Is Accenture getting ready to undercut the Indian Vendors ?
May 18th, 2009
A recent article in EconomicTimes (Link) talks about Accenture proposing to setup a separate unit to offer lower cost services to it’s client. Services which will be 10% cheaper supposedly then their existing services. Looks like Accenture wants to maintain it’s brand equity but compete directly for project based work against Indian vendors.
Accenture has been typically the ‘higher end’ service provider for their clients. The consulting rates are higher but so have been the offshoring rates as part of bundled deals which Accenture offers to its clients. A few quarters back when the market was still a growth market, Accenture was the model a number of Indian Vendor aspired to attain. Higher consulting dollars, Close ties with the C-suite and Strategic partners. Same time, Accenture claimed that it will not get into lower end of the services and the offshore vendors have to work to catch up with Accenture.
The current marketplace has forced firms to look at their operating model more closely. The concept of setting up a separate unit though is interesting. Given where the marketplace and the competitive nature of winning new deals and price cuts being demanded by the client, Accenture should be able to offer those lower price points within their existing operating model. This is different than having separate brand models for Toyota or Lexus.
This move does though make the market more competitive and the battle uglier between the outsourcing vendors.
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