Q: Can you discuss the impact of AI XPLR version 2.0 on client engagement and conversion rates? A: Ted Fernandez, CEO, explained that AI XPLR version 2.0 has significantly improved client engagement and conversion rates. The integration of LeewayHertz's GenAI implementation skills has enhanced the response from clients. The new version allows for detailed simulations of enterprise use cases, providing clients with a comprehensive view of potential AI applications and their ROI, which has led to higher conversion rates.
Q: What are your expectations for IT budgets for AI initiatives in 2025 compared to 2024? A: Ted Fernandez, CEO, anticipates a marked increase in IT budgets for AI initiatives in 2025. While 2024 was focused on awareness and initial exploration, 2025 is expected to see more substantial allocations towards GenAI initiatives, driven by the need for high-impact and feasible AI solutions.
Q: How has the acquisition of LeewayHertz changed your conversations with clients? A: Ted Fernandez, CEO, noted that post-acquisition, the conversations have become more strategic and impactful. The collaboration with LeewayHertz has added credibility and implementation capability, allowing Hackett Group to engage more effectively with clients' AI leadership and IT teams, leading to more qualified and meaningful engagements.
Q: What are your plans for scaling GenAI implementation capabilities? A: Ted Fernandez, CEO, stated that the company plans to aggressively increase its GenAI implementation capabilities, aiming to double the resources acquired from LeewayHertz and those developed internally. This expansion is crucial to meet the growing demand for GenAI solutions.
Q: What is the outlook for the eProcurement segment, and how does it affect overall growth? A: Ted Fernandez, CEO, mentioned that if the eProcurement segment remains flat, its negative year-over-year impact will dissipate by the end of Q1 2025. Without this drag, the GSBT segment would have shown a 5% growth in the quarter.
Q: Can you provide an update on the market intelligence offerings and key personnel? A: Ted Fernandez, CEO, confirmed that a key leader will return to the company shortly, which is expected to positively impact the market intelligence offerings. This individual will reengage with the team to drive year-end results and the 2025 plan.
Q: What should we expect from the Oracle and SAP segments moving forward? A: Ted Fernandez, CEO, indicated that both Oracle and SAP segments are expected to continue their strong performance, with guidance suggesting 3% to 5% year-over-year growth, reflecting ongoing momentum in these areas.
Q: How does AI XPLR enhance the company's IP-led offerings and downstream revenue? A: Ted Fernandez, CEO, explained that AI XPLR enriches the company's IP-led offerings by integrating benchmarking and best practices, which should increase the downstream revenue impact. Historically, IP-led entry points drove 40% of total revenues, and AI XPLR is expected to enhance this further in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.