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AbStnCt: TeiIFernandez,Allan Erank, and tllysses Knotts announced heformal launch oftheir neut company,AnsuerThink Conailting Group, ncorporateil on Apil 23. The hree uterepreoiously managing partnas at WMG Peat Maruick LLP. They had announceil his pastEebntary that they utne ledoittg KPMG to launch their own conailting anil systems integra-tion company.AnswerThink'sgoal is to "rcilefineand rcengine* consulting, through what itc aIIs r ap d pt oblem so o ng.By ChrtsfineFqtasiRoss

SolutionsasednFunctionalxpertiseAnswerThink's charter s to deliver technology-enabledbusiness ransfonna-tion services.To that end, ArswerThink will provide a range of services romhigh-end consulting through technical mplementation. Thesesolutionswillbe targeted at three core unctior,s (and decisionmakers: inance and admin-istration (CFO solutionssrr),nformation technology (CIO lsolutionssN{),ndSalesand Marketing (Customer solutionsil). Someof the offerings withinthesesolution sets nclude functional processTransformation solutionsw forfinance and administration, information technology,and salesand marketing;Knowledge Isolutionsil (knowledgemanagement);Package ntegra-tion lsolutionssMOracleand PeopleSoft);Data Warehousing solutionsw;Systems solutionsil (hardwareand software acquisition and configuration"network integration); Millennium Isolutionssv Year2000);and ElectronicCommerce solutionssNtextranetsand Web-enabledapplications).Thesesolutions and offerings are supported by AnswerThink's expertise ncore technicalskills including IT sbategy, process mprovemenf project man-agement, echnology architecture,advanced technology ntegratiory networkdesigo application development, and databasemplementation.DataqUestProglam:onsultingndSystemntegrationorth mericaProducl ode: PGN-WW-DP-971Pubficationate:une ,1997

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Integrationorth merica

AnswerThink is intentionally choosingnot to go to market by verticalindustry.,a,lthogglrthe companyhas idustry"rtittr and will continuetodevelop theseskills, it believes hat cross-industrybestpracticesare moreeffective han industry-specificbest-in-class pproachejir, delirr"ring valueto clients.Interenteryilsenowledgeharing

The company s pursuing a "knowledgebased"businessmodel that incor-porates,a mindshare, nowledge base-" f future possibilitiesbasedon cur-rent technologiesand business rends,technical -nformation, ndustryinformatiory-bestpractices,methodsand templates,and summaries6fshared earning.This knowledge basewouldihen be the foundation of allconsultantwork, where the consultantswork with clientsto target the mostlikely future outcome,create he businessand technology infraJtructure tosupport that_outcome, nd migrate toward that infrastricture. As newinformation becomesavailablJand asother factorsaffect he desiredout-come, he consultants retarget"and modify the architecfure o maintain thepath toward the desiredoutcome.To make this model ryotk effectivelyArswerThink is embeddingknowl-,ejsemanagementprinciptes into i!3businessmodel and is gto*Tt g aroundtheseprinciples.It is alsosharing these deaswith clientstJenable-amoreeffectivedelivery_andknowledgi trarsfer. Sharing knowledge with its cli-entsenriches he knowledge baiesof both the coripany and-theclient, thenthoseknowledgebasesare enrichedas the client stiarei knowledge *ith ittcustomersand suppliers.AnswerThink believes his conceptof iiterenter-prise knowledge sharingwill be a key competitive r"eapon?or ts clientandfor itself.

Successtrategiesuerhe lextThreeearcAnswerThink is looking at someacquisitionsto fill targetedspaces n itsportfolio of skills. By th-eend of May,the company expicts to have 100employqgsacrosssevenoffices:Miami, Atlanti, nmahetpnia, Boston,Dallas,Chicago,and New York. over the courseof the nixt 12 months, thecompany expects o have500 employees.AnswerThink will alsoconsiderotheracquisitions, -ossibly sminyas 10over the next threeyears. t willlook for com-panieshat mip to AnswerThink's strategicplans, havesimilarcultures,and fit with the existing AnswerThink teamlOnce t hasrecruited a cadreof consultants,AnswerThink believes hat it93ndglive-rsignificantly higher value to clientsby raising consultantreten-tion, thereby ncreasing he experiencebase hat clients cin access.As ameasureof its effectivenessor this goal, AnswerThink plans to keepemployee umover under 10 percenlper year.The companyalso plans to have over $500million in revenue n the nextthreeyears.AnswerThink is funded with venture capital,but the foundersultimately.want the.coTpany to be publicly held. AriswerThink expects ohave an initial public offering. AnswerThink's founders believethal its abil-ity to_succeedn the consulting and systems ntegration spacewill be duelargely to $e leverage t can aihieve is a publicti-rreta coinputry with amajority of associate-ownership.

DPGN-WW.DP-9712 @1997 ataouest June.1997

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ConsultingndSystemntegrationorth merica 3

DataquesterspectiueMost companies n the professional servicessPace an claim at least onespin-off company.Few pin-offs, howevet can claim the experiencelndsenioriW of AnswerThirk. It is clear that the founders have created heirideal businessmodel.Now what remainsfor them is to implement and suc-ceedwith this new model.The differentiators n this businessmodel are hefocus on horizontal skiltsover vertical, the integration of knowledge man-agement nto the businessmodel, and the strategyfor hiring and retainingtalent.Although many corsulting and systems ntegration companieswill con-tend thitthey too offer solutions,the key differentiator for AnswerThink isthat its solutions arenot embedded nto vertical offerings. The company'sdecision not to use a vertical go-to-marketstrategywill need to be watchedclosely.Dataquest esearch hows that end usersexPect heir co1sgl$ngand systems ntegration providers to havevertical expertise.All of themajoi providers of consulting and systems ntegration, including Ande,rsenConsulting,EDS, BM, and most recendyCSC,go to market on verticalexpertise.The market for professionalservices s dynamic, and just asverti-cal expertisebecame mportant in the last few years, t may ceaseo beascritical in the coming years.As vertical industries convergeand redefinethemselves,serviceproviders must determinewhat AlswerThink callsthe"essence" f eachveitical's needsand embed hose nto offerings.Knowledge management s becominga necessity or consulting and sys-tems ntegration pioviders. All of the major companies n this sPace epoltthat their ability tb createand shareknowledge quickly is a cornerstoneoftheir competitive strength.Yet few had the opportunity to build their busi-nesses n-knowledgemanagementprinciples the way that AnswerThinkseeuu to be building theirs.This could almostbe considereda laboratoryfor how well knowldgu marulgementprincipals canbe incorporated intotoday's businessenvironment.Relative to the company'sgrowth strategies,AnswerThink has someambi-tious goals.The company'Jability to achieve ts revenuegoal will be deter-mined by its ability tb achieve ts human resourcesgoal, namely hiring oracquiring peoplg with the right skills and then retaining thosepeoplebysharing company equity.AnswerThink's founders clearly have a solid understanding of coruultingand systems ntegration.They ilso have many yearsof expertise n deliver-ing client solutions.The new businessmodel outlined by AnswerThink isintriguing, but thereare many aspectsof thisbusiness,planthat will belaunihed-for this first time on a lirge scale.The consulting rnarket hascon-sistentlybeen characterizedby a selectset of largeplayers and !he11pre-cipitoui drop to a huge baseof small consulting firms with under $L00million in revenue.Today's strategyfor medium-size consulting organiza-tions seems o be to achiive a certain sizeand then be acquiredby a largeprovider. If AnswerThink succeedsn its goals, he new model will suggestI growth strategy for those consulting playersaiming to compete-wi-th theculrrent ndustr!'leaders. Therefore,n-eit tirreeyears ryitt stro* whetherAnswerThink indeedhas captured the new way to do business.

DPGN-WW.0P.9712 01997Dataquest June ,1997