Posts Tagged ‘Accenture’

Niche players like IPsoft & LiquidHub eating into outsourcing pie of companies like HCL & Accenture

April 17th, 2014

About two years ago, Sears wanted to exhibit a mobility application at an Apple show. But the US retailer was queasy to outsource the contract to the large services-led technology firms, including those in India, as it wanted to get the project up and running in less than six weeks.outsourcing52

This proved to be the entry point for a Bangalore-based startup set up just two months earlier in November 2011 with an aim of making it big in the social, mobility, analytics and cloud, (SMAC), space. The startup, Happiest Minds, did not even have a client then.

The firm’s pitch to the retailer was simple: it’ll put together an A-class team to ensure the project is completed in a short period.

Happiest Minds went on to win what was then a small contract: the order was $100,000 (Rs 60 lakh).

“We were able to deliver an award-winning application in record time and this led to an ongoing relationship with the retailer even though there were multiple incumbents,” said Ashok Soota, executive chairman of Happiest Minds.

But more than the ticket size, the order helped Happiest Minds get recognition and bring the focus on other niche players, including IPsoft, and LiquidHub. These players had not just started winning contracts by competing against big technology service firms, including HCL and Accenture, but also forced many of them to forge partnerships.

“There is a change in the C-suite’s way of thinking. Not everything is about cost-reduction now, there is more thought on speed-to-market and innovation. And not everything requires the scale of a global player,” Sushma Rajagopalan, partner and MD of digital technology company US and India-based LiquidHub, told ET.

Firms operating in automation, mobility and analytics solutions as well as cloudbased deployment are competing in areas that are seeing the fastest growth for Indian IT players. Digital technologies contribute 5-10% of the industry’s revenue, according to the National Association for Software and Services Companies.

The total digital opportunity is pegged at $164.1 billion (Rs 10.2 lakh crore) in 2013, according to industry body Nasscom and is estimated to grow 75% to $287.3 billion (Rs 17.8 lakh crore) by 2016. The smaller players not only have innovative products but also deep existing experience in the IT industry. “They (startups) know that they are competing with the big vendors so they go the extra-mile and they are fast,” said Deepak Sharma, executive vice-president and head of digital initiatives at Kotak Mahindra BankBSE -0.13 %. “Sometimes you can’t wait months to do things; you need to turn offerings around quickly and startups are nimble.”

Happiest Minds, which claims to have 80 customers, believes that almost 90% of its wins came when it was bidding against some of India’s largest IT companies.

Not for nothing then are investors backing sector-focussed firms: LiquidHub, which has about $125 million (Rs 753 crore) in revenue, raised $54 million (Rs 325 crore) in funding from private equity firm ChrysCapital, Credit Suisse and PPM America Capital in March.

The growing startup ecosystem in India also presents a challenge to Indian IT firms. Earlier this month, the Indian Software Product Industry Round Table held an event to connect startups to the chief information officers of large corporates like the Aditya Birla Group, US insurer Accretive Health, payment processor Vantiv and others. To be sure, homegrown technology players are taking steps to mitigate the danger from smaller more nimble players — from incubating emerging technologies themselves to partnering with the most disruptive companies in the sector.

Uday Chinta, managing director at robotic automation provider IPsoft, said as the company bade for projects, about seven of 10 times, it competed with leading players. “Now, of course, most of the global IT firms have partnerships with us. We collaborate and work with them to deliver best solutions for the clients,” said Chinta whose company claims to have more than 500 clients, across financial services, telecoms, and retail verticals.

Pravin Rao, president and board member at Infosy, said: “There is enough opportunity for everyone in the ecosystem as long as you are able to build the capabilities and thinking in that direction.”


Accenture de-emphasizes the term “outsourcing” – is this the final death knell for the O word?

April 7th, 2014

A momentous event quietly occurred on Friday which could well have significant ramifications for the business practice that calls itself “outsourcing”.outsourcing40

Accenture dropped the term from its strategy line, “Consulting, Technology, Outsourcing”, which it had been using for more than a decade, changing it to “Strategy, Digital, Technology, Operations”. In addition – and perhaps more significantly – it renamed its BPO growth platform “Accenture Operations”.  The BPO term is still used when you drill right down to the specific business service lines, but Accenture wants to emphasize to its clients that it provides end-to-end services that go beyond just BPO.

As many of us universally lamented last weekend, the outsourcing (so-called) industry has long been struggling to create a clear, meaningful identity and establish recognized career paths for almost two decades, and much of this is because so many of the service providers, advisors and enterprise customers have failed to create a positive brand perception – and communicate effectively – the value of partnering with service providers to improve and extend operational capability and productivity.

Accenture was one of the last bastions of the outsourcing term, and its de-emphasis of it may be the final nail in the coffin for the dwindling band of outsourcing diehards still clinging to the fantasy that an “outsourcing industry” actually exists. In fact, the term IT Outsourcing is already practically dead, with only a couple of advisors and IBM (oddly) still using it, so let’s see which of the providers actually still use BPO as their official terminology:

Well – there you have it – most have actively distanced themselves from the term, with only Capgemini, Dell, Infosys, Wipro and Sutherland still wed to it. Oh – and for some inexplicable reason, the major HR services firms like ADP still use it, even though the HR profession looks more negatively at outsourcing than any other.

The Bottom-line:  It doesn’t ultimately matter what the providers call it, more how the enterprise clients view it

In my view, “outsourcing” really describes the initial act when an enterprise moves the responsibility for processes and operations over to an external party. Once that act is complete, those processes being executed form part of an externalized service or operation for the customer.  ”Operation” signifies more than merely a service, but the orchestration of an end-to-end suite of processes, so I give Accenture credit for the being the first provider brave enough to use the “operation” term.  Now we can sit back and observe many of the above providers also slip that word onto their websites and marketing copy.

However, whatever these providers name their offerings, the real litmus test is going to be whether the buyers of services will start approaching service partnering as a genuine opportunity to improve their capabilities. Ultimately, they are the ones who would need to drop the O word and view services as what they are:  services.

Accenture’s move is the most significant yet in terms of rebranding the outsourcing business – my best guess is that O will be pretty much gone from our business vernacular within a year.


Accenture awarded 2nd Tokyo contract for business recruitment

April 2nd, 2014

Management and outsourcing company Accenture has been awarded a second contract by the Tokyo Metropolitan Government to attract foreign companies to relocate to cities business zone (Special Zone for Asian Headquarters).Outsourcing28

The contract will see Accenture continue to seek to bring foreign businesses to Tokyo through March 2015 after Accenture successfully completed its previous contract requirements in bringing foreign firms to Tokyo.

The contract renewal comes as Tokyo continues to raise its international competiveness and investment appeal.

Hiroshi Goto, who leads Accenture’s Health & Public Service, said: “We will do our best to recruit foreign companies, based on the experience and knowledge we’ve gained during the first year of this project.”


Accenture Revenue Grows But Misses Estimates

March 28th, 2014

Accenture ACN -5.03%  PLC said its fiscal second-quarter revenue grew as the consulting firm benefited from improvement in its outsourcing business.Outsourcing28

However, shares slipped as the top line met the company’s own guidance range but was well below analysts’ more bullish predictions.

The company said it faced pricing pressures and higher payroll costs, along with lower margins in the early stages of a few large contracts in the period.

The consulting company, which competes globally for contracts with technology giants like International Business Machines Corp. IBM -1.45%  and Hewlett-Packard Co. HPQ -1.30%  , has posted mostly improved earnings in recent periods and has seen strong revenue growth in its outsourcing business. Accenture was tapped in January as the lead contractor to fix the troubled insurance marketplace set up under the Affordable Care Act, replacing another contractor.

The company also raised its full-year earnings forecast, now seeing $4.50 to $4.62 a share, from its prior view $4.44 to $4.56. Revenue is now expected to grow 3% to 6%, from its previous estimate of 2% to 6%.

For the current quarter, the company estimates net revenue of $7.4 billion to $7.65 billion, compared with estimates of $7.56 billion.

For the period ended Feb. 28, Accenture reported a profit of $671.3 million, down from $1.1 billion a year earlier. On a per-share basis, which includes income attributable to noncontrolling interests, earnings fell to $1.03 from $1.65.

The year-ago results included benefits of $243 million related to prior-year U.S. federal tax liabilities and $224 million from a reduction in reorganization liabilities. Excluding those gains, last year’s earnings were $1 a share. Analysts predicted $1.04 a share for the latest period.

Net revenue grew 1% to $7.13 billion, in line with company projections of between $6.95 billion to $7.25 billion. Analysts polled by Thomson Reuters were expecting $7.21 billion.

Consulting revenue fell about 1% to $3.7 billion, while outsourcing revenue increased about 4% to $3.43 billion.


Accenture and RSA Extend Multi-Year Application Outsourcing Agreement

August 22nd, 2013

Accenture has signed an extension to its application outsourcing agreement with RSA for five additional years through the end of 2020. The extended agreement is designed to further reduce RSA’s IT costs, enhance its product offerings and online presence, and improve customer service.Outsourcing12

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Under the agreement, originally signed in 2003, Accenture will continue to provide ongoing development, implementation and maintenance services for RSA’s applications that support the insurer’s commercial and personal lines operations in the UK, including customer relationship management, claims processing, policy administration and back-office applications.

Giles Baxter, RSA UK & Western Europe Information Systems and Change Director, said: “Making it easy for our customers to interact with us is extremely important and our relationship with Accenture ensures that we’re able to do this. The extension of our partnership with them reflects their commitment to delivering a superior service while at the same time offering us cost savings and we look forward to continuing the work we do together to deliver what’s best for our customers.”

“Insurers need to evolve continuously to address policyholders’ changing needs, and so do their IT systems,” said Simon England, managing director and head of Accenture’s Insurance industry practice in the UK and Ireland. “I am delighted that we have been able to extend our successful application development and maintenance contract with RSA as this is a testimony to the business value Accenture has helped RSA create since 2003. The new arrangement will build on the work we have already done to further streamline RSA’s business processes and improve application design, building and testing.”

The initial agreement was extended in 2010 for three additional years through 2015, and has now been extended for five additional years.

The application outsourcing services provided to RSA are being delivered through Accenture Property and Casualty Insurance Services, a business service within Accenture’s Financial Services operating group that provides management consulting, technology and outsourcing services to property and casualty insurers. Its services are designed to help insurers achieve profitable growth through product innovation, enhanced customer interactions and reduced operating costs.


Accenture to create 140 jobs in Ireland

August 12th, 2013

Global management and consulting firm Accenture has announced its intention to expand its workforce in Ireland, creating 140 jobs.Outsourcing11

The company, which already employs approximately 1400 people in Ireland, plans to fill the positions over the next twelve months.

Accenture works with customers across the public and private sector, also offering technology and outsourcing services.

The company is looking for graduates and professionals in the areas of IT,  with a knowledge of Java, cloud computing and digital technologies.

Accenture created an analytics centre in Ireland almost two years ago to meet the growing IT demands of its clients.


Accenture launches outsourcing service for post-trade processing

July 22nd, 2013

Accenture has partnered with Broadridge to launch an outsourcing services solution aimed at helping European investment banks reduce post-trade processing costs.

The Post-Trade Processing service, based on Broadridge’s securities processing technology, will be offered to European and Asian customers looking to outsource back office functions.  The service is designed to reduce cost per trade and will cover areas such as settlement, books and records, asset servicing, operational management and control, real-time data access and administrative accounting.  Outsourcing25Accenture

By outsourcing back-office functions, investment banks will be able to launch products and enter new markets more easily, Accenture said.

Accenture announced French financial services firm Societe Generale Corporate & Investment Banking (SG CIB) as the first customer of the service, with a number of SG CIB employees with post-trade processing skills joining the outsourcing firm as a result.

“Societe Generale Corporate & Investment Banking and Accenture share the same vision of what could be the future model for securities processing among investment banks: industrialising some services by mutualising processing activities and costs across multiple institutions,” said Christophe Leblanc, Chief Operating Officer, Societe Generale Corporate & Investment Banking.

“We are happy to be the first client of Accenture Post-Trade Processing, a pioneering solution that sets a new industry standard for efficiency in securities post-trade processing, and which will enable us to deliver top quality services to our clients.”


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