COMPANY PROFILE

Accenture plc

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PUBLICATION DATE: 19 Sep 2014
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Accenture plc
TABLE OF CONTENTS

TABLE OF CONTENTS
Company Overview..............................................................................................3
Key Facts...............................................................................................................3
SWOT Analysis.....................................................................................................4

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Accenture plc
Company Overview

COMPANY OVERVIEW
Accenture plc (Accenture or the company) is a global management consulting, technology and
outsourcing company. The company provides services to its customers through a global delivery
network of over 50 centers. It mainly operates in the Americas and Europe, Middle East and Africa
(EMEA). The company is headquartered in Dublin, Ireland and employed approximately 275,000
people as on August 31, 2013.
The company recorded revenues of $28,562.8 million during the financial year ended August 2013
(FY2013), an increase of 2.5% over FY2012. The operating profit of the company was $4,338.7
million in FY2013, an increase of 12.1% over FY2012. The net profit was $3,281.9 million in FY2013,
an increase of 28.5% over FY2012.

KEY FACTS
Head Office

Accenture plc
1 Grand Canal Square
Grand Canal Harbour
Dublin 2
IRL

Phone

353 1 646 2000

Fax

353 1 646 2020

Web Address

http://www.accenture.com

Revenue / turnover 28,562.8

(USD Mn)
Financial Year End

August

Employees

275,000

New York Ticker

ACN

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SWOT Analysis

SWOT ANALYSIS
Accenture plc (Accenture or the company) is one of the worlds leading organizations providing
management consulting, technology and outsourcing services. The companys large scale and scope
of operations equip it with competitive advantages and there by provide favorable competitive
environment. However, volatile and uncertain economic conditions may adversely affect the companys
operations.
Strengths

Weaknesses

Large scale of operations

Strong client relationships
Robust alliances network

Consulting business to remain weak

Accenture lags peers in adding incremental
revenues

Opportunities

Threats

Growing demand for enterprise mobility

Increased adoption of cloud computing
services
Strategic acquisitions further strengthen
Accentures market position

Volatile and uncertain economic conditions

Negative trends in the outsourcing business
Revenues may be adversely affected by
currency exchange-rate fluctuations

Strengths

Large scale of operations

Accenture enjoys significant scale and is diversified across industries and geographies while at the
same time offering integrated services. Over the last few years, Accenture has strategically expanded
the number of end markets to increase revenue and business stability and expand its opportunities
for growth. The company offers IT services for diversified end markets, including aerospace and
defense, agribusiness, airlines, automotive, banking, building materials, capital markets, chemicals,
communications, consumer goods and services, customs, electronics and high tech, energy, forest
products, freight and logistics, healthcare, industrial equipment, insurance, life sciences, media and
entertainment, public safety, utilities, retail, metals and mining, and other sectors. In addition,
Accenture has a diversified geographic presence. The company has strategically expanded its
presence across the globe. It has operations in over 200 cities in 56 countries worldwide. During
FY2013 the company generated approximately 47.3% of its total revenues from Americas, while
EMEA accounted for 38.7% and Asia Pacific accounted for 14%. In addition, its geographic expansion
strategy focuses both on emerging and mature markets providing significant growth potential for the
company. Accenture has increased focus on emerging markets such as Association of Southeast

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Asian Nations (ASEAN) countries, Brazil, China, India, Mexico, the Middle East, Russia, South
Africa, South Korea and Turkey.
The company has one of the broadest offerings in management consulting, technology services and
outsourcing markets. It caters to 19 industry groups, under its five operating groups: products,
financial services, communications, media and technology, resources, and health and public service.
The company also offers a range of management consulting services. The company offers clients
across all industries a variety of BPO services for specific business functions and/or processes,
including finance and accounting, human resources, learning and procurement, among others. The
company also offers specialized BPO services to clients in specific industries. Accentures technology
platform includes three service areas: systems integration consulting, technology consulting and
technology outsourcing.
Accenture enjoys scope and scale that allows for significant competitive advantages. The company
will be able to serve clients that operate globally and at a large scale as such businesses will need
technology partners that can match the scale. For instance, resources that are required to execute
a large systems integration project is within reach of very few companies, one among them being
Accenture. The companys ability to operate at a certain scale provides favorable competitive
environment and pricing power. Accenture is further positioned as a one stop shop which provides
cross selling opportunities.
In FY2013, the company benefitted from these competitive advantages as it continued to witness
strong demand for large-scale, transformational projects, generating quarterly bookings of more
than $100 million from just 44 clients. According to Accenture, its global scope and scale made it a
partner of choice for many of the largest companies in the world. Further, diversified end markets
and geographic reach avoid dependence on any single market for revenues. Furthermore, they offer
access to a wider customer base and enable continued growth resulting in a strong revenue position
for the company.
Strong client relationships
Accenture enjoys strong client relationship. The company enjoys strong and lasting relationships
with many of the worlds leading companies, including more than three-quarters of the Fortune Global
500. Further, of the 100 largest clients in FY2013, 91 have been clients for at least 10 years. This
indicates that the company enjoys high switching costs. As such long relationship indicates that
Accentures consultants are well versed with the clients business and therefore the clients will have
to incur high switching costs. The client relationships are also a testimony to the companys ability
to retain its customers and to the favorable competitive position that it enjoys. These client
relationships will also enhance the companys ability to win new business as it has a roster of valuable
client references,
Robust alliances network
Accenture developed a robust network of alliances. The company works closely with some of the
technology market leaders that complement and extend its solutions and capabilities. Accenture

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has alliances with leading technology companies such as Alcatel Lucent, BMC, Cisco Systems, Dell,
EMC, Hewlett-Packard, IBM Hardware and Software Technology, JDA, Microsoft, NetApp, Oracle,
Red Hat, Salesforce.com, SAP, SAS, Siemens, Sybase, Symantec, Telstra, Thomson Reuters,
TIBCO, and VMware. The strong alliance network allowed Accenture to deliver innovative and
collaborative solutions by bringing together various technology teams. Alliances with leading
technology companies have allowed the company to cater to broad and varied needs of its clients.
Moreover, the company also maintains partnerships with other technology companies, including,
Acxiom, Aprimo, Apriso, Ariba, Asset Control, CallidusCloud, Citrix Systems, Cognos, Daon, Epitome
Systems, ESRI, GemStone Systems, Genesys, IDS Scheer, Informatica, KXEN, Management
Controls, MicroStrategy, Murex, NetSuite, Pegasystems, SmartStream, Sterling Commerce, Teradata,
Trillium Software, Verizon Business, Wall Street Systems, Workday, and World Economic Forum,
among others. The strong network of alliances has allowed Accenture to create significant and
sustainable value to its customers. A robust alliances network equips Accenture with the ability to
serve a diverse base of clients.

Weaknesses

Consulting business to remain weak

Accentures consulting business has been witnessing declines and remains sluggish. The companys
consulting revenues fell by about 1% to $15.4 billion in FY2013. The consulting business, which
contributes to more than half of the company's revenue, has been declining as customers cut
discretionary spending and fierce competition puts pressure on contract prices. During FY2013,
consulting growth was sluggish and this trend is likely to continue in the short term. According to
industry estimates, the companys revenue from consulting will be flat or grow in the low-single digits
in FY2014. Consequently, sluggish growth and declines in the consulting business will impact the
companys overall growth prospects. Therefore, consulting business could prove to be a drag on
the companys growth prospects.
Accenture lags peers in adding incremental revenues
Accenture lags some of its peers, who have significant presence in offshore regions such as India,
in gaining incremental revenues. In FY2013, TCS added incremental revenues of $2,579.5 million
while Accentures incremental revenues before reimbursements were $616 million. Barring the year
2011 when Accenture added about $4,259 million of incremental revenues, the total incremental
revenues added by TCS for the years 2010, 2012 and 2013 were $5,102.2 million while barring 2011
Accenture added a total of $2,964 million for the same years. Accenture faces tough competition
from peers who operate predominantly in low cost region. The pace at which TCS is adding revenues
could indicate competitive disadvantage for Accenture among changing industry dynamics where
IT outsourcing/consulting decisions are tending towards price sensitivity.

Opportunities

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SWOT Analysis

Growing demand for enterprise mobility

The market for enterprise mobility solutions has been growing at a rapid pace. Increasing mobile
worker population, emergence of sophisticated mobile devices such as tablets and smartphones
and introduction of several business applications is expected to drive the market for enterprise
mobility over the next few years. According to industry estimates, the market for enterprise mobility
solutions is expected to exceed approximately $174 billion by 2017.
The company has been increasing its focus on developing enterprise mobility solutions in recent
times. The company offers mobility solutions by industry, mobility consulting, mobility applications,
mobility managed services and connected devices engineering services which cater to the growing
demand for enterprise mobility. Further, in the rapidly growing tablet market, Accentures enterprise
mobile device enablement offering includes customizations for Android applications together with
multiplatform managed services and targeted app creation to provide an enterprise-capable solution
for corporate customers. Also, in the same month, the company established a global strategic
relationship with Samsung Electronics in which the two companies will work together to ease the
procurement and implementation processes for clients adopting enterprise mobility tools, as they
undergo the transformation to becoming digital businesses. Further, in April 2014, Accenture and
Crittercism, a company engaged in mobile application performance management (mAPM), entered
into an alliance agreement to address the challenges enterprises face when developing and
implementing their mobile application strategies.
The positive outlook for the enterprise mobility solutions and the company's increased focus on this
business will allow it to gain more customers and market share in coming years.
Increased adoption of cloud computing services
The worldwide demand for cloud computing services is expected to record strong growth in the
coming years. Cloud computing is a computing infrastructure model, which enables delivery of
software-as-a-service (SaaS). The appeal of cloud computing has been increasing as it enables
companies to reduce expenses such as upfront royalty or licensing payments, investment in hardware
infrastructure and other operating expenses. Consequently, the demand for cloud computing services
has been increasing and is expected to grow rapidly and cross $241 billion by 2020. In addition,
public cloud services market is forecast to grow at a CAGR of 23.5% during 2013-17. The market
is expected to be driven by smartphones, tablets and high-speed internet access demand.
The company is well positioned to take advantage of this rapidly growing demand for cloud computing
services. In March 2014, Accenture and SAP created a new business group focused on accelerating
the time it takes to jointly develop and deliver new industry-specific solutions based on cloud and
other digital technologies. Moreover, in the following month, Accenture and Orange Business Services,
a major communications service provider that offers cloud infrastructure services, formed an alliance
to support large enterprises with their cloud strategy and the transformation of their infrastructure
and applications to cloud-based models. This alliance will begin by targeting French businesses
before approaching companies in other European countries where Accenture does not have existing

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SWOT Analysis

alliances with other providers. In this way Accenture will be expanding its geographical footprint in
the global cloud computing market.
Robust outlook for the cloud computing market and Accentures significant presence in this market
will provide it with opportunities to expand its client base and market share in coming years.
Strategic acquisitions further strengthen Accentures market position
Accenture made few significant acquisitions in recent times. In FY2013, the company made more
than $800 million in acquisitions, including three in digital marketingAcquity, Fjord and
avVentawhich significantly increased Accenture Interactives ability to provide chief marketing
officers with integrated solutions to improve their marketing performance. The company is focused
on strengthening its presence in fast growth markets through strategic acquisitions. In March 2014,
Accenture acquired the industrial and embedded software development and services business of
evopro, a software development and engineering services company headquartered in Budapest.
This acquisition is expected to enhance Accentures ability to help industrial companies maximize
the return on their investment in industrial software and automation by strengthening Accentures
software development skills. The acquisition will also support Accentures digital initiatives. Prior to
this, in February 2014, the company acquired ClientHouse, an independent provider of salesforce.com
and Veeva Systems solutions based in Jena, Germany. The acquisition is expected to strengthen
Accentures position as a leading global provider of Salesforce implementation services and as a
global leader in SaaS implementations. Previously, in December 2013, the company acquired
Procurian, a leading provider of procurement business process solutions. The acquisition is expected
to enhance Accentures capabilities in BPO procurement across a range of industries including
manufacturing, consumer goods, high-tech and financial services, and adds key analytics capabilities
and technology assets.
Such strategic acquisitions will further strengthen the companys market position in the provision of
management consulting, technology services and outsourcing services to a diverse range of clients.

Threats

Volatile and uncertain economic conditions

The companys results of operations are affected by economic conditions, including macroeconomic
conditions, credit market conditions and levels of business confidence. There continues to be
significant volatility in markets around the world, as well as economic and geopolitical uncertainty
in many of the markets where Accenture operates, which could impact its business, particularly in
the US and Europe. For instance, revenue growth in local currency during FY2013 was lower than
expected due, in large part, to lower than expected demand, particularly in certain geographies
experiencing challenging macroeconomic conditions, such as certain countries in Europe and in
Brazil. Such volatility and uncertainty has adversely affected and will in the future affect the companys
clients and the levels of business activities in some industries and geographies where the company

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SWOT Analysis

operates, which may reduce demand for its services. This has also impacted the types of services
that clients are demanding; for example, clients are requesting a higher volume of outsourcing
services and placing a greater emphasis on cost savings initiatives.These changing demand patterns
could have a material adverse effect on Accentures new contract bookings and results of operations.
Negative trends in the outsourcing business
The companys outsourcing business faces significant challenges. Firstly, the average bill rate of
technology and business outsourcing have declined considerably over 10% since 2006 and especially
the bill rates were further pressurized post-recession when the businesses continued to prefer
cheaper outsourcing deals. Rapid competition from low cost offshore regions such as India further
pushed down the bill rates. These trends indicate that the outsourcing business margins will be
pressurized in the near future.
Revenues may be adversely affected by currency exchange-rate fluctuations
Being a global company, Accentures revenues are denominated in multiple currencies and may be
significantly affected by currency exchange-rate fluctuations. If the US dollar weakens against other
currencies, resulting in favorable currency translation, the companys revenues and revenue growth
in the US dollars may be higher. If the US dollar strengthens against other currencies, resulting in
unfavorable currency translation, the companys revenues and revenue growth in US dollars may
be lower. When compared to FY2012 the US dollar strengthened against many currencies during
FY2013. This resulted in unfavorable currency translation and the US dollar revenue results were
approximately 2% lower than the revenue result in local currency. Thus, currency exchange-rate
fluctuations may negatively impact the revenues of the company.

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