Businessmodel of CGI

Customer Segments

CGI has a niche market business model, with a specialized customer segment. The company targets its offerings at a focused group of industry vertical markets where it maintains significant subject matter expertise.

These sectors are government (33% of revenues in 2015); manufacturing, retail, and distribution, or MRD (24%); financial services (18%); telecommunications & utilities (15%); and health (10%).

Value Proposition

CGI offers five primary value propositions: accessibility, convenience, performance, risk reduction, and brand/status.

The company creates accessibility by offering a wide variety of options. Since its founding it has acquired over 80 firms. These additions have enabled it to add many new services to its portfolio.

The company offers convenience by making its services easy to use. It maintains a client-proximity model through which it offers its services through various channels, including on-site at a customer’s premises, and any combination of onsite, near-shore and/or offshore delivery centers located around the world. Many of its professionals live and work near clients.

The company has demonstrated strong performance through tangible results. It has achieved a track record of 95% of projects within budget and on time, and a customer satisfaction score that consistently measures 9 out of 10.

The company reduces risk by maintaining high standards. It earned the ISO 9001 certification for its “project management framework” in 1994, making it the first IT consulting company in North America to comply with the ISO quality standard. It now holds ISO quality certification for its partnerships with its three major stakeholder groups, clients, members, and shareholders.

The company has established a strong brand due to its success. It is the world’s fifth largest independent IT and business process services firm, and the biggest technology firm in Canada. It has 65,000 employees serving thousands of clients from 400 locations across Europe, the Americas, and Asia-Pacific. It generated revenues of C$10 billion in 2015 and has an order backlog exceeding C$20 billion.

Its prominent clients include Bell Canada, Pfizer, ING, TD Bank Financial Group, and Volvo. Lastly, it has won many honors, including placement among the Top 25 Enterprise Companies in FinTech by American Banker (2015), ranking as the 33rd Most Valuable Brand in Canada by Brand Finance Canada (2015), and a rank of #29 in the Washington Technology Top 100 (2015).

Channels

CGI’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, webinars, exhibitions, and conferences.

Customer Relationships

CGI’s customer relationship is primarily of a self-service nature. Customers utilize its services while having limited interaction with employees.

The company’s website features a “Media Center” that includes several self-help resources, including articles, videos, white papers, case studies, brochures, and thought pieces. That said, there is a personal assistance component in the form of phone, e-mail, and social media support.

Key Activities

CGI’s business model entails designing and developing its services for clients.

Key Partners

CGI maintains alliances with several top technology firms, called “Global Partners”. It utilizes expertise at these companies to enhance its offerings for clients.

The specific partners are Microsoft, Oracle, SAP, HDS, Cisco, Dell, and OpenText. CGI also works with academic institutions, research bodies, and market analysts/advisors to identify new innovations and improve its solutions.

Key Resources

CGI’s main resources are its human resources, a group of professionals who have extensive technology, business, and industry expertise. It claims that most of its professionals are company owners, which demonstrates an additional level of commitment.

The company also places a high priority on intellectual property, with 150 IP-based services and solutions.

Cost Structure

CGI has a cost-driven structure, aiming to minimize expenses through significant automation.

Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

CGI has two revenue streams:

Outsourcing (Management of IT and Business Functions) - Clients delegate responsibility for their business or IT functions to CGI, while retaining control over strategic business and IT functions. This stream accounted for 52% of total revenues in 2015 (IT Services represented 41% while Business Process Services represented 11%).

Systems Integration and Consulting – Services include the following:

• Systems Integration - CGI customizes and integrates leading software applications and technologies to develop IT systems that respond to clients’ strategic needs.
• Consulting - CGI provides a full range of management and IT consulting services, including business process engineering, IT strategic planning, business transformation, and systems architecture. Systems Integration and Consulting accounted for 48% of total revenues in 2015.