In 2006, Chris Formant, the then-leader of BearingPoint's Global Financial Services practice, was named as one of Consulting Magazine's Top 25 consultants. In 2008, he left the firm to serve as president of Avaya Global Services, which provides business communications applications, systems and services. In his current role, Formant serves as both a buyer and provider of consulting services. Consulting's One-on-One sat down with Formant to explore his views on the convergence of the product and services side of the IT market.
Consulting: What kind of consulting does Avaya do? How is it tied into the rest of the company's offerings?
Formant: First, the professional services piece is only about 10 percent of our business, but it's at the pointy end of the spear. It's run by a number of systems integration experts, most of whom came out of consulting firms.
We're different from most SI [system integration] shops within the large consultancies in that they usually don't have a have a product to sell along with the service. Our services are tied to our products.
That line is starting to blur. We're starting to see SI shops acquire products to build annuity-based earnings. It's the same reason they're expanding their BPO and other outsourcing offerings. We're also seeing a lot of technology companies rapidly grow services capabilities.
Consulting: Given your experience working for both technology product companies and systems integration/IT consulting firms, how do you see this convergence playing out?
Formant: We're in a mature industry – communications is a mature market, even if we're still innovating. And the more mature the market, the more product companies' growth is going to have to come from services and less from new products.
I saw this trend emerge when I was on the SI side of the market. I chose to join a product company because I felt it is easier to develop services around a product as opposed to the other way around. We already have credibility. No one is more expert in our products than we are.
While an SI firm may have more service capabilities, they are not focused on a single industry like we are. This gives us insight into best practices, more so than regular SI firms.
Consulting: As the line blurs between what you offer and what IT consultancies offer, do you find yourself competing with them?
Formant: In the past we did compete, to some extent, with firms like IBM, EDS, HP, and Accenture. Now, we're trying to build a symbiotic relationship with IT consulting firms. We've developed such expertise around our own products that [these former competitors] are insisting that we work with them. They are using our solutions as part of their larger systems integration project. Our goal is to embed within IBM and Accenture's solutions. We're not trying to compete. We're trying to join their ecosystems. And I think it's going pretty well. We've partnered with them on a variety of things. The concern about us being a competitor has been dispelled.
We're working hard to be a partner and help with part of larger solutions. When an IT consulting firm is working on a larger transformational solution that involves changing IT platforms, process improvements, and overall cost improvement — we'd like to be part of that.
The technology our products offer is facilitating some of these solutions. And knowing how an IBM, Accenture or HP is going to market can better enable us to fit their needs. For example, one of our first things I did when I got here was to establish vertical lines of business to fit to the way the SIs go to market. We had to fit within the framework they use.
Consulting: Which side of the market do you enjoy more?
Formant: Working for a consulting firm and a product firm can both be fulfilling. But, I like what I'm doing right now. It's one thing to advise someone to do something, but it's quite another thing to follow your own advice and do it. Consultants sometimes get frustrated and want to get behind the wheel and drive the engagement.
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