Accenture Investing $900M To Retrain 200,000 Employees In Next-Generation Technology

Accenture is spending $900 million to retrain all 200,000 of its technology-focused employees in emerging IT such as cloud, artificial intelligence and robotics.

The Dublin, Ireland-based company, No. 2 on the 2016 CRN Solution Provider 500, has educated more than 70,000 workers on new architectures, intelligent platforms and automation over the past year, according to Chairman and CEO Pierre Nanterme. Accenture wants to have its remaining 130,000 technology employees trained on new IT within the next two years, Nanterme said.

’The large-scale transformation of our business is requiring a very significant investment in our people to ensure they have the most relevant skills to serve our clients both today in the future,’ Nanterme told Wall Street analysts Thursday during the company’s earnings call.

[RELATED: Accenture Buys European ServiceNow Player To Stretch Capabilities Beyond IT Service Management]

Accenture has digitized all of its training and education initiatives to maximize cost efficiency, Nanterme said. This training initiative underpins Accenture’s all-out assault on digital, cloud and security services, which accounted for 45 percent – or $8 billion – of the company’s revenue between September and February.

Providing top-notch training has also enhanced Accenture’s ability to attract the best talent in the industry, Nanterme said. Accenture recently broke the 400,000-employee mark, although roughly half of those workers aren’t part of the company’s technology business.

Accenture’s sales for the quarter ended Feb. 28 climbed to $8.32 billion, up 4.7 percent from $7.95 billion last year. That fell short of Seeking Alpha’s revenue projections of $8.34 billion.

Net income fell to $876.7 million, or $1.33 per diluted share, down 36.9 percent from $1.39 billion, or $2.08 per diluted share, the year prior. That edged out Seeking Alpha’s earnings projection of $1.30 per share.

Accenture’s stock price fell $4.60, or 3.64 percent, in trading Thursday to $121.86 per share. Earnings were announced before the market opened.

Accenture is also angling to increase the talent of its workforce through mergers and acquisitions. Nanterme said the company has spent $800 million on 16 acquisitions over the past six months, and plans to spend some $1.5 billion on deals by the Aug. 30 end of Accenture’s fiscal year.

’Through acquisition, we are recruiting very deep skills,’ Nanterme said. ’We believe it’s going to take too long to grow organically.’

The 11 acquisitions in Accenture’s most recent quarter focused on next-generation digital, cloud and security capabilities, vendors such as Microsoft and vertical-specific skills, Nanterme said. Some of the verticals targeted for investment by Accenture include retail, utilities, aviation and asset management, he said.

All told, Nanterme said Accenture has adopted a two-pronged talent strategy focused both on making the skill set of existing employees more relevant for the future and acquiring top-notch, high-quality talent from the outside market.

’We have kind of a perfect blend,’ Nanterme said.

Accenture’s consulting sales grew to $4.41 billion, up 3 percent from $4.29 billion last year. Outsourcing sales, meanwhile, climbed to $3.91 billion, up 7 percent from $3.65 billion last year.

From an industry standpoint, sales for Accenture’s products group grew to $2.26 billion, up 14 percent from $1.99 billion last year due to strong momentum across all geographies and industries. Financial services revenue improved to $1.77 billion, up 5 percent from $1.68 billion the year prior due to strength in the banking and capital markets segments, particularly outside North America.

Communications, media and technology sales inched ahead to $1.62 billion, up 1 percent from $1.61 billion last year as strength around software and electronics offset continued woes for Accenture’s European communications and media team. Health and public service revenue climbed to $1.51 billion, up 2 percent from $1.48 billion the year prior due to strong results from Europe and growth markets.

Resources revenue, meanwhile, fell to $1.14 billion, down 2 percent from $1.17 billion the year prior as continued weakness in the chemicals and natural resources segments, particularly in North America, more than offset strength in the utilities segment.

From a geographic perspective, Accenture’s North American sales jumped to $3.96 billion, up 4 percent from $3.79 billion last year, driven by a stellar performance in the U.S. and a strong market position and pipeline.

Accenture’s European sales, meanwhile, improved to $2.83 billion, up 2 percent from $2.78 billion the year prior thanks to double-digit growth in the United Kingdom, Germany and Switzerland. And in growth markets, Accenture’s sales soared to $1.53 billion, up 12 percent from $1.37 billion the year prior due to double-digit growth in Japan, and strength in China and Australia.

For the coming quarter, Accenture expects revenue in the range of $8.65 billion to $8.9 billion, as compared with the Zacks estimate of $8.79 billion. And for Accenture’s 2017 fiscal year, which ends Aug. 30, the company expects non-GAAP earnings per share in the range of $5.70 to $5.87, adjusted upward from last quarter’s projection of $5.64 to $5.87 per share.