11 May ARE SAPIENT’S GROWTH OBJECTIVES APPROPRIATE AND/OR REALISTIC? WHY? WHY NOT?
Sapient is a business consulting and technology Services Company based in Cambridge, Massachusetts, that was founded in 1991 to specialize in client/server application development. Sapient was one of a group of companies (along with firms such as Cambridge Technology Partners and i-Cube) that sought to differentiate themselves from traditional consultants by offering strong technical skills and application development to enable companies to get business value out of technology within fixed-fee/fixed-time contracts and by focusing solely on client’s success to achieve long term goals and objectives. In the mid-1990’s, Sapient recognized the potential of Internet and started to offer Internet solutions to its clients. Sapient was one of the few e-business integrators from the dot-com era that recognized offshore opportunities early on. It invested in global delivery capabilities in India starting in 2001.The Company has been through significant changes over the past five years, including significant shifts in its client base, offshore staff mix, and target contract size, but the focus on its purpose, core values, Internet enablement and related technologies is unchanged.
Assignment Questions
1. What is Sapient’s Strategy?
Sapient’s strategy to succeed is to do whatever it takes to deliver the right business results for its clients, on time and on budget using its unique QUADD (Quality, Design, Delivery) engagement approach. Its “strategic context” that is its purpose, core values, vision, goals and client value proposition are the means to achieve. Sapient’s purpose and core values (client-focused delivery, leadership, relationships, creativity, openness and people growth) focused on client’s success. In order to achieve higher growth rates than the industry average it raised the bar in terms of being client-focused. Sapient devises business and IT strategies that improve its clients’ competitive position and performance, as well as the value they realize from their IT portfolio. Sapient has a relatively sophisticated business model is as it has multi-geography, multi-currency operation spread across the North America, Europe and India which represent 50% of its total employees for off-shore activities but the company’s success relies on focusing to develop new ways to create value for clients by significantly changing, or replacing, business processes, operations, capabilities and business models.
2. What key tasks will help Sapient differentiate itself from its competitors? What features of Sapient’s organizational structure impact (positively or negatively) the company’s ability to execute on these tasks?
The key tasks that will help Sapient differentiate itself from its competitors are:
Its strong legacy of delivering solutions to the client on-time and on-budget.
Understanding of user experience; and sophisticated project and program management capabilities.
Expertise in delivering complex projects through teams located in globally distributed geographies through Global Distributed Delivery model that allows Sapient to deliver high-value solutions for its clients quickly and at a competitive cost advantage, thereby increasing overall value. Since the salaries for technologists in India are approximately one fourth of what they are in US, by employing GDD model the company was able to keep same levels of quality and iterative nature of Sapient approach with competitive pricing.
Process, technology-enabled marketing expertise, industry knowledge and assets that they have build since 1991, which enables to develop innovative solutions, deliver these solutions rapidly, provide high quality solutions, reduce risk and lower the overall project cost.
Sapient’s organizational structure impact positively the company’s ability to execute on these tasks. Sapient’s motto to create an impact reflects the passion and commitment to providing superior returns. As the company defines its success by the clients’ success and the value that clients achieve from the services it delivers, it ensures to meet clients’ objectives and solve business challenges. It’s carefully planned hiring process for the
right employees and its core values enable Sapient to offer a unique combination of creativity and discipline as the employees are urged to be creative and find innovative solutions to whatever it takes to deliver the right business results for its clients.
3. How closely did Sapient adhere to its values during its various growth phases?
Through various growth stages of Sapient, the employees were always aware of and in line with the “strategic context” which was used to encompass the company’s purpose, core values, vision, goals and client value proposition. Over the time there have been differences in the definitions of the terms that constitute “strategic context” however its importance in delivering right business results for its clients, on time and on budget has not changed and Sapient relied kept relying on the core values, vision, goals and value propositions to link the purpose to individual’s day-to-day actions. From the early days, the culture became a central topic for all of Sapient’s employees to ensure the “Sapient magic” (passion, commitment, responsiveness, speed, discipline, business focus) and enable Sapient to grow rapidly and adapt to changing environment. In order to protect the culture, company values were articulated to everybody in the company, processes for hiring, firing and promoting were designed and the company has relied heavily on expatriates and training programs to ensure that cultural values. An example of differences in definitions would be Core values; the original four core values were: Client-Focused Delivery, Openness, Pioneering and Growth. These values went through
several changes adding Relationships and Creativity; and renamed Pioneering to Leadership and Growth to People Growth.
4. Are Sapient’s growth objectives appropriate and/or realistic? Why? Why not?
Sapient’s growth objectives in the future as stated in the case are creating value at a massive scale, reaching to 100,000-200,000 employees and be an industry leader that is much bigger than its follower. Although Sapient’s fortune over the years is impressing these are pretty ambitious goals considering the markets it is competing in, namely Sapient competes principally with large systems consulting and implementation firms, offshore outsourcing companies, and clients’ internal information systems departments. These include names like McKinsey & Company, Bain & Company, Boston Consulting Group
etc. which have significantly greater financial, technical and marketing resources, generate greater revenues, have greater name recognition, offer a larger and more diversified suite of products and services and have significantly more global presence. Among the other challenges that Sapient needs to overcome primarily to achieve its growth objectives are; gaining new clients across its application-service portfolio, reducing its significant fixed operating costs, a delivery location beyond India and increasing its global presence. These measures may help to Sapient to overcome the inherited risks to grow such as business, financial condition and results of operations being materially impacted by economic conditions and related fluctuations in customer demand for business, technology and other consulting services, economic, currency fluctuations and political instability recessions in a given foreign country in which it operates by diversifying its global clients and dependence on a country.Sapient is a business consulting and technology Services Company based in Cambridge, Massachusetts, that was founded in 1991 to specialize in client/server application development. Sapient was one of a group of companies (along with firms such as Cambridge Technology Partners and i-Cube) that sought to differentiate themselves from traditional consultants by offering strong technical skills and application development to enable companies to get business value out of technology within fixed-fee/fixed-time contracts and by focusing solely on client’s success to achieve long term goals and objectives. In the mid-1990’s, Sapient recognized the potential of Internet and started to offer Internet solutions to its clients. Sapient was one of the few e-business integrators from the dot-com era that recognized offshore opportunities early on. It invested in global delivery capabilities in India starting in 2001.The Company has been through significant changes over the past five years, including significant shifts in its client base, offshore staff mix, and target contract size, but the focus on its purpose, core values, Internet enablement and related technologies is unchanged.
Assignment Questions
1. What is Sapient’s Strategy?
Sapient’s strategy to succeed is to do whatever it takes to deliver the right business results for its clients, on time and on budget using its unique QUADD (Quality, Design, Delivery) engagement approach. Its “strategic context” that is its purpose, core values, vision, goals and client value proposition are the means to achieve. Sapient’s purpose and core values (client-focused delivery, leadership, relationships, creativity, openness and people growth) focused on client’s success. In order to achieve higher growth rates than the industry average it raised the bar in terms of being client-focused. Sapient devises business and IT strategies that improve its clients’ competitive position and performance, as well as the value they realize from their IT portfolio. Sapient has a relatively sophisticated business model is as it has multi-geography, multi-currency operation spread across the North America, Europe and India which represent 50% of its total employees for off-shore activities but the company’s success relies on focusing to develop new ways to create value for clients by significantly changing, or replacing, business processes, operations, capabilities and business models.
2. What key tasks will help Sapient differentiate itself from its competitors? What features of Sapient’s organizational structure impact (positively or negatively) the company’s ability to execute on these tasks?
The key tasks that will help Sapient differentiate itself from its competitors are:
Its strong legacy of delivering solutions to the client on-time and on-budget.
Understanding of user experience; and sophisticated project and program management capabilities.
Expertise in delivering complex projects through teams located in globally distributed geographies through Global Distributed Delivery model that allows Sapient to deliver high-value solutions for its clients quickly and at a competitive cost advantage, thereby increasing overall value. Since the salaries for technologists in India are approximately one fourth of what they are in US, by employing GDD model the company was able to keep same levels of quality and iterative nature of Sapient approach with competitive pricing.
Process, technology-enabled marketing expertise, industry knowledge and assets that they have build since 1991, which enables to develop innovative solutions, deliver these solutions rapidly, provide high quality solutions, reduce risk and lower the overall project cost.
Sapient’s organizational structure impact positively the company’s ability to execute on these tasks. Sapient’s motto to create an impact reflects the passion and commitment to providing superior returns. As the company defines its success by the clients’ success and the value that clients achieve from the services it delivers, it ensures to meet clients’ objectives and solve business challenges. It’s carefully planned hiring process for the
right employees and its core values enable Sapient to offer a unique combination of creativity and discipline as the employees are urged to be creative and find innovative solutions to whatever it takes to deliver the right business results for its clients.
3. How closely did Sapient adhere to its values during its various growth phases?
Through various growth stages of Sapient, the employees were always aware of and in line with the “strategic context” which was used to encompass the company’s purpose, core values, vision, goals and client value proposition. Over the time there have been differences in the definitions of the terms that constitute “strategic context” however its importance in delivering right business results for its clients, on time and on budget has not changed and Sapient relied kept relying on the core values, vision, goals and value propositions to link the purpose to individual’s day-to-day actions. From the early days, the culture became a central topic for all of Sapient’s employees to ensure the “Sapient magic” (passion, commitment, responsiveness, speed, discipline, business focus) and enable Sapient to grow rapidly and adapt to changing environment. In order to protect the culture, company values were articulated to everybody in the company, processes for hiring, firing and promoting were designed and the company has relied heavily on expatriates and training programs to ensure that cultural values. An example of differences in definitions would be Core values; the original four core values were: Client-Focused Delivery, Openness, Pioneering and Growth. These values went through
several changes adding Relationships and Creativity; and renamed Pioneering to Leadership and Growth to People Growth.
4. Are Sapient’s growth objectives appropriate and/or realistic? Why? Why not?
Sapient’s growth objectives in the future as stated in the case are creating value at a massive scale, reaching to 100,000-200,000 employees and be an industry leader that is much bigger than its follower. Although Sapient’s fortune over the years is impressing these are pretty ambitious goals considering the markets it is competing in, namely Sapient competes principally with large systems consulting and implementation firms, offshore outsourcing companies, and clients’ internal information systems departments. These include names like McKinsey & Company, Bain & Company, Boston Consulting Group
etc. which have significantly greater financial, technical and marketing resources, generate greater revenues, have greater name recognition, offer a larger and more diversified suite of products and services and have significantly more global presence. Among the other challenges that Sapient needs to overcome primarily to achieve its growth objectives are; gaining new clients across its application-service portfolio, reducing its significant fixed operating costs, a delivery location beyond India and increasing its global presence. These measures may help to Sapient to overcome the inherited risks to grow such as business, financial condition and results of operations being materially impacted by economic conditions and related fluctuations in customer demand for business, technology and other consulting services, economic, currency fluctuations and political instability recessions in a given foreign country in which it operates by diversifying its global clients and dependence on a country.
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