Capgemini integrates its management consulting, digital and creative units

12 September 2018 Authored by Consultancy.uk

Capgemini has merged its consulting, digital and creative businesses, in a move that sees one of the world’s best known consulting brands leave the stage. The new unit, Capgemini Invent, bundles Capgemini Consulting with a host of recently acquired firms to forge a holistic advisory group with over 6,000 consultants in more than 30 offices and 10 creative studios around the world.

Traditionally consultancies have focused on large scale corporate transformation and IT projects; whilst the domain of marketing services has primarily been advertising strategy and implementation. However, amid an age of digital transformation, when the future of a company’s strategy must take into account design and digital needs, and vice versa, large consulting projects are increasingly framed around enhancing the customer experience, blurring the lines between the two professional services disciplines.

Consultancies have spent recent years in something of an arms race to accommodate these changing needs, with most major brands having acquired digital marketing agencies to boost their design offering. For instance, the purchase of Karmarama, among a broader $1 billion spending spree, gave Accenture the ability to connect the thinking behind new strategic ideas with the actual implementation of end-to-end customer experiences through elements such as user experience design, customer focused data analytics and customer engagement strategies. Similarly, brands such as BCGDeloitte, IBM, PwC and many more have built up digital design wings to help cater to these ends in an ever morphing consulting industry.

Capgemini has been competing with these brands on a similar basis thus far. Deals in this vein saw the IT consultancy buy up customer engagement firm LiquidHub in February 2018 for £400 million; Fahrenheit 212, an innovation consultancy bought in the first quarter of 2016; and three creative design agencies – Idean, Adaptive Lab and Backelite. Digital strategy and experience design consultancy Idean was purchased in February 2017, in a move that added offices in Palo Alto, Austin, Los Angeles, New York, San Francisco, Helsinki and Berlin. London-based Adaptive Lab, a digital design studio with a team of 50 professionals, was picked up in June this year, while digital technology innovation wing Backelite has been a Capgemini brand for a longer period and has been groomed internally over the past years.

Capgemini’s targeted acquisition strategy did seem to pay dividends in terms of new business, with the firm winning two contracts – one from fast food giant McDonalds, ousting major competitor Atos from that role, along with a contract to develop an RPA Centre of Excellence for the UK Government – however Capgemini has announced a change in direction as the firm bids to get even more out of its capacities.

Capgemini Invent

Along with Capgemini Consulting, the group will now transition the previously mentioned properties into a single unified brand, Capgemini Invent, as a global business line catering to the digital innovation, consulting and transformation needs of clients. The move marks a major departure from the tactics of Capgemini’s competitors, who traditionally favour keeping these business strands as separate entities. For example, Deloitte Digital is separate from the Big Four firm’s consulting wing, as is the case with PwC Digital, BCG (which operates with BCG Platinion, BCG May, BCG DV and BCG Gamma alongside BCG), and the majority of other major professional services players.

According to Paul Hermelin, Chairman and CEO of Capgemini – the umbrella professional services firm of around 200,000 professionals generating revenues of €12.8 billion, which will contain the Invent brand – the decision to transition to one brand follows from the need to benefit from the firm’s multi-disciplinary strengths in consultancy and innovation. At the same time, he added, in order to better compete in the market, Capgemini needs to complement that offering with expertise in design and creation, and technology and data science.

He elaborated, “We have built Capgemini Invent to meet client demand for advanced digital services… This integrated global business line combines perfectly our specialist capabilities and expertise that are needed to design, create and trial new digital solutions and business models of the future, supported by the strengths of our broader business to implement them at speed and scale.”

Cyril Garcia, formerly CEO of Capgemini Consulting, who will now take up the top job at Capgemini Invent, said that the launch of the broader subsidiary comes at a time when businesses are more than ever facing digital-led change. Garcia added that across all dimensions of an organsiation’s value chain, from primary processes to back-office or even outsourcing models and ecosystem partnerships, digitisation is radically transforming strategies and operating models. No matter which area of digital change is taken under scrutiny – whether it is the Internet of Things, blockchain, robotics or Industry 4.0 – studies from economists and academics all point at the strategic and operational benefits that can be unlocked through embracing smart technologies.

Capgemini itself released research last year to support these assertions, finding that companies which excel in adopting digital within their ranks – digital masters – book significantly higher revenues and profits compared to their lagging peers. The group that enjoys such a digital edge is however strikingly small – under 20% of the companies analysed by the firm’s researchers managed to make the cut. Among the barriers to successfully reaping the perks of digitisation are a host of classical challenges that need to be overcome, including leadership support and capabilities.

In a statement, Garcia confirmed that he believes that with the blended capabilities of Capgemini Invent, the consultancy can better adapt to “help business leaders plot a path to the future and provide the right vehicle for getting there.”

Blend of businesses

Capgemini Invent sees a number of business units coming together, with the hope that its advisors will be able to “ideate and design digital transformation strategy and deliver tangible digital solution prototypes and transformation plans”, ultimately helping client to “stay relevant and be ahead of the competition”. The unified brand will boast a team of over 6,000 employees working under a harmonised culture, making Capgemini Invent one of the largest consultancies with European-origin. In comparison, Netherlands-headquartered BearingPoint has nearly 3,000 employees, France’s Wavestone draws on a workforce of 2,800 employees, German-origin strategy consultancy Roland Berger hosts around 2,400 employees, and among others, the likes of Atos Consulting, L.E.K. Consulting and Simon-Kucher & Partners are all much smaller.

The team of Capgemini Invent has been internally arranged to functions across the major service areas of Strategy, Organisation, Digital, Innovation and People & Change, with industry groups spanning all major sectors. On top of the firm’s functional offerings, the consultancy has crafted six integrated practices to build on combined capabilities across units.

Capgemini Invent offers a new model for digital transformation delivery, bringing key sector expertise together with a broad cross-section of disciplines, from strategy and technology to data science and creative design.”
– Cyril Garcia, CEO of Capgemini Invent

These are; Innovation and Strategy, which focuses on helping organisations strategise, design and build the products, services, and business models of the future; Customer Engagement, which will look to support businesses improve their client interactions and customer journeys; Future of Technology, which is aimed at assisting clients capture the possibilities of emerging technologies such as robotisation, blockchain, or Internet of Things, among others; Insight Driven Enterprise, looking at guiding clients with how to embrace advanced data analytics, AI and automation to enhance business decision-making; Operations Transformation, which will focus on helping organisations with increasing productivity and efficiency as well as reducing time to market, across supply chains, operations or logistics; and People and Organisation, which will aim to ensure that change is successfully embedded in the organisation by developing the culture, workforce and skills needed in the digital age.

Capgemini Consulting leaving the stage…

The news does mean that Capgemini will also be making the landmark decision to retire its well-known consulting brand – a call which will is likely to cause much debate in the consulting space. Capgemini Consulting’s brand has a strong recognition in the European market in particular. In the UK the firm was earlier this year named by FT and Statista as a top 50 leading management consulting firm, and with Capgemini’s UK profits having almost halved in 2017, there will be some who wonder if taking its most renowned brand off the market in Britain will be the best way to turn this around.

The Capgemini Consulting brand was formally formed in 2004 when the group unveiled a new branding and structural changes, but the consulting subsidiary’s heritage traces back to the 1990s. In 1991, Gemini Consulting was formed through the integration of management consultancies United Research and The MAC Group. This wing of the business received a major boost in 2002, when the Big Four were in the midst of offloading their consulting wings in the wake of the Enron scandal. Capgemini acquired the entire consulting business of Ernst & Young for roughly $11 billion, months before Big Four rivals KPMG and PwC sold off their consulting businesses, respectively to KPMG Consulting (today BearingPoint) and Atos in some parts of Europe (today Atos Consulting), as well as IBM, with only Deloitte plumping to retain its advisory arm at the eleventh hour.

While Capgemini’s move to rebrand is in essence is no more than a redesign of internal capabilities, and the firm will continue to fulfill consulting work, Capgemini Invent will still need to work hard to build recognition in the marketplace. While this might be a challenge, however, the firm’s CEO is confident it is the right move, and will pay dividends in the long-term.

Cyril Garcia highlighted that the new name better conveys the firm’s broader capabilities, stating, “Today, it is not only advising clients on digital innovation and transformation, but is also designing, building, operating and transferring expertise to help them reinvent their core businesses, along with inventing and implementing truly new processes, products and services. Capgemini Invent offers a new model for digital transformation delivery, bringing key sector expertise together with a broad cross-section of disciplines, from strategy and technology to data science and creative design. It also engages with its growing innovation eco-system of partners and start-ups to benefit digital projects.”

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