Mumbai: Accenture plans to hire about 100,000 people in FY16 and spend as much as $1 billion on acquisitions, as it invests in new technologies at a scale that far outstrips its Indian rivals. At its investor conference in New York on Wednesday, Accenture outlined its strategy for its financial year ending August 2016.
“Last year we hired roughly 100,000 people. Though the number isn’t set for this year, we expect to hire roughly in the same range,” David Rowland, chief financial officer at Accenture, told investors and analysts.
At that pace, Accenture will remain the second-biggest employer in the IT industry. Tata Consultancy Services had overtaken the company in headcount in 2013, a title Accenture has since taken back.
TCS’ hiring, the most aggressive among Indian IT firms, will be around 65,000 in FY16, falling far short of Accenture’s recruitment. TCS’ financial year ends in March.
Accenture is also beating its Indian IT rivals in the amount of money it is deploying for acquisitions. Rowland said the company, which spent about $850 million on acquisitions in FY15, had estimated it would spend between $900 million and $1 billion on acquisitions in FY16. Accenture also said it would focus its business on three ‘new’ technologies — digital, cloud and cyber security, which together contribute $10 billion to its top line or a third of its overall revenue.
The investments and hires are creating a dramatic gap between Accenture and its Indian IT competitors, one that they will struggle to close unless they get more aggressive, analysts have said.
Accenture ended the last financial year with $7 billion in revenue from its digital business — which includes interactive, analytics and mobility. To put that into perspective, Wipro had $7.1 billion in overall revenue in its financial year ended March. TCS has said it had close to $2 billion in digital revenue in the last financial year.
Accenture’s digital workforce has now expanded to 36,000, CEO Pierre Nanterme told investors. Nanterme also batted aside questions about competition in its digital business. “I would say that in our digital and operations business, we are the market makers. I spend a lot of my time looking at the competition, but there I would say we make the market. Our competition in digital is very fragmented and isn’t doing what we are doing,” Nanterme told investors.
Analysts have been pointing out that Indian IT firms could be left behind by Accenture’s aggressive moves in the space.
“Tuck-in acquisitions are likely needed to fill critical gaps in the digital value chain. There has to be a greater degree of co-operation and flexibility in working with heterogeneous partners in the ecosystem. Indian IT is techsavvy, but much less partnership savvy,” Viju George, analyst with JPMorgan, said in a July note on the digital opportunity for India firms.
He added that Accenture was aggressively cementing its partnership with players of varying size across the digital ecosystem and in its merger strategy.
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