Posts Tagged ‘Accenture’

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.”


Steeper proposed visa fees could cost employers $232 million

May 27th, 2013

New work-permit fees proposed in the Senate’s immigration bill mean companies such as Accenture, Infosys and Tata Consultancy Services that depend on employees from overseas would foot the bill for stepped-up border-­control measures.

The measure would double, to $4,825, the cost of H-1B visas for highly skilled employees from overseas. It also would expand the number of permits to as high as 180,000 from the current cap of 85,000 per year. For the top 20 companies that used the program last year, the new fees would have driven the cost of visas approved last year to $232.2 million, according to data compiled by Bloomberg.outsourcing15

The bill targets outsourcing companies where more than 50 percent of the workforce holds H-1B visas or L-1 visas for intra­company transfers, including Mumbai-based TCS and software firm Wipro. Those companies would have to pay an additional fee of $10,000 per visa in 2015 and would be restricted from having more than half of their staff members on visas by fiscal 2017.

The changes mean “the combined costs of hiring someone that is not an American citizen is real to the companies in question,’’ Sen. Lindsey O. Graham (R-S.C.) said May 21.

The Senate Judiciary Committee approved the legislation May 21. It includes border-
security enhancements that would be paid for partially through a new fee on H-1B visas and through surcharges on citizenship applications. The money would go into a trust fund to help buy drones to monitor the U.S.-Mexico border, to build more secure fencing and to hire more law enforcement personnel.

That part of the bill is designed to meet Republican lawmakers’ demands that any immigration legislation include measures to make it harder for undocumented workers to enter the country. The measure also includes a path to citizenship for an estimated 11 million undocumented immigrants who are in the United States.

Outsourcing companies have criticized the higher fees.

The bill “will impose arbitrary and onerous new penalties and costs that will threaten the competitiveness of U.S. businesses globally,’’ TCS spokesman Michael McCabe said in an interview.

Teaneck, N.J.-based Cognizant Technology Solutions, which provided back-office support and other services to companies, including JPMorgan Chase, Bank of America and Citigroup, said its business would be threatened by the legislative changes.

‘Detrimental’ fees

The higher fees and restrictions on employment visas “would be detrimental to Cognizant,’’ Gordon J. Coburn, president of Cognizant, said May 8 in an earnings call.

Cognizant was the top sponsor of H-1B visas in the fiscal year ended Sept. 30, receiving 9,336 new visas, according to U.S. Citizenship and Immigration Services data. The company declined a request to disclose the total number of U.S.-based employees holding H-1B visas.

“It’s not like our clients can go out and hire these people,’’ Coburn said. “These people don’t exist.’’

Under the Senate’s proposed fee structure, Dublin-based Accenture would have paid $10.1 million more in H-1B visa fees for fiscal 2012, according to data compiled by Bloomberg. Accenture spokeswoman Joanne Giordano declined to comment.

Immigration expenses for ­India-based outsourcing companies, including Infosys, Tata Consultancy Services and Wipro, would be up to 3.5 times as high if the Senate proposal became law, according to the data.

TCS, which was approved for 7,427 visas in 2012, would pay as much as $89.1 million annually to bring in the same number of foreign workers with technology skills.

Infosys would have paid an additional $67.5 million, and Wipro would have faced an additional $51.7 million bill for its visa applications.

That doesn’t include the estimated cost of renewing existing visas and legal fees that range from $1,000 to $3,000 per worker, according to the American Council on International Personnel, an Alexandria-based trade association for U.S. companies using overseas talent.

The Indian government has said fees on large H-1B employers discriminate against Indian companies and violate international trade rules. To pay for new drones and additional border patrol officers in a 2010 emergency border security law, Congress imposed a $2,000 fee on companies with more than 50 percent of their U.S. workforce on the visas. The Indian government said in May 2012 that it would consider challenging the fees in a trade case at the World Trade Organization.

The bill would increase penalties to as much as $10,000 per violation for companies that misrepresent facts in an application for an H-1B or L-1 visa.

Talent hunt

The boost in visa fees would be borne by companies that say they already face a shortage of engineers and information technology specialists.

The unemployment rate in the U.S. computer and mathematical occupations, which dominate H-1B visa applications, was 3.5 percent in the first three months of 2013, compared with the U.S. unemployment rate of 7.7 percent.

The American Council on International Personnel, the advocacy group, said it objects to using visa fees for security programs.

The group “supports ensuring our borders are properly secured, but we also believe that fees placed on compliant employers should be used to improve immigration services and U.S. competitiveness,’’ said Rebecca Peters, director and counsel for legislative affairs for the group, whose members include Intel and PricewaterhouseCoopers.

Some U.S. companies support higher fees to encourage students to pursue degrees in science and technology. Redmond, Wash.-based Microsoft proposed a $10,000 fee each for 20,000 additional H1-B visas in a report released in September 2012.

The committee agreed to create a fund to encourage science and technology education by levying a $1,000 fee on employers seeking to sponsor temporary workers for permanent residency.

Senate Majority Leader Harry M. Reid (D-Nev.) said he wants the legislation to be debated by his chamber next month. If the Senate passes the bill, it faces opposition from some House Republicans over the citizenship option.


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