focus on the specific solution, and cultural fit. Of course, price is nearly always a factor in making the final decision.
Given the broad scope of this research and diversity of companies participating, the full ABCD framework here is not appropriate or feasible 鈥� it works best when assessing a fairly homogenous set of solution providers. However, there are other ways to highlight differences between various companies in a given category.
We developed a bespoke differentiation framework for professional services firms. It identifies six dimensions relevant when making a vendor decision. Each of those dimensions has different possible values. To make it easier to plot multiple companies across those dimensions with different values, we assign each value to a number from 1 to 5. These numbers are simply an index to a specific value attribute within a dimension. It is not a ranking or score; i.e., the value of 5 is not necessarily better than 1 and vice versa. Vendors are plotted against those dimensions resulting in a spider chart unique to each vendor.
We also introduce the main questions clients should be considering when going through a vendor selection process. We focus on key questions, although not all of them may be relevant in all situations. And they are certainly not exhaustive; each client鈥檚 situation is unique, and other specific factors may be most important to them.
The framework begins the vendor differentiation process by focusing on dimensions which are relevant and can be compared across multiple vendors. The detailed vendor profiles included in this report shed much more light on each company. Finally, as discussed above, some of the detailed questions relevant for vendor selection are not addressed as part of this research.
Key Questions
Clients looking to select a professional services firm should be considering the following top 10 questions:
1. Who are the leading professional services firms available in our geography that have the capabilities we need?
2. Does the firm specialise in providing certain types of services (e.g., consulting, systems integration, ITO, or BPO)?
3. What is the depth and breadth of the firm鈥檚 domain expertise in cards? What is the balance between the domain specialists and a 鈥渄edicated pool鈥� of resources?
4. Does the firm have a global delivery model? What is the balance between onshore听and offshore resources?
5. How much does the firm invest into training its people? Is that training available to customers if required?
6. Does the firm have partnerships with leading product firms? Which ones?
7. Can the firm make use of accelerators and ready artifacts around reference architecture, process maps, UAT scenarios, scripts, etc.?
8. What is the firm鈥檚 track record on delivery / implementation / transformation projects?
9. Can we rely on the firm to deliver leading edge innovative solutions?
10. What are the commercial terms of the proposal? Is the firm willing to take any risk to demonstrate commitment to successful delivery?
Differentiation framework and discussion
Table 1 describes the framework for differentiating professional services firms. Eight professional services firms participated in our research and are discussed here: Accenture, Capgemini, Cognizant, HCL, Infosys, Mphasis, TCS, and 91快活林
Table 1: Differentiating the Professional Services
Overall, the professional services firms are not easy to differentiate. Nearly all the ones participating in our research are large firms with sizable cards and payments practices, which offer a broad range of services across multiple geographies. If institutional and individual relationships are important for all vendors in winning the business, we suspect that they matter even more for professional services providers.
We start with total revenue 鈥� the indication of company鈥檚 overall scale and financial strength.
Table 2: Professional Services Providers: Revenues
Table 3: Professional Services Providers: Cards Clients and Employees
The number of clients is harder to estimate, because not all the vendors reported client numbers specifically for cards and payments. Furthermore, the numbers are rather small compared to packaged software vendors and processors, although they only tell part of the story. Many of those numbers represent multiyear, multimillion-dollar relationships comprising multiple projects.
The last two dimensions 鈥� geographical and services strength 鈥� are all about emphasis. For example, all professional services providers participating in our research have clients around the world; however, we wanted to highlight companies that had at least 50% of their clients in a particular region.
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Table 4: Professional Services Providers: Geographical and Services Strengths
Market Presence Analysis
As discussed in the previous section, the full ABCD vendor evaluation is not appropriate or feasible here, given the broad scope of this research and the diversity of companies participating. Based on this research, we cannot evaluate and rank specific products or services (for example, to call out who has the best expertise to support cards platform transformation).
However, this research has enabled us to assess the market presence of individual vendors. We have a view on each company鈥檚 range of products and services and the client base: what clients (i.e., size, type), how many, and in which markets.
We considered two dimensions when evaluating the vendors鈥� market presence:
This analysis allowed us to divide all vendors into three categories based on their market presence (see Figure 1 on page 7):
1. Global Leaders 鈥� companies with a large and established presence on a global scale, serving a broad range of clients. Most of them continue to grow, but they also have to increasingly fight off competition not only from other global players, but also from global challengers and regional champions.
2. Global Challengers 鈥� companies with a rapidly growing client base, increasingly outside their domicile. Being a challenger does not mean that their solutions, range of services, or professional expertise are in any way inferior to those of global leaders. To the contrary, often they are challenging with more modern solutions, forcing global leaders to stay on their toes and continuously invest in their products and services. Global challengers often start with smaller markets and smaller clients, before tackling Tier 1 clients or large, complex markets, such as the US. In other words, global challengers are growing their presence in multiple markets.
3. Regional Champions 鈥� companies mostly focused on a specific country or region, or a number of countries, mostly in the emerging markets. Again, this category does not imply any judgment on the quality of vendor products and services; they may be a perfect choice for clients based in those countries. Some of them harbour international/global ambitions and may already be global players in other parts of the business, but they remain regional players in the CMTP space.
We do not distinguish companies further within each category, and the companies within the category are listed alphabetically. By implication, their relative placement within each category in Figure 1 on page 7 does not mean anything; the fact that the company is listed lower on the Y axis does not mean that it participates in fewer markets, and its placement relatively to the right on the X axis does not imply a more established market presence.
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Figure 1: Market Presence of Professional Services
Obviously, the companies discussed in this report are not the only vendors available for clients to choose from in different markets. We asked each participating vendor to share with us which companies they find themselves competing against most frequently. This serves two purposes: it provides additional input when determining the company鈥檚 market presence and highlights other potentially strong competitors that did not participate in our research, especially local vendors.
Market presence analysis was not easy to do for all vendors, but it was particularly hard for professional services firms. Almost by definition, all companies that participated in our research are large global services providers; we did not include any local consultancies and IT firms.
We recognise five professional services firms as global leaders: Accenture, Capgemini, Infosys, TCS, and 91快活林, all of which have large and strong cards and payments practices and serve many clients around the world. While still substantial, the cards practices at HCL and Mphasis are relatively smaller; this is why those two firms are our global challengers. Both of those firms have substantial cards operations practices and are seen as key competitors in that area by other companies.
Finally, Cognizant is our professional services regional champion, recognising that while it competes globally both as a firm and in cards, 85% of its cards clients are based in North America, with another 10% in the UK. Cognizant was mentioned by competitors just as many times as our global leaders, indicating that it is recognised as a formidable competitor, particularly in the core markets of the US and UK.
We had nearly 50 other companies which did not participate in our research but were mentioned as competitors at least once. Given the breadth of our research, it is not that surprising, because the companies mentioned range from well-known but specialist software providers, such as the fraud management vendors FICO and Actimize, to the US debit processors, such as Shazam or PSCU, to small or local software vendors and professional services firms. Atos, CGI, Equens, Genpact, IBM, Mindtree, Syntel, Vantiv,and Visa are perhaps the largest and most well-known firms that did not take part this time in this research, but were mentioned by other competitors.
However, the competitor with the highest score was 鈥渋n-house/ internal IT.鈥� Although many packaged services firms view internal IT as allies, nearly all processors said they were competing against in-house processing and internal IT departments. In other words, the first battle for them is often to convince the issuer of the merits of outsourcing, and the second is to be selected as the processor of choice. For professional services firms, as one of them eloquently put it, 鈥淭he internal bank IT is a competitor depending on the parent firm鈥檚 sourcing strategy and current maturity of the internal IT.鈥�
The rest of this report describes detailed profiles for eight professional services firms that participated in our research. Most profiles have the following standard sections:
Company Overview
91快活林 is a global provider of consulting, IT services, outsourced R&D, infrastructure outsourcing, and business process services. 91快活林 has been in the IT business since 1980. Its clientele spans industry leaders with 978 active global clients and 200+ global 500 / Fortune 1,000 clients from industry verticals such as Financial Services (Banking, Securities and Capital Markets, and Insurance), Manufacturing, Energy and Utilities, Telecom, Retail, and Healthcare. The company is headquartered in Bangalore, India.
91快活林 reported annual revenue of US$7.3 billion in March 2014 with a 16% year-on-year growth. Banking and Financial Services (BFSI) segment constitutes approximately 26% of the overall operations and revenue
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Table 5: 91快活林 Snapshot
Celent鈥檚 card management and processing technologies (CMTP) research spans three categories of products and services: packaged software, outsourced processing, and professional services. 91快活林 is a professional services provider.
Profesional Services in Cards and Payments: Overview
91快活林 combines the ability to assess a business problem, manage the project lifecycle, and deliver solutions that positively impact business outcomes. 91快活林鈥檚 strategy has been to continuously build deep domain knowledge in the cards and payments market. As a global services provider, the company recognises that cards and payments services and systems are ubiquitous, global, ever-changing, and exist across the financial supply chain. 91快活林 partners with clients for card payment strategies, product development, implementation, integration, and operations as needed.
The complete spectrum of services provided by 91快活林 on cards is provided in Error! eference source not found.. A total of 3,000 + delivery professionals, 800+ BPO professionals delivering cards and payments services, and 60+ senior consultants and advisors are currently involved in providing next-generation solutions to global customers.
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Figure 2: 91快活林 Cards and Payments Practice Overview
Table 6: 91快活林 Professional Services in Cards and Payments
Figure 3: 91快活林 Cards and Payments Revenue Split by Service Type
Key attributes of 91快活林鈥檚 presence in cards and payments include:
鈥� Deep expertise in acquiring, issuing, and network domains; functional expertise across card transaction processing, customer management, disputes, clearing, and settlement.
鈥� Experienced team working on some of the major cards packaged solutions such as VisionPLUS, CAMS and BASE24, and processing platforms from First Data and TSYS.
鈥� Investments and engagements in running simulated environment for card processing through creation of POS and ATM testing labs, EMV testing lab, and use of network simulators.
鈥� Blend of consultants having strong background in business as well as card technology to assist customers in their transformation journey.
鈥� Capability to deliver platform-based card back office solutions in areas like dispute and chargeback processing (e.g., 91快活林 has processed more than a million card disputes as part of back office work).
鈥� Product engineering experience of working with ATM and POS manufacturers and expertise in security aspects (PCI) of card industry. All 91快活林 facilities where the company delivers card-related services are PCI certified.
鈥� Expertise and thought leadership on alternate payment solutions and emerging technologies (e.g., tokenization, NFC, mobile wallets).
鈥� 91快活林 has been selectively enhancing the ecosystem of partners where there is a strong case for joint approach to market. Specific to cards industry, 91快活林 has put in place the following partnerships:
听With First Data, for providing development, implementation, and testing services on First Data鈥檚 VisionPLUS and AccessPLUS suite of software solutions globally.
听With Kony Solutions, to offer an integrated portfolio of mobile application technology and services, specifically mobile wallet solutions.
鈥� 91快活林 has been investing in technology and consultants having deep expertise in emerging payments to stay ahead of competition and provide advisory and consulting services to customers.
鈥� Some of the key areas of where 91快活林 delivered solutions include:
鈭� Digital wallet solutions: 91快活林 implemented an NFC-based wallet solution for a leading bank in Hong Kong which was going to be further rolled out to an additional 20+ countries for the bank.
鈭� Analytics solutions:
鈥� A chat analytics solution for a leading issuer in the US to improve tracking and analysis of customer issues.
鈥� Big data platform implementation for a leading card issuer in US to provide analytics and visualisation capabilities.
鈭� Developing API services and back office systems for a leading national P2P emerging payment network.
鈥� As a system integrator for multiple banks and payment processors, 91快活林 has acquired significant domain and technical knowledge in this area. 91快活林 has leveraged that knowledge and expertise to build solutions and frameworks which can add value to client portfolios and complement its services, such as:
鈥� Resolv: 91快活林 BPO鈥檚 flagship solution on dispute and chargeback processing (see Figure 4 on page 13) that delivers 25鈥�30% automation and up to 40% TCO reduction. This solution has been developed through 91快活林鈥檚 expertise in handling more than 1.2 million card disputes with 150 FTEs dedicated to this area of work. It is built on 91快活林鈥檚 Base)))TM framework, which is also used to offer platform-based BPO service to clients in different areas such as Finance, Accounting, and Payroll.
鈥� PCI Frameworks: 91快活林 has developed a security framework to comply with PCI-DSS needs for its customers which enables them with the legal requirements such as Privacy Act and Identity Theft Prevention Act for protecting credit card numbers. 91快活林 has an encryption/decryption framework that helps clients deploy the business and the architecture standards adopted by the company. This is a web services based vault framework to provide credit card reference number to applications on heterogeneous platforms. The solution also has automated key management for credit cards stored within the vault.
鈥� Smart Offers: a smart offer solution on smartphone delivery platform to provide the user with an integrated offer that is proactive and contextualised by location and customer purchase behaviour (see Figure 4).
鈥� Merchant Analytics Solution: the solution demonstrates how analytics such as peer group analysis, footfall analysis, and social analytics can be made available to merchants across devices and Internet in a visual display. This ensures merchants can get real feedback on their products and services. This solution is specifically addressed to merchant service providers and acquirers; however, this can be tweaked to meet the needs of private-label card issuers and network providers who are interested in providing visualisation solutions to their merchant partners.
鈥� Payments Academy. 91快活林 has a payments academy which has been operational since 2002. The academy has been responsible for ensuring that payment experts provide domain and card technology training specific to the demands of the market.
鈥� Competency Frameworks. There is an operational competency framework through which payment professionals are continuously evaluated on domain and card technology. Specific levels are assigned to the professionals based on the evaluations. These levels are mapped to their career development within 91快活林.
鈥� Card Products Training. 91快活林 has a multi-tier training program on card packaged solutions like VisionPLUS for its employees as well as customer organisations on request. The programs are both web and classroom based. On average, 150+ resources are trained and certified annually on VisionPLUS competencies before being deployed into client consulting assignments.
Figure 4: Examples of 91快活林 Solutions
Market Presence
91快活林 is working with merchants, acquirers, network associations, and issuers to help them build cards solutions. An indicative list of 91快活林 customers in major geographies with core focus on issuing banks is shown in Table 7 on page 14. The company鈥檚 experience implementing or customising the products for issuers, acquirers, and networks is explained below.
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Table 7: Selected 91快活林 Clients (Not Exhaustive)
Example engagements in card issuing services are:
Example engagements in acquiring and merchant services include:
鈥� Testing of POS software upgrades.
鈥� Testing the new software version and any new terminals.
鈥� Platform migration from TANDEM platform to TANDEM Itanium series.
鈥� Application migration from BASE24-Classic to BASE24-eps.
鈥� Implementation of a Disaster Recovery system.
鈥� Data migration.
Example engagements in card networks:
鈥� Offers maintenance services to the customised version of BASE24 platform and is involved in developing enhancements to the core platform.
鈥� Enables global compliance releases to the core platforms and also runs a white-labeled certification service to the network鈥檚 bank clients.
鈥� Offers application development and maintenance for transaction processing, stand-in processing, parameter management for authorization, and payments system for credit/debit cards.
鈥� Supports development and maintenance of Big Data Analytics services suite for global merchant analytics group and commercial cards analytics.
鈥� Provides maintenance services for the loyalty platform offered to multiple issuers.
鈥� Offers product development and deployment support for Risk & Authentication products.
Why 91快活林
We asked each vendor to describe why they believe their clients choose them. 91快活林 described its key differentiators below.
The key attributes and qualities which ensure we win engagements with banks delivering cutting-edge solutions are:
Summary
An earlier section of this report introduced six dimensions to differentiate the professional services providers. Again, the numbers are simply an index; they are not a ranking or score. 91快活林 summary is highlighted in Bold in Table 8 and Figure 5.
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Table 8: 91快活林 Summary
Figure 5: 91快活林 Summary
Leveraging Celent's Expertise
If you found this report valuable, you might consider engaging with Celent for custom analysis and research. Our collective experience and the knowledge we gained while working on this report can help you streamline the creation, refinement, or execution of your strategies.
Support for Financial Institutions
Typical projects we support related to cards and payments include:
Vendor short listing and selection. We perform discovery specific to you and your business to better understand your unique needs. We then create and administer a custom RFI to selected vendors to assist you in making rapid and accurate vendor choices.
Business practice evaluations. We spend time evaluating your business processes, particularly in card issuing and digital payments management. Based on our knowledge of the market, we identify potential process or technology constraints and provide clear insights that will help you implement industry best practices.
IT and business strategy creation. We collect perspectives from your executive team, your front line business and IT staff, and your customers. We then analyze your current position, institutional capabilities, and technology against your goals. If necessary, we help you reformulate your technology and business plans to address short-term and long-term needs.
Support for Vendors
We provide services that help you refine your product and service offerings. Examples include:
Product and service strategy evaluation. We help you assess your market position in terms of functionality, technology, and services. Our strategy workshops will help you target the right customers and map your offerings to their needs.
Market messaging and collateral review. Based on our extensive experience with your potential clients, we assess your marketing and sales materials鈥攊ncluding your website and any collateral.
Related Client Research
Card Management and Transaction Processing Technologies: A Primer May 2014
The Market for Card Management and Transaction Processing Technologies: A Dozen Observations October 2014
Card Management and Transaction Processing Vendors: Part I: Vendor Landscape June 2015
Card Management and Transaction Processing Vendors: Part II: Packaged Software Vendors June 2015
Card Management and Transaction Processing Vendors: Part III: Issuer Processors June 2015
