In a bid to cement its expanding lead among Big 5 consulting firms in the customer relationship management market, PricewaterhouseCoopers L.L.P. has entered a broad-ranging deal with Art Technology Group Inc.
PWC, the world’s largest consultancy, and Art Technology, a Web CRM software company, will jointly develop, market and integrate CRM platforms, focusing on big-budgeted companies in industries including consumer packaged goods, finance and telecommunications.
The deal is one of the biggest CRM alliances ever entered into by a Big 5 firm and a technology developer, raising the marketing and financial stakes of such pacts.
Significantly, it is a strike against mid-tier consultancies, which are as keen as the Big 5 to get lucrative CRM engagements but often lack the financial wherewithal to develop their own software. PWC and Art Technology said they will focus on global 2000 corporations.
"Large is a great choice if you have complex legacy systems or a big budget," said Ruth Stevens, president of consultancy eMarketing Strategy.
PWC will become a marketer and integrator of Art Technology’s CRM platforms, primarily its Web-based ATG Dynamo Solution. The New York-based consultancy wants to enhance its ability to advise on Internet CRM software, a relatively untapped sector where b-to-b clients are spending freely.
Art Technology gets boost
Cambridge, Mass.-based Art Technology, meanwhile, gains an established global marketing network, something that the company—whose stock price has been gutted—couldn’t afford to build on its own. (Art Technology’s shares are trading in the $7 to $9 range, off a 52-week-high of $126.87.)
The deal is the largest CRM alliance entered into by either PWC or Art Technology. PWC’s dedication to the pact in terms of manpower and marketing dollars is significant.
PWC has 300 consultants working on Art Technology-oriented engagements, most of them dating back to when the companies began working together in early 2000. (Their work until now has been focused on joint marketplace engagements, such as Transora.) Within the next year, PWC will double the number of consultants working on projects with Art Technology, said Vineet Garg, management consulting services partner.
The growth plans are telling, coming less than two months after PWC announced it would cut 1,000 jobs. Garg said the firm is confident it will win enough CRM business to justify the expense. "The primary reason for this is the growth in the CRM marketplace and the rate at which we expect to win work over others," he said.
The firm will also hold high-profile b-to-b marketing events around the globe, showcasing the Art Technology CRM platforms. Starting next month, for example, it will hold an Art Technology session to court prospective clients at its flagship customer demonstration center in Philadelphia.
"Clients can come in and preview the software prior to making the commitment to buy," Garg said. PWC will also co-sponsor an Art Technology/Patricia Seybold Group marketing tour, which will center on the ATG Dynamo Software.
PWC’s investment in the deal underscores its focus on CRM as a revenue driver amid a downturn in the consulting marketplace. The firm began consulting on the topic in 1996 with 25 consultants. Today, 3,500 PWC consultants are dedicated to CRM and are on track to bring in $1.4 billion in revenue this year, said Adam Klaber, Americas leader of PricewaterhouseCoopers’ CRM consulting practice. "That’s 20% of our business," he said, adding that Art Technology’s Web focus will accelerate that trend. "Many of our large global clients are looking to optimize the Web customer experience. This is what Art Technology does well."
Meanwhile, Art Technologies’ reliance on CRM—and its partner PWC—is even greater. "PWC is our most significant integrated systems relationship," said Ian Reid, senior VP-marketing at Art Technology. Eighty-percent of the company’s revenue is generated through partnerships, he said. "PWC is the largest of those," Reid said, declining to be more specific.