Is an IPO in the cards for the former Andersen Consulting?
The World Match Play golf championship began in Australia last week with a lot of familiar namesEls, Lehman, Suttonand one unfamiliar one, an event sponsor called Accenture.
But once a $175 million advertising blitz kicks in, the whole world will realize that Accenture is simply the new moniker for Big Five professional-services stalwart Andersen Consulting. The longtime golf sponsor left its old name behind when it officially split with its audit parent, Arthur Andersen.
Accenture, which is meant to connote both an "accent on the future" and a spirit of adventure, enters the new millennium with immense competitive advantages. Global 2000 customersthe only IT buyers with money left to spendwant the security of an established, profitable services vendor, and Accenture already has strong ties with that client base.
Moreover, the Web-based projects that matter are growing longer and more complex, and that plays right into Accentures strengths in project management, traditional integration skills, and employee training and retention. Longer-term engagements also help shield consultants from the inherent risks of an economic downturn.
But for CEO Joe Forehand and company, challenges loom, apart from the immediate task of branding the new company name.
"This is a difficult competitive climate for everybody, not just the Razorfishes," says Rich Young, an analyst at Yankee Group. "A significant shift in demand is under way, and many large customers are asking themselves whether they need to get involved with an Accenture right now.
Its true that Accenture and KPMG and Cap Gemini E&Y are in better shape [than the start-up e-integrators], but customers are still sitting back."
On the plus side, however, Accenture has decades of experience navigating the business cycles, without sacrificing its culture or service quality.
As for its much-anticipated initial public offering (IPO), Accenture partners are expected to take up that possibility at their upcoming spring meeting, according to a company spokesman. Analysts, meanwhile, advise potential investors not to hold their breath, at least until consulting valuations return to the levels of yore.
"If you look at KPMG, which continues to pull back its [IPO] shares," notes Young, "I think its safe to say that an Accenture IPO is not going to happen anytime soon."