Answerthinks

ldentll
The consultingfirm bornof the Big Five
is workingto shedits pure-play
Crls
image
e-services
alk to the founders ofAnswerthink, and it's easyto ersin the companyt leadershipdid not. So Fernandezand a few
seethey havea major idenriry crisison their hands. dozen ofhis colleaguessetout to createa new model for big con-
In [act, they may very well be running one of the sultancies.Among the defectorswereformer KPMG CTO Allan
least-understoodcomoaniesin the solution- Frank, now presidentof Answerthink, and UlyssesKnotts,
provider businesstoday. former managing partner for marketing and sales.
The company that envisioned itself as an alter- The young companyimmediatelytried to posi-
By
native to Big Five consulting, only to find itself tion itself as the alternativeto Big Five consul-
rhrust into the dreaded'Webintegration boom
RichCirillo tancies-with the traditional experienceand
and bust of2000, wants to set the recordstraight: photographyby ERP skillsto serveenterpriseclients,but without
Itb not purely an e-servicescompany. Never has
MichaelMazzeo rhe stodgyattitude and stiffbureaucracy.In addi-
been. Never will be. tion, Fernandez'dream of running a public com-
"Ve have alwaysstruggled with an identiry try- pany becamea reality with a 1998 IPO that raised
ing to define who we are," saysAnswerthink CEO Ted more than $33 million. (lronically,KPMG madeits own
Fernandez."lW'ereally are unlike the pure-plays,the largeBig IPO earlierthis year,the first ofthe Big Five to spin out rnto
Five and systemsintegrators." the public markets.)Answerthink then went on a buying spree,
Stereotypesaside,the company that grew to more than $300 scooping up more than l0 companies, including financial
million in 2000 revenue,with 1,500 employees,believesit has benchmarkingand accountingfirm Hackett Benchmarkingin
got the right combination of technicalskills,businessprowessand 1997 and \7'eb developmentshop Think New Ideasin 1999.
!
strategicthinking to do what so many high-flying servicesfirms
havenot-go from promising, young start-up to industry leader. Right Place, Wrong Time
'!?hat q
"The question now is, do they want to be?"'says Ask Fernandezto describe Answerthink and the word he
Stan Lepeak,chief researchofficer for Ajunto.com, who has inevitably returns to is hybrid. "We specificallysaywe'renot one z

been following the company since its formation. "They have of rhosee-integrators,but we'renot one of thoseIBMs or Big Five
a nice little consultancy,but I don't think that was the goal companies,"he says."W'e'reright in the middle, kind of a hybrid."
when they startedout. They wanted to challengethe Big Five Unfortunately, \WallStreethas neverliked hybrids. In fact, Fer- o

and make much more of a name for themselves." nandezsaysanalysts'inabiliry to understand Answenhink early on
The company was founded in 1997 when Fernandezwalked made them lump it togetherwith dozensof pure-play e-services
out of KPMG PeatMarwick's strategicservicesconsultancy,leav- firms sprouting up everywherein 1999. That comparison only
ing his role asnational managingpartner amid an internal power inrensifiedafter the companys mergerwith Think New Ideas.
struggle regarding the firture ofthe company. Fernandezhad aspi- In many ways,you could sayAnswerthink experiencedthe
rations to spin it offinto an independentpublic company.Oth- worst of both worlds. The company,which debuted more than V
V
VARBusiness
www.varbusiness.com 55 |
*,,
Answerthinkls ldentiLy Crisis

a year beForethe dot-com crazerook ofl couldnt Fullyenjoy the
benefitsoI the e-servicesrevolutionbecause its corebusinesswas
still in CRM and large-scale ERP packages.During the boom,
its stock price reachedalmost$40 per sharebut nevermatched
the astronomicalhighs oFcomparries like Razorfishand Scient.
Yet when things went sour,it felt the full elfect of the bubble's
burst,hitting a major stumblingblock in late2000 asthe pool
for dot-com servicesquickly dried up.
Answerthink alsofound itself at the centeroFthe electron-
ic privacydebatewhen it obtainedthe identitiesof a dozen
anonymousInternet usersand suedthem for allegedlywriting
disparagingcommentsand revealingconfidentialin[ormarior-r
about the company on Yahoo'smessageboards.One o[ the
defendantsturned out to be Hackett Benchmarkingfounder
Gree P Hackett.
There'snothingas important
as buildingan intellectual
culturethat bringstogether
Ironically,Answerthink seesnew acquisitionopportunities
in many of the strugglinge-services
companiesthat were once
consideredirs closestcompeririorr.
Planning Answerthink's Future
\While Fernandez recognizesthe opportunities in wireless,
speechrecognitionand other ernergingtechnologies, he'sa firm
believcrthat the realmoney for the company is still in leverag-
ing traditionalIT architecturesfor e-business. "lt may seemlike
old hat, but Web adoption is still at suchan infancystage,itk a
joke," Fernandezsays.
To that end, the company's key technology partners
include IBM and Sun on rhe hardwareside;Oracle,People-
SoFtand SiebelSystemsfor applications;BEA, SCT and See-
Beyondfor middleware;and Informatica and BusinessObjects I
ffi
for data warehousing.
On the business-strategy side,Answerthink's
grcateststrength comes from Hackettk financial
benchmarkingar.rdworkfl ow-analysiscapabilities.
(The companysaysit hasinformation on 80 per-
cent ofthe Dow, two-thirds ofthe Fortune 100 and

ff
40 percentoFthe Fortune 500.) On the technol-

the differentskills and ogy-applicationside, Answerthink uses those

benchmarkingskills to comparepackagedappli-

pefspeCtiVgS . -AllanFrank,Answerthink cationsbasedon Functionaliry-helpingclientspit

Vith its stock dropping to lessthan $5 per share,the com-
pany made a tough decisionat the end of 2000 to cut rela-
tionshipswith its dot-com clients,which accountedfor some
W
the likes of Oracle againstPeopleSoft,or Siebel
againstSAP-to seehow eachwould fit into their
sPeclnclnfrastructures.
The companyhasalsobr.rilta strong relationshipwith IBM
and is a key member of Big Blue'ssuccessfulConsultantsand

iln
15 percentof its revenue,and lay off more than l 0 perccntof Integratorsprogram,working closelywith IBM on a number
"'We actually went to clienrsand said that unlesswe
its staFF. of wirelessinitiativesand vertical-market solutions,including
could defir-reour businessrelationshipsunder incredibly srrict liFescicncesand hcalthcarc.
61sdl16s1m5-rnanyoFwhichthey simply couldnt match-weU "[Answerthink is] very strong in things like benchmarking
haveto wind down or simply terminateabout l5 relatior-rships," and research,businesstransformationand technologyintegra-
Fernandez- says."That wasvery diFficultto do-and it impact- tion, and it is successfully applying that expertisein a vertical-
ed our irnmediatcgrowth-but it was the right decisior-r." rnarket approach,"saysAnne Smith, vice presidentof IBMI
Answcrthink hasbeengrowing steadilyeversince,with rev- Consultantsand Integrators.
Intro
enueexpectedto increase From$311 million lastyearto close But more than beingjust a go-to partnerForverticalmarkets, Y o ucr u s
to $500 million this year,and it hasa good chanceto get back Answerthink hasrnanagedto snagIBM asa major client, help-
to profitabilityby rhe end of 2001. ing thc technologygiant build and shapeits online strategy.
c0mpute
In hindsight, the company'sinabiliry to take Fulladvantage "Certainly,in this economicclimate,you get a lot of people H a n d h eI
of the e-servicesphenomenonm:ryhavebeen a blessingin dis- out theresaying,'Don't focuson strategy,just focuson cutting
guise.Vhile most publice-scrvices companiesnow havestock costsand on increasingrevenue,"'saysJ.P Frenza,marketing informa
priccs oF lessthan $ I a share,Answerthinkk issueshave since director of IBMt Consultantsand Integratorsinitiative. "But
rebounded somewhat and are holding their own. (By late Answerthink has a very good strategypractice.They are con- Wirele
August,the stockheld steadyat roughly$9.50 per share.) stantlywalking aror.rndthe table and trying to look at fthings]
"fAnswerthink]hascomeout oFthisOK," Ajunto.com'sLep- frorn diFFerentdirections,"he says."Theyve beenreallyhelpful, Le
eaksays."To its benefit,it had a lot more operarionaland man- taking the strengthsof IBM and bending and rwisting them to
agementskills,and it did a betterjob at settingup a consultrn- whrt tl-remarket reallywants asfar ascurrency."
cy. It may not havepicked the hot trendsand may havemissed
out on someopportunitiesthere,but it hasstrongersales,account- The Brains Behind Answerthink
managementand client-relationshipskills than most of the e-ser- Answerthink'sernployeebasecan be broken down into three cat-
vicesfirms had." egories:businessstrategyand transformation,packageimple-

56 VARBusinesswww.varbusiness.com September 17,2OO1

 Answerthink's ldentity Crisis

m e r ) t : r t i o n ,a n d t c c f r n o k r g v i n r c q r a t i o n a n d i n t er a c t i v e n r c c l i : r . *'orlis-1r'}',,,he cells'Answer-thinking"
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