Accenture (NYSE: ACN, ISIN: BMG1150G1116) is a global management
consulting, technology services and outsourcing company. With more than 170,000 employees in 49 countries and reported revenues of US$19.7
billion in 2007, Accenture is the largest consulting firm in the world [3] and is one of the largest computer services and software
companies on the Fortune Global 500 list [4].
History
Formation and early years
Accenture originated as the consulting division of Arthur Andersen which was founded
in 1913 by Arthur Andersen and Clarence DeLany as Andersen, DeLany & Co. Its origin goes back to 1953, when General Electric (GE) asked Arthur Andersen to undertake a feasibility study about
payroll processing and manufacturing automation using computers for GE's Appliance Park manufacturing facility near Louisville,
Kentucky. Arthur Andersen recommended installation of a UNIVAC I computer and printer, and GE
agreed, which is the start of what became the first-ever commercial computer in the United States. Joe
Glickauf was Arthur Andersen's project leader for the GE engagement and was responsible for the payroll processing
automation, launching the era of data processing. Considered to be the father of computer consulting, Glickauf headed the Arthur
Andersen administrative services division for 12 years.
Splitting from Arthur Andersen
In 1989, that division split from Arthur Andersen and began using the name Andersen Consulting. Both Arthur Andersen
and Andersen Consulting consisted of groups of locally-owned independent partnerships and other entities around the world, each
in a contractual agreement with Andersen Worldwide Société Coopérative (AWSC), a
Swiss administrative entity.
Through the 1990s there was increasing tension between Andersen Consulting and Arthur Andersen. Andersen Consulting was upset
that it was paying Arthur Andersen up to 15% of its profits each year (a condition of the 1989 split was that the more profitable
unit - AA or AC - paid the other this sum), while at the same time Arthur Andersen was competing with Andersen Consulting through
its own newly established business consulting service line. This dispute came to a head in 1998 when Andersen Consulting claimed
breach of contract against AWSC and Arthur Andersen. Andersen Consulting put the 15% transfer payment for that year and future
years into escrow and issued a claim for breach of contract. In August 2000, as a result of a conclusion of the International Chamber
of Commerce, Andersen Consulting broke all contractual ties with AWSC and Arthur Andersen. As part of the arbitration
settlement, Andersen Consulting paid over the sum held in escrow (then $1.2 billion) to Arthur Andersen, and was required to
change its name, resulting in the entity being renamed Accenture.
By 2000, Andersen Consulting had achieved net revenues exceeding US$9.5 billion and had more than 75,000 employees in 47
countries [5], whereas Arthur Andersen had revenues of
US$9.3 billion with over 85,000 employees worldwide in 2001.
Emergence of Accenture
On 2001-01-01, Andersen Consulting adopted its current name, "Accenture". The word "Accenture"
is derived from "Accent on the future". Although a marketing consultancy was tasked with finding a new name for the company, the
name "Accenture" was chosen by an employee from the Oslo office named Kim Petersen, as a result of an internal competition.
Accenture felt that the name should represent its will to be a global consulting leader and high performer, and also intended
that the name should not be offensive in any country in which Accenture operates. The choice of name also means that the company
appears closer towards the top of any alphabetised lists, and retains the AC letter sequence of its previous identity.
It is also rumored that while the idea came from someone in the Oslo office, the thought that started that idea came from the
training regime that almost all new employees to AC were put through, where many of the classes were called "Accent on C", a
reference to the C programming language.
IPO
On 2001-07-19, Accenture offered initial public offering (IPO) at the price of $14.50 per share in New York
Stock Exchange (NYSE); Goldman
Sachs and Morgan Stanley served as its lead underwriters. Accenture stock closed
the day at $15.17, with the day's high at $15.25. On the first day of the IPO, Accenture raised nearly 1.7 billion dollars.
Organizational structure
Its organizational structure includes divisions based on client industry types and growth platforms. Industry divisions,
referred to as Operating Groups, include Products (e.g. consumer packaged goods or industrial equipment), Communications High
Technology and Media ('CHT'), Financial Services (e.g. banking, insurance), Resources (e.g. utilities, chemicals, energy), and Public Service. The growth platforms are
respectively titled Management Consulting, Outsourcing, and Systems Integration & Technology.
Service areas
Consulting
- Customer Relationship Management
- Finance & Performance Management
- Human Performance
- Strategy
- Supply Chain Management
Technology
- Enterprise Solutions
- Information Management Services
- Integration
- Infrastructure Consulting Services
- IT Strategy & Transformation
- Microsoft Solutions
- Mobile Solutions
- Research & Development
- Service Oriented Architecture
Outsourcing
- Application Outsourcing
- Business Process Outsourcing
- Infrastructure Outsourcing
Controversy and criticism
Enron scandal and the Accenture name
There is a misconception that the name change from Andersen Consulting to Accenture was simply the consulting firm's attempt
to "hide" from the Enron scandal. This can not be accurate given the timing of events. The
split from Arthur Andersen was requested by the consulting side in 1998, and finally awarded in 2000; the Enron scandal (starting
with the reporting of the infamous "LJM Partnerships") did not occur until well into 2001, with the scandal culminating in the
months after that.
In reality planning for a new name was underway before the arbitration decision was announced (Andersen Consulting partners
felt that the word "Consulting" in the name was a drawback, since the firm was moving into non-consulting work such as
outsourcing and ventures). Interestingly, internal Arthur Andersen emails in 2001 sent to all employees discussed future plans
for Arthur Andersen to move ahead in the market with 3 names: Andersen Tax, Andersen Audit, and Andersen Consulting now that they
had ownership over the name. Arthur Andersen was never able to revive the "Andersen Consulting" name since it was brought down by
the Enron scandal before doing so. Accenture is typically listed in the top 100 corporate brands
[6], so the name change appears to have been a positive for
the consulting firm. The fact that it is disassociated from the Arthur Andersen name certainly proved to be a positive after the
Arthur Andersen/Enron scandal.
Tax haven headquarters
In October 2002, the Congressional General Accounting Office (GAO) identified Accenture as one of four publicly-traded
federal contractors that were incorporated in a tax haven country [7]. The other three, unlike Accenture, were incorporated in the United States before
they re-incorporated in a tax haven country, thereby lowering their U.S. taxes. Still, critics have panned Accenture's
incorporation in Bermuda, generally because they viewed Accenture as having been a U.S.-based company trying to avoid U.S. taxes.
The GAO itself did not characterize Accenture as having been a U.S.-based company; it stated that "prior to incorporating in
Bermuda, Accenture was operating as a series of related partnerships and corporations under the control of its partners through
the mechanism of contracts with a Swiss coordinating entity."
Movement of jobs outside the U.S.
Accenture has been criticized repeatedly by Lou Dobbs of CNN
and others for moving some jobs outside the U.S. that results in loss of work and employment for some U.S. citizens. This is
because Accenture utilizes global Delivery Centres in South Asia and Southeast Asia (such as Bangalore and Mumbai in India, and, Manila and Cebu in the Philippines) to reduce cost and increase profit margin in
outsourcing deals with major U.S. companies. This enables Accenture to perform work (such as software development and call centre
support) at a greatly reduced employee cost as compared to U.S. employees.
As of October 2007, Accenture employs more people in India than in the U.S.
As a balance to the criticism about movement of jobs outside the U.S., Accenture's employee population in the U.S. has
increased from 28,000 in 2005 [8] to more than 29,000 in
2007 [9]. According to the map of Accenture’s Delivery
Centre locations [10], the Delivery Centres are evenly
distributed across the world with 7 centres in Europe, 7 centres in South East Asia and 7 centres in North America.
Because of Accenture's investment in India, many Indian major players such as Infosys,
Tata Consultancy Services, and Wipro, along with other market-setters, such as IBM and Siemens IT Solutions and Services, have become its competitors.
Loss of sensitive data
In September 2007, Accenture was implicated in a high-profile case of loss of sensitive data (sometimes referred to as a
"data spill") on individual American citizens. The information was contained on a backup
computer tape being used in the development of a state government information system in Ohio which was stolen on June 10, 2007; the stolen tape contained the names and Social Security
numbers of every Ohio state employee, more than half a million people owed tax refunds
by the state of Ohio, 602 Ohio state lottery winners who had not cashed
their winnings, 84,000 welfare recipients, and tens of thousands of other individuals,
taxpayer identification numbers for Medicaid providers, bank account information for school districts and local governments, as well a great deal of information related to the state of
Connecticut, also an Accenture client, including "information on nearly every bank account
held by state agencies – including checking accounts, money market accounts, time deposit accounts, savings accounts, trust fund
accounts, treasury and certificates of deposit – which could total billions of taxpayer dollars. The tape lists agency names,
account numbers, bank names and types of accounts ... the account numbers of numerous state procurement cards – known as
‘P-Cards’ – most of which were fortunately out of date ... the names and Social Security numbers of dozens of Connecticut
taxpayers ... [and] numerous detailed documents from the development and implementation of the CORE-CT project," according to a press release by Connecticut governor
Jodi Rell on September 16, 2007. [11], [12] Governor Rell stated that the Connecticut data was being used in Ohio by
Accenture to aid in the development of a similar state government information system.[11]
The tape was stolen from the car of 22 year old Jared Ilovar, a $10.50 an hour
intern in the Ohio Office of Budget and Management, who had been assigned to take home a backup
computer storage device as part of a data security program, quickly terminated by Ohio
governor Ted Strickland during the storm of public indignation after the theft became
public on June 15. Ilovar was fired when he refused to resign, stating that he had been made a
scapegoat for this questionable policy when his car, along with four others, was broken into
outside his apartment complex outside Columbus,
Ohio; "I was a victim of a random car theft, and now I am the scapegoat for the state of Ohio. On the subject of
instructions, I was never instructed by my employer on how to properly secure, store or watch over the data tapes at night. ... I
was the newest person in the door, so I inherited the job of taking the data tapes out of the building. That was the extent of my
instructions."[12]
Connecticut State Comptroller Nancy Wyman
reported that Accenture would pay for two years of identity theft protection for the 57
Connecticut residents and one from out of state whose lost data originated in her office.[12]
Subsidiaries
- Avanade [2]
is a joint venture between Microsoft and Accenture. It is dedicated to enterprise business
solutions on the Microsoft platform.
- Navitaire [3] is a subsidiary of Accenture, dedicated to providing specialized solutions to airlines.
- Accenture Business Services for Utilities [4] is a subsidiary of Accenture, dedicated to providing Business Process systems and
solutions for Utilities
- Accenture National Security Services is a subsidiary of Accenture, dedicated to providing
services directly to United States government and military agencies. It was specifically incorporated as a US subsidiary to meet
a congressional mandate that defense contractors be based in the US.
- Accenture Technology Solutions is a subsidiary of Accenture, dedicated to providing
technology solutions to the client. The solutions work is mainly outsourced to low-wage developing countries like India, The
Philippines and Romania - Accenture India Delivery Centre, Accenture
Manila Delivery Center and Accenture Bucharest Delivery Center.
- Accenture SAP Solutions is a subsidiary of Accenture, dedicated to providing SAP solutions to
the client. It has taken Coritel BPM SAP resources and turned it into this new unit called: ASAPS.
Visual identity
The typeface used in the Accenture wordmark is rotis semi-sans, designed by Otl Aicher in 1988. The right-pointing carat character over the t is intended to indicate the
company's orientation to the future. The character is similar to an accent mark in music.
The corporate descriptor for Accenture is "High performance. Delivered.", which replaced the previous slogan "Innovation.
Delivered." in 2004.
Tiger Woods is a celebrity spokesperson for the company. The campaign uses the
service mark "Go on. Be a Tiger," and the ancillary statement "We know what it takes to be
a Tiger."
See also
References
External links
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