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India Computer Services
Accenture: Strong “offshore” offering
„Accenture India: 60,000 people strong
We met with Accenture India management yesterday and believe their “offshore”
offering is comparable with the large India centric vendors. We expect large
Indian and global vendors like Accenture and IBM to continue to gain from global
sourcing gaining share. Accenture has grown rapidly to strength of 60,000 people
in India. It now recruits from engineering campuses as well and has training
facilities in-house. It believes its key competitive differentiators are its deep client
relationships, its focus on specialization and creation of software solutions, and
focus on industrializing delivery through use of tools and shared resources. It also
has a wide low cost delivery network. One of the challenges could be relatively
lower ability to offer onsite postings to junior employees and rev cannibalization
as existing revs shift offshore.
Critical mass in India/other low cost delivery centers
Accenture has grown at 50% CAGR over last 5 years to 60,000 people across 25
locations in India. This is comprised of roughly 43,000 in IT services and 17,000 in
BPO. Applying an offshore effort ratio of 75%, it makes them about 80,000 strong
vs HCL Tech (the 5
th
largest offshore centric vendor) at ~72,000). Moreover,
Accenture has another 60,000 people in other low cost global delivery locations
(eg -Manila accounts for 20,000, where the bulk of the work would be BPO).
Business model evolved to leverage “offshore”
One of the key advantages of the ‘offshore’ model is to leverage the employee
pyramid for scalability and cost effective delivery. When it set up 10 years ago,
the model was skewed towards laterals for Accenture, but now fresh engineering
graduates account for 50% of any years’ recruitment, close to the ~70%
recruitment done by players like Infy. All training is in-house and there is a stress
on continued training. The other challenge was the perception of India perhaps
being like a ‘back office’ but with India accounting for the third highest number of
Senior Executive promotions for FY10, the perception should change. Employee
satisfaction is reflected in modest attrition rates at early teens in IT and early
twenties in BPO-ex voice, in line with the best in the industry viz. TCS.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Computer Services
Accenture: Strong “offshore” offering
„Accenture India: 60,000 people strong
We met with Accenture India management yesterday and believe their “offshore”
offering is comparable with the large India centric vendors. We expect large
Indian and global vendors like Accenture and IBM to continue to gain from global
sourcing gaining share. Accenture has grown rapidly to strength of 60,000 people
in India. It now recruits from engineering campuses as well and has training
facilities in-house. It believes its key competitive differentiators are its deep client
relationships, its focus on specialization and creation of software solutions, and
focus on industrializing delivery through use of tools and shared resources. It also
has a wide low cost delivery network. One of the challenges could be relatively
lower ability to offer onsite postings to junior employees and rev cannibalization
as existing revs shift offshore.
Critical mass in India/other low cost delivery centers
Accenture has grown at 50% CAGR over last 5 years to 60,000 people across 25
locations in India. This is comprised of roughly 43,000 in IT services and 17,000 in
BPO. Applying an offshore effort ratio of 75%, it makes them about 80,000 strong
vs HCL Tech (the 5
th
largest offshore centric vendor) at ~72,000). Moreover,
Accenture has another 60,000 people in other low cost global delivery locations
(eg -Manila accounts for 20,000, where the bulk of the work would be BPO).
Business model evolved to leverage “offshore”
One of the key advantages of the ‘offshore’ model is to leverage the employee
pyramid for scalability and cost effective delivery. When it set up 10 years ago,
the model was skewed towards laterals for Accenture, but now fresh engineering
graduates account for 50% of any years’ recruitment, close to the ~70%
recruitment done by players like Infy. All training is in-house and there is a stress
on continued training. The other challenge was the perception of India perhaps
being like a ‘back office’ but with India accounting for the third highest number of
Senior Executive promotions for FY10, the perception should change. Employee
satisfaction is reflected in modest attrition rates at early teens in IT and early
twenties in BPO-ex voice, in line with the best in the industry viz. TCS.
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