Research

Publication Date: 28 December 2005 ID Number: G00136358

Vendor Rating: Accenture's Position and Presence

Continue to Grow
Frances Karamouzis, Lorrie Scardino, Christine Adams, Nicole France, Michele C. Caminos, Jim
Longwood, Rolf Jester, Jacqueline Heng, Minjoo Chon

The company is well-positioned to continue as a leader in the evolving IT service market.

It operates, however, in extremely competitive, fragmented markets that will test its
agility and ability to evolve.

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form without prior
written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable.
Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's
research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or
services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or
inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to
change without notice.
OVERALL RATING

Strong Positive

WHAT YOU NEED TO KNOW

Accenture is considered by many as a bellwether in IT services and "the one to watch." Although
it is not without challenges, it has amassed an impressive portfolio of offerings, it has expanded
its client roster, and it seeks to finalize its transition from private partnership to public company.
Because of its leadership position, however, it faces unique challenges to sustain its momentum,
adapt to market changes and keep investors happy.

VENDOR RATING

Analyst Comments
Accenture is viewed as a thought leader and a formidable force in the IT service market. It has
built critical mass and achieved dominant positions in industry and service lines across the globe,
which makes it an important service provider to watch.

Detailed Rating
Initiative Rating
Corporate Viability
Strategy Strong Positive
Americas Strong Positive
EMEA Positive
Asia/Pacific Strong Positive
Verticalization Strong Positive
Global Delivery Model Positive
Financial Positive
Marketing Strong Positive
Branding Strong Positive
Go to Market Strong Positive
Organization Strong Positive
Market Offerings
Product/Service Strong Positive
Strategy and/or Business Consulting Strong Positive
Systems Integration Strong Positive
Enterprise Application Services Strong Positive
Business Process Outsourcing Positive
Application Outsourcing Positive
Infrastructure Promising
Technology/Methodology Positive

Publication Date: 28 December 2005/ID Number: G00136358 Page 2 of 9

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
 Pricing Structure Positive
Customer Service/Support
Sales/Distribution Positive
Support/Account Management Strong Positive

Corporate Viability
Strategy: Accenture has operated for two decades (previously as Andersen Consulting) as a
leading provider of consulting, systems integration (with a renewed focus on application
outsourcing) and business process outsourcing (BPO) services. Accenture has an estimated
123,000 employees (including approximately 4,000 partners) operating out of 110 offices in 47
countries. Its 2005 fiscal-year revenue was $15.55 billion.
Accenture's target market comprises leading Global 1,000 companies and public-sector clients.
Similar to other competitors, Accenture is focused on growing its business with profitable
engagements in targeted industries across geographic markets. In addition, Accenture is
concentrating on winning specific kinds of business that will give it a rich client set, with
challenging business problems that add to its core intellectual property.
Accenture competes across the Americas, Europe, the Middle East and Africa (EMEA) and the
Asia/Pacific region. Global locations are selected based on market size and potential for profit.
One of the important achievements in Accenture's global penetration is the consistency of
Accenture's brand promise and reputation around the world. Accenture does not have critical
mass or a dominating position in all areas. However, when all of the macro factors are taken
together, it is fair to say that, within each major region, Accenture is an important service provider
to watch, and one that clients often consider a strong option for professional services.
Americas: About 43 percent of Accenture's net revenue (FY05) comes from the Americas, and it
sets the stage for its market presence in one of the largest commercial and public center markets.
Accenture is a strong candidate for large, complex clients that require extensive depth and
breadth. However, the large volume of basic consulting and outsourcing deals is the mainstay of
success in the Americas market and, in this arena, Accenture is challenged to continually
compete against all of the transitional market forces (such as the use of offshore and utility
solutions).
EMEA: About 50 percent of Accenture's net revenue (FY05) comes from EMEA, making it among
the top 10 external service providers (ESPs) in EMEA, as well as a thought leader. But Accenture
also faces some challenges:

• Notable contract terminations

• EMEA-specific market demands that require ESPs to credibly localize in key individual
markets

• Dynamically adapting to major economic shifts and industry consolidations

Asia/Pacific: About 7 percent of Accenture's net revenue (FY05) comes from the Asia/Pacific
region. Accenture is a strong player across Asia/Pacific and Japan. Accenture has competed
successfully in its target vertical industries for consulting, systems integration and outsourcing. Its
strategy for continued growth, centered on China, India and Japan, has proved effective.

Publication Date: 28 December 2005/ID Number: G00136358 Page 3 of 9

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
The application outsourcing business is healthy and should contribute to growth. In BPO,
Accenture has been winning smaller deals and some larger cornerstone contracts in what is still
an emerging sector in this region.
The company also is using innovative partnering models that are often required in this part of the
world and is taking advantage of lower-cost delivery locations, such as China, to serve Asian and
global clients.
Accenture's main challenges in the region are:

• Sustaining workforce growth at a sufficient quality level and reasonable cost, particularly
in China.

• Dealing with competition from other players in the more-mature markets. Accenture is
investing in strong industry-experienced partners and client relationships to meet this
challenge.

• Although it is successful and growing in Japan, like all multinationals, it must penetrate
that market much further. Its Japan strategy looks sound and should help it to capitalize
on the recovery and economic reforms in that country.
Verticalization: Accenture's vertical-industry penetration, as defined by revenue, includes 26
percent from communications and high technology, 22 percent from financial services, 23 percent
from products, 15 percent from resources and 14 percent from government. Accenture's industry
program continues to be one of the strongest in the market and provides the foundation for its
approach to strategic account planning, sales and overall delivery model. As a result, there is a
great deal of intellectual capital and best practices brought to bear through the industry program.
The ongoing challenge is to achieve and sustain critical mass of industry expertise across
geographies to maintain a leadership position.
Global Delivery Model: The use of a global delivery model (the combination of on-site, onshore,
nearshore and offshore resources) has proved to be a minimum-level requirement for bidding on
certain types of systems integration and outsourcing deals. As a result, traditional providers such
as Accenture needed to quickly establish a certain level of competitive parity with the growing
group of offshore pure-play providers, particularly the Indian service providers.
Accenture has been able to establish itself in key locations, such as India, China, the Philippines,
Spain and the Czech Republic, to compete effectively. However, Accenture still needs to continue
to build on its methodology, it human resource pool and its overall credibility with clients with
regard to consistent, high-quality execution of the global delivery model standard set by Indian
providers.
Financial: The critical measure used by Gartner to analyze the financial rating is driven by clients
who typically look at financial viability as part of overall company viability during the evaluation
and selection process or annual assessment. Gartner studies consistently indicate that clients
focus on a service provider's financial health to ensure that it has a certain level of stability. This
stability is determined on a comfort level, based on confidence that the provider will be in
business for the life of the deal, and will be able to invest in growing competencies and
intellectual property that will benefit the engagement. Using this client-defined barometer,
Accenture exceeds client expectations because it has a long, stable history with consistent, solid
financial performance.
Since Accenture went public in 2001, its growth and pipeline have been scrutinized quarterly.
During this time, the company has demonstrated steady growth with a balanced portfolio of
contracts. As a result, it is not overexposed in any one engagement or portfolio of accounts, and
has had no significant warning signs of financial issues. Accenture will be challenged, however, to

Publication Date: 28 December 2005/ID Number: G00136358 Page 4 of 9

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
focus on profits as it continues to grow its outsourcing business. The financial engineering of
outsourcing deals varies dramatically from Accenture's consulting heritage of project-based work.
Marketing: Accenture's overall marketing strategy and execution are strong, consisting of a
rigorous, targeted focus by industry that is well-thought-out, with client segmentation by service
line. Accenture has a clear understanding of its overall strengths, its channel influence and what it
takes to market to its targeted buyers.
Branding: Nearly five years ago, Accenture re-branded, including adopting a new name. This
initiative is still held as an IT services industry standard that many competitors often benchmark
against. In short, the execution of this re-branding was very successful. Accenture demonstrated
strong execution across the globe and demonstrated consistency and unification of its brand
across the organization. Currently, the Accenture brand is clearly established as leader in global
IT services across the three major geographic markets (Americas, EMEA and Asia/Pacific) as
well as in a number of industry sectors and service categories. Moreover, Accenture is a well-
known brand that is not just limited to the professional-services industry.
Go to market: Accenture has a mature organization that combines enterprisewide go-to-market
strategies as well as targeted efforts for industry teams, service categories and geographic
regions. The core activities we would expect to see in professional services — investment in
building thought leadership, visibility in key industry and professional organizations, strong public
relations and analyst relations, and community/relationship marketing — are well in place. Like its
key competitors, Accenture publishes topical research, books, targeted studies and other thought
pieces designed to showcase the firm's expertise and thought leadership. In addition, Accenture
leads a number of research and policy organizations and is constantly sought after as a source of
subject matter expertise. Specific initiatives include the Accenture Institute for High Performance
Business and Accenture Technology Labs. The firm is also a strategic partner to the World
Economic Forum.
Organization: Accenture's strong organizational structure is a foundation of its success. As with
many large companies, Accenture periodically recalibrates its subunits and reporting structure, in
response to market demands or new technologies. Although Accenture has periodically
reorganized some of its internal subunits, it has not done a major, companywide reorganization
for a considerable period of time. This stability has helped Accenture stay focused on the external
market.
One of Accenture's organizational challenges is its management decision-making process. It has
approximately 4,000 partners worldwide that want to have a voice in the company's direction, but
it is also a public company with a corporate structure that is operationally different from its prior
limited partner structure.

Market Offerings
Accenture offers a broad range of consulting, systems integration and outsourcing services. Its
global model for its market offerings is premised on a "global matrix," where the company goes to
market through industry groups and delivers content with service-line functional capabilities
across many geographies.
Prospective clients must assess if their needs match Accenture's core competency — high-value
relationships where industry experience can be effectively applied to solutions. Utility
relationships focused on cost savings or IT efficiency are not Accenture's core competency (see
"Accenture's Market Offerings Demonstrate Range and Depth").
Business Consulting: Accenture's business process expertise is rooted in its vertical-industry
practices and also within five functionally focused service lines that are part of its Business

Publication Date: 28 December 2005/ID Number: G00136358 Page 5 of 9

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Consulting group. Leading messages within these offerings are "high performance" and
"business transformation" — helping clients identify and execute on significant business change
to improve performance. Business transformation work is an area where Accenture focuses on
differentiating its strategy, approach and impact on the client. The market issue is that not all work
is or needs to be transformational. Enterprise clients considering Accenture for business
transformation relationships must make concrete business outcomes and performance goals the
cornerstone of the engagements.
Systems Integration: This is the original foundation of Accenture's business. It accounts for a
substantial portion of its revenue and cuts across a large number of the practice teams. It is an
area where Accenture continues to be strong but faces some of the largest threats from
competitors in terms of specific technical focus, new solutions and delivery models involving
lower-cost resources, and an overall fragmented market.
Enterprise Application Service: Gartner's 2005 Magic Quadrant analyses place Accenture in the
Leaders quadrant for its various solutions, including enterprise resource planning (ERP),
customer relationship management (CRM) and supply chain management (SCM). It is clear that
Accenture is getting its share of deals; however, here again, the level of focused competition
continues to intensify, requiring Accenture to deliver at an optimized level and demonstrate value
for any type of premium pricing.
BPO: Accenture views BPO as one of its most important areas for future growth and is focused
on investing to position itself as one of the premier providers for its targeted segments. Accenture
is promoting its transformation work as particularly relevant to BPO, predicated on its ability and
depth to bundle consulting with outsourcing.
Thus far, there have been notable wins for Accenture as well as struggles in delivery of business
outcomes within specific deals. For its chosen targets, it has established an appropriate level of
"mind share"; thus, clients consistently include Accenture as a strong candidate for consideration
in deals. Its market presence, combined with its investment and focus, will continue to make it a
force in the market.
Application Outsourcing: Accenture has built a solid set of offerings and is often considered a
viable option for many of the selective application outsourcing engagements or as a full-service
application outsourcer. One clear priority is parlaying its size and strength to win large bundled
outsourcing deals that incorporate consulting and/or other service categories, such as BPO or
infrastructure. It faces strong competition from IBM and Indian competitors, as well as from
several focused providers (see "User Guide for Making Application Outsourcing Provider
Choices").
Infrastructure: Accenture historically has not pursued infrastructure as a distinct service area but
recently has embarked on a focused offering. Currently, its infrastructure practice is no match for
the depth, breadth and maturity of large, established providers (that is, IBM, EDS or CSC). Rather
than trying to catch up or replicate these ESPs, Accenture has chosen to establish a selective set
of infrastructure offerings focusing on design and architecture work in the consultative model and
infrastructure outsourcing components where they are part of a bundled application outsourcing
or BPO deal. Thus far, it is a small practice area within Accenture, but it is important to its long-
term strategy. It has achieved good results and has a long road ahead.
Technology/Methodology: One of Accenture's hallmarks in the 1980s and 1990s was its
rigorous approach to methodologies and toolsets, supported by intense training. As Accenture
has grown and diversified, however, it has become a bit complacent. Smaller, nimble competitors
(that is, ESPs from India) have exploited this gap and have reset the bar. Accenture recently re-
emphasized its investment and rigor. Accenture's methods and tools have not yet reached the

Publication Date: 28 December 2005/ID Number: G00136358 Page 6 of 9

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
level of consistency and maturity of the Indian ESPs, but it is leading its traditional competitors,
such as Deloitte and BearingPoint, in this area.
Pricing Structure: Accenture's pricing focuses on the value delivered. Where possible, it
supports this pricing scheme with business metrics and tangible evidence that it has delivered
material impact for clients. Many buyers of IT services, however, view Accenture as a premium-
priced provider relative to competitors. Despite this perception, Accenture continues to win
engagements and has competed in price-sensitive engagements where global delivery is a
requirement. Accenture has grown its global delivery network and has achieved competitive parity
for the key offshore price points that clients demand.

Customer Service/Support
Sales and Distribution: Accenture relies primarily on its practitioners (principally line partners) to
drive sales, rather than a separate sales force. Overall, the model of using practitioners as the
main sales force has proved to be an important self-regulating mechanism against the
overpromising and underdelivering that can undermine a service provider's ability to achieve the
targets and goals that link directly to compensation and rewards. In addition, Accenture's
approach allows for seamless transition from sales to delivery, because the same team is
engaged in both aspects. As part of that seamlessness, there is no "second guessing" about what
was proposed vs. what is being delivered. In addition, the continuity of relationships provides
many upsell and cross-sell opportunities.
In addition, Accenture's influence within the overall channel (for technology products) makes it a
coveted alliance partner, which also helps drive sales efforts. Accenture was one of the first
global consultancies to establish a formal, robust and highly detailed tiered alliance methodology.
This structure continues to significantly boost Accenture's sales into the market.
Account Management: Accenture's strength in account management and its focus on cultivating
relationships at the highest level of client organizations is an important contributor to Accenture's
success. This success is demonstrated by repeat business: As of fiscal-year 2005, 96 of
Accenture's top 100 clients (based on revenue) have been clients for at least five years, and 83
have been clients for at least 10 years.

RECOMMENDED READING

"Big Accenture Investment Shows Important IT Services Shift"

"Capgemini Sells North American Healthcare Practice to Accenture"
"Magic Quadrant for North American ERP Service Providers, 2005"
"Magic Quadrant for North American CRM Service Providers, 2005"
"Magic Quadrant for European CRM Service Providers, 2005"
"Magic Quadrant for North American SCM Consulting and Integration Service Providers, 2005"
"Competitive Landscape for Offshore Application Services"
"The Impact of Offshore Sourcing on ESPs"
"External Service Providers' SOA Frameworks and Offerings: Accenture"
"Alnova Finds Success With Banks Favoring Customized Systems"
"User Guide for Making Application Outsourcing Provider Choices"

Publication Date: 28 December 2005/ID Number: G00136358 Page 7 of 9

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
"Market Overview: IT Outsourcing Service Providers in Asia/Pacific, 2004"
"Market Overview: Consulting and Systems Integration Service Providers in Asia/Pacific, 2004"

Company Information
Accenture
Headquarters: New York, New York
www.accenture.com

Acronym Key
BPO business process outsourcing
CRM customer relationship management
EMEA Europe, the Middle East and Africa
ERP enterprise resource planning
ESP external service provider
SCM supply chain management

Ratings Definitions
Strong Solid provider of strategic products, services or solutions.
Positive • Customers: Continue investments.
• Potential customers: Consider this vendor a strong strategic choice.
Positive Demonstrates strength in specific areas, but is largely opportunistic.
• Customers: Continue incremental investments.
• Potential customers: Put this vendor on a short list of tactical alternatives.
Promising Shows potential in specific areas; however, initiative or vendor has not fully evolved or
matured.
• Customers: Watch for a change in status and consider scenarios for short- and long-term
impact.
• Potential customers: Plan for and be aware of issues and opportunities related to the
evolution and maturity of this initiative or vendor.
Caution Faces challenges in one or more areas.
• Customers: Understand challenges in relevant areas; assess short and long term
benefit/risk to determine if contingency plans are needed.
• Potential customers: Note the vendor's challenges as part of due diligence.
Strong Difficulty responding to problems in multiple areas.
Negative • Customers: Exit immediately.
• Potential customers: Consider this vendor only if there are no alternatives.

Publication Date: 28 December 2005/ID Number: G00136358 Page 8 of 9

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
REGIONAL HEADQUARTERS

Corporate Headquarters
56 Top Gallant Road
Stamford, CT 06902-7700
U.S.A.
+1 203 964 0096

European Headquarters
Tamesis
The Glanty
Egham
Surrey, TW20 9AW
UNITED KINGDOM
+44 1784 431611

Asia/Pacific Headquarters
Gartner Australasia Pty. Ltd.
Level 9, 141 Walker Street
North Sydney
New South Wales 2060
AUSTRALIA
+61 2 9459 4600

Japan Headquarters
Gartner Japan Ltd.
Aobadai Hills, 6F
7-7, Aobadai, 4-chome
Meguro-ku, Tokyo 153-0042
JAPAN
+81 3 3481 3670

Latin America Headquarters

Gartner do Brazil
Av. das Nações Unidas, 12551
9° andar—World Trade Center
04578-903—São Paulo SP
BRAZIL
+55 11 3443 1509

Publication Date: 28 December 2005/ID Number: G00136358 Page 9 of 9

© 2005 Gartner, Inc. and/or its Affiliates. All Rights Reserved.