Cognizant alleges Infosys swiped its trade secrets
Sueball suggests outsourcer went out of bounds by developing competing product
CxO
26 Aug 2024 | 9
The model is starting to show cracks
Having worked with Accenture employees on various projects, I can safely say their current business model is *exactly* as follows:
1. Hire extremely green recent college graduates and place them in customer locations -- this gives the illusion that they're hiring the best and brightest young talent and giving their customers value for money.
2. Have an "A Team" that does an extremely polished sales pitch to executives.
3. Once the contract is signed, bring in the "B Team" of college grads from Step 1 to do the actual customer facing work (PowerPoint delivery, etc.)
4. Offshore any actual behind the scenes work to the "C Team" in the cheapest possible location for the lowest possible price. Keep rotating countries when the cost of labor increases.
5. Repeat over and over again, get firm partners on corporate boards, or move them to customers so they can steer more business back to Accenture.
6. Profit!
I think the problem they have is with Step 4 right now. There are only so many countries that have enough IT resources and are cheap enough to make the high margin model work. Step 1 isn't a problem -- there are tons of academically smart new grads who fall right into this work. What 22 year old doesn't want to continue the collegiate atmosphere in their work culture, and be made to feel super-important by being flown around the country/world? It's perfect for academic overachievers who are faced with the real world for the first time -- there's a lockstep career progression, up-or-out promotion, and a strict set of rules to follow.
I could be dreaming and say executives are getting better BS detectors, but I think that's wishful thinking -- it's got to be the increase in labor costs.
Biting the hand that feeds IT
