Page Two

By eweek  |  Posted 2004-03-15 Print this article Print

Can you explain how the sharing of risk and reward works?

Were prepared to share in the pain and share in the gain. We want to establish a relationship where we are aligned on objectives. But this is really hard to do. The typical customers mind-set is only to hold the service provider accountable for all problems. That sort of behavior does not incent Accenture or any service provider to go beyond the basic elements.

Are there any instances you could point to where this approach has been successful?

The work weve been doing with J Sainsbury is an example; also, the work were doing with the London Stock Exchange. A form of our compensation is tied to their business results, so we are very incented to make them successful over and above our base compensation. A global pharmaceutical company is another example. A key outcome was to improve their clinical data management activities so that they can get product to market faster. We were able to work with them to streamline this critical activity. A portion of our compensation is tied to our ability to get these tasks completed quickly.

Isnt there a lot of gray area in measuring some of these benefits? Are you getting a percentage of profits?

Its not based on a percentage, but its based on fair value for our contribution over and above meeting base levels. Your point is very valid. It is extremely difficult to isolate any one factor in profitability. We often talk about tying our compensation to an improvement in share price. But its difficult to understand the contribution of any one factor in raising a companys share price. However, it is possible to understand the value of a particular contribution and assess the compensation for that value.


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel