No Ordinary Joe
Amid revenue slowdowns, profit warnings and bankruptcies, Accenture is one of only a handful of professional services firms still partying like it's 1999. The company, founded more than a decade ago as the consulting division of Big Five auditing firm Arthur Andersen, continued to grow its business and attract new clients last year. Despite the economic slowdown, the world's third-largest provider of IT-related business services generated a record $2.78 billion in earnings on $11.4 billion in revenue for 2001. And the company says it is on track
to squash analysts' expectations for its first quarter of 2002, with revenue closing in on $3 billion and operating income of more than $400 million, the highest single quarter amount ever generated by the company. (That's counting $24 million lost due to the events of Sept. 11.) In addition, the company already has solid bookings of more than $1 billion for next quarter.
Not bad for a company that debuted anew one year ago with a name no one had ever heard of and a strategy that differed from most of its traditional Big Five competitors.
A casual observer might think that the company is stuck in some new-age time warp, where the economic downturn hasn't yet occurred. In reality, though, Accenture is emerging as the prototypical IT professional services company of the future: Despite its size (more than 75,000 people working in 110 offices worldwide) it's lean, efficient and nimble.
To get to that point, the company embarked two years ago on a bold strategy spearheaded by CEO and chairman Joe Forehand, which many industry watchers believe will set a new standard for how professional services organizations operate. Even though Accenture has the size and breadth of services to be considered an end-to-end solution provider, it recognizes the importance of a strong network of friends, partners and affiliates whose products and services complement its core offerings. It's a relevant lesson for virtually every company, from a 75,000-person shop like Accenture to a small solution provider with only a dozen workers.
"Let's face it, there's nobody in the industry that can be the best at everything across the whole spectrum of hardware, software, technology services and consulting," Forehand says. "Our clients value [a company that is an independent services organization that can make sure their interests are put first and foremost, but also one that has a network of alliance partners it can bring together."
What's more, it's also rich in talent and awash in new business from stable, reliable and, most important, ambitious customers. Take Avaya, for example. A business partner of Accenture's,the two organizations are collaborating to deliver CRM and contact-center business solutions to enterprises,Avaya recently signed a multiyear, multimillion-dollar outsourcing deal with Accenture to provide end-to-end learning services, including Web-based e-learning and classroom-based training. When the telecommunications vendor decided last year to transform its education and training programs, it searched for an IT solution that could scale to reach all of its employees, business partners and clients across the globe. After considering a variety of potential solution providers, Accenture became the obvious choice because of its global reach and outsourcing capabilities, as well as its access to cutting-edge simulation technologies, according to Ron Ketlas, Avaya's vice president of human resources, sales and marketing. "We felt they would be in the best position to accomplish the objectives we had," he says.
Ironically, things weren't always this way for the former consulting unit of Big Five accounting giant Arthur Andersen. Far from it. Just two years ago, the company was the unlikeliest of success stories. Then it was mired in a bitter divorce from its former parent and under siege from Web integrator start-ups that were moving quickly, raiding its staff and cornering the market for e-business deals from clients,new and old alike.
Rather than buckle under the pressure imposed by newcomers like MarchFirst or Scient, Accenture knuckled down and re-examined its future. It continued to make investments in new ventures and partnerships, and it honed its expertise in new technologies. It also worked its marquee client roster and persuaded those clients to stand by it, while making friends with some of the heaviest hitters in the industry. The most prominent is Microsoft, whose CEO Steve Ballmer joined Accenture's board of directors late last year.
"Accenture brings to the table an unparalleled combination of global scale, technology expertise, business expertise and industry acumen,whether in government, energy, banking, insurance or high-tech," Ballmer says.