Worldwide | 2017 ACCENTURE - VENDOR PROFILE - WORLDWIDE SITSI I Vendor Analysis I Vendor Profile SITSI | Vendor Analysis | Vendor Profile | Accenture | Worldwide | 2017 2 TABLE OF CONTENTS LIST OF FIGURES 3 DOCUMENT INFORMATION 3 PAC'S ANALYSIS 4 PAC's Opinion 4 Strategy Review 6 SWOT Analysis 8 Positioning in PAC's 2015 Software Rankings - Worldwide/by country 10 Positioning in PAC's 2015 IT Services Rankings – Worldwide/by country 11 Main Changes 2015 / 2017 13 Hot News 17 ACTIVITIES ANALYSIS 18 Analysis of Products & Services 18 Analysis by Vertical Expertise 22 Top Accounts 23 Latest Deals & Projects 24 Mergers & Acquisitions 29 PERFORMANCE ANALYSIS 32 Financial Record 32 Breakdown of Worldwide Revenue 33 Breakdown of Worldwide SITS Revenue by Market Segments 34 Breakdown of Worldwide SITS Revenue by Vertical Sectors 35 Performance Review 36 GENERAL PRESENTATION 37 General Information 37 Brief Description 37 Business Organization 38 ABOUT PIERRE AUDOIN CONSULTANTS 39 SITSI | Vendor Analysis | Vendor Profile | Accenture | Worldwide | 2017 3 LIST OF FIGURES Horizontal Expertise of Accenture 18 Software Product Portfolio of Accenture 19 IT Services Portfolio of Accenture 20 Vertical Expertise of Accenture 22 Financials (as reported) 32 Total Revenue by Segments (PAC estimates) 33 Total SITS Revenue by Segments - Shares and Growth Rates (PAC estimates) 34 Total SITS Revenue by Vertical Sectors - Shares and Growth Rates (PAC estimates) 35 Business Structure of Accenture 38 DOCUMENT INFORMATION Authors: Katharina Grimme ([email protected]) Quality check: Nick Mayes ([email protected]) Modification date: 1.08.2017 Scope ID: Worldwide | 2017 Portfolio ID: SITSI I Vendor Analysis I Vendor Profile SITSI | Vendor Analysis | Vendor Profile | Accenture | Worldwide | 2017 4 PAC'S ANALYSIS PAC's Opinion Accenture, with its end-to-end consulting and service approach and its strong innovation capability, is a clear leader in the IT services market – and is considered by many of its peers as the benchmark and model for the industry. It is one of few truly global players in terms of coverage of industry, process, services, and geography. The company's comprehensive portfolio comprises strategy consulting, management and technology consulting, digital services, systems integration, application and infrastructure management services, cloud services as well as business process operations services. With this native, integrated consulting & IT services model, combining strong vertical, process and IT skills, as well as management consulting and digital agency capabilities, Accenture has kept its premium status despite the impact of industrialization and global sourcing. While most other major IT service providers have suffered at the hands of the Indian competition, Accenture has used the global delivery model very aggressively to boost both growth and profitability. The company has a stable management team and has delivered sustained strong growth – well above market rate – in recent years. It also has a superior operating margin compared to key competitors (e.g. higher than Capgemini, though below the Indian vendors), and its market valuation underlines its popularity with the stock market. A key success factor for Accenture is that permanent reinvention and transformation are part of the company's DNA, with the ability to reposition around any hot topic. It has the remarkable ability to develop in new, innovative topics (C&SI, end-to-end models) while keeping growing in legacy modernization (AM & BPO) and making this business profitable (industrialization & global sourcing). Over the past 4-5 years, Accenture has fully embraced the move to "digital". Accenture perceives that large companies – the Global 2000, its key target client base – are moving to digital in a significant way: moving from becoming digitally disrupted to becoming disruptors in their own right, by incorporating digital strategy, digital transformation and digital technology in innovative ways and driving disruption in their industry and in others. Consequently, for Accenture, digital transformation has become the core strategic priority. As one of the first among its peers, Accenture formed a "digital" business unit (Accenture Digital) in December 2013, comprising capabilities in CX, mobility, IoT and analytics, and it has since revamped its complete portfolio (across all business units) to serve the digital transformation journey. In line with latest technology developments, Accenture is currently also focusing strongly on robotics, cloud, security, blockchain and artificial intelligence. Applications-related services make up almost half of Accenture's revenue. The company positions itself as an end-to-end applications lifecycle partner, covering all aspects of a project from design through development, SITSI | Vendor Analysis | Vendor Profile | Accenture | Worldwide | 2017 5 operations and retirement. This is delivered primarily through the Accenture Technology business unit, which has strong alliances with leading business applications providers (SAP, Oracle, Microsoft, Salesforce and many others). While traditional AM is still a key part of the business, Accenture is focusing here also on "rotating to the new", i.e. helping clients to migrate legacy application workloads to new, more flexible and scalable applications, based on cloud platforms, automation, Agile and DevOps. This has implications also for the delivery model: while the focus has in the past been on offshore delivery, there is now more demand for local delivery as well as nearshore expansion. A key aspect of Accenture's go-to-market strategy is its focus on a limited number of (large) clients (Accenture claims that it is serving more than three-quarters of the FORTUNE Global 500 and 94 of the top 100). This strategy ensures a very high level of customer intimacy, aiming to achieve a maximum share of wallet within the customer organization. Accenture has the ability to cover both innovation added value (combining in- depth vertical and process expertise) and commodity/legacy transformation (thanks to industrialization and a global delivery model), generating cost savings to finance new projects. Within the organization, Accenture is continuously striving to have the right balance between autonomy (different cultures, approaches) and synergies (bringing all resources together) for end-to-end deals. Key challenges for Accenture will be to reinforce (onshore) strategy consulting capabilities (for digital and IoT transformation projects industrialization has its limits) and to manage the automation challenges on the resources pyramid. For Accenture, attracting and retaining top talent for a diversified workforce, in the midst of an increasingly fierce war for talent, will be a major growth challenge. To address this, large-scale (re-)training initiatives are under way to ensure that the workforce is up-to-date on digital topics. But Accenture also works on "digitized" career development, enabling "anytime, anywhere" feedback and employee involvement to create an environment for employees to continuously learn and grow. Its highly aggressive acquisition strategy will continue to play a key part in the growth strategy. In the first half of its FY 2017, Accenture already invested some $800m in M&A, mostly in the “new”, i.e.digital-, cloud-, or security-related services, to expand "digital agency" capabilities (e.g. The Monkeys, Maud, SinnerSchrader, Karmarama, MobGen), but also in some specific vertical domains (e.g. dgroup and Kurt Salmon for retail; Davies Consulting for utility) or technology expertise (e.g. Focus Group Europe, SolidserVision and NashCo for ServiceNow capability, DayNine for Workday capability). Its ability to fuse these acquisitions into the group without disrupting their culture and focus will be key to its inorganic development. SITSI | Vendor Analysis | Vendor Profile | Accenture | Worldwide | 2017 6 Strategy Review Accenture positions itself as an end-to-end service provider to support its customers in their digital transformation by "helping organizations maximize their performance and achieve their vision". "Successfully rotating to the new" is one of the major goals of how Accenture wants to support its clients, which means finding the right timing and strategy for their digital transformation process. The approach is to address both business and IT, which – in Accenture's view – are increasingly inseparable. The aim is to drive end-to-end transformation for clients across Accenture's five businesses (representing the service value chain): strategy, consulting, digital, technology, and operations. Accenture puts innovation at the core of its business model and declares “to lead with (applied) innovation in everything we do”. This manifests itself through the launch of the Accenture Innovation Architecture, which consists of six parts, namely: Accenture Research (research to identify and anticipate industry and technology trends) Accenture Ventures (partnerships with start-ups, entrepreneurs, investors, academic and corporate R&D groups) Accenture Labs (applied R&D initiatives) Accenture Studios (rapid development and prototyping of solutions/applications and design/creation of digital services) Accenture Innovations Centers (building and scaling of industry solutions) Accenture Delivery Centers (industrialized delivery of solutions) A showcase of this Innovation Architecture is its new facility in Dublin, Ireland: The Dock, the company’s multi- disciplinary research and