ACCENTURE: A snapshot of cost overruns job loss and dissatisfaction

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Accenture has more than 75,000 employees based in more than 110 offices in 47 countries delivering a wide range of consulting, technology and outsourcing services. Its head office is in Bermuda. Its web site address is: www.accenture.com

$11.57 billion for fiscal year ended Aug. 31, 2002

$2.83 billion for Q2 of fiscal 2003 (3 months ended Feb. 28, 2003)

Accenture is the new name for Andersen Consulting, which broke away from Arthur Andersen in 2000, after a longstanding feud. The change to Accenture was the fastest, most expensive re-branding effort in history as everything was changed to fit the new logo in a matter of days. It is Arthur Andersen that is in so much legal trouble for allowing Enron to cook their books and destroying Enron's documents as Enron collapsed.

Accenture is major provider of management and technology consulting. Outsourcing for government includes computer systems design and network creation and management. Accenture's history of public services outsourcing, and privatization of major parts of service delivery under a certain time period, has often been very problematic. There have been problems in many state governments in the USA and the Province of Ontario.

Other key areas of Accenture's consulting practice are promoting the privatization of government services through Government Outsourcing Consulting and the introduction of business language and processes into government. Accenture's government outsourcing consulting work helps Accenture in promoting government outsourcing contracts with government, in itself a major growth area of business for Accenture.

In 2002, Accenture put out a study on "Outsourcing Government Services to the Private Sector" saying that outsourcing is finally "beginning to be explored as a way to transform the culture and effectiveness of government workplaces." Accenture's fastest growing business is government outsourcing contracts. Key lessons from the report, which was based on surveys with 50 high level government executives, included "involving employees and unions early… to help them navigate the process." Job loss and privatization is a major outcome of many of these projects.

The latest example is the recent takeover of parts of BC Hydro. The public interest was left off the board of directors set up by the company taking over B.C. Hydro's customer service and office work. Accenture Business Services B.C. named a seven-member board of directors that will oversee the 10-year, $1.45-billion contract B.C. Hydro has signed with the international consulting firm Accenture. In the contract, Accenture Business Services (ABS) assumes responsibility for B.C. Hydro's customer services, human resources, information technology and office functions, including 1,500 B.C. Hydro employees.

Accenture Problem Contracts and Investments

Ontario Welfare - For the third time since 1998, Ontario's provincial auditor has sharply criticized the government's dealings with Accenture. Auditor Erik Peters called the firm's social assistance system "seriously flawed" and "a bad deal for taxpayers." The contract has cost more than $400 million - and counting. The original cost was supposed to be capped at $180 million. Peters called payments to Accenture "questionable" because savings on which the payments were based "were exaggerated."

In early March 2000, the Ontario government fitted social services workers with tracking devices in a 16- week trial to track their activities virtually every minute of every day. These "Big Brotherish" boxes, the brainchild of Accenture, would beep several times every hour, and workers would have to punch in a code to indicate what they were doing at that moment.

From Ottawa Citizen Editorial disparaging the contract between the Ontario Government and Accenture for the restructure of the welfare system: "when it comes to dealing with high priced consultants, you pay dearly. And why not? Private companies wish, quite understandably, to maximize their profits. They are not in the business of saving taxpayers money. The lesson is that if a service truly needs to be provided by government, then government should do the job." ["Accent on Savings", Ottawa Citizen Editorial, October 22, 2001]

Ohio Welfare System - Up to 1998, the former welfare director of Ohio, Arnold Tompkins, awarded nearly $26 million in un-bid contracts to Accenture and later, after he left public office, was given a $10,000 a month job from Accenture. After leaving office, he was found in breach of conflict of interest which ended in a 'slap in the wrist' for the guilty Tompkins, as he received only a sentence of 300 hours of service to develop a plan to "integrate county based law enforcement computer systems."

Nebraska - Accenture billed Nebraska $24 million over the original estimate to automate social services programs. The state auditor called the project "the most wasteful I have ever heard of. Its like pouring money down a deep dark hole."

New York 'Connections' Child Monitoring Computer System - With software, programming and monitoring provided by Accenture [IBM provided the hardware], this system to enable private and public agencies to track child abuse reports has been filled with problems. It is incomplete, was nearly 3 years overdue, and cost $362 million up to early 1999 which is 3 times the original price tag. Accenture has been unaccountable as their responsibilities were not spelled out, leaving New York at Accenture's mercy. For example, Accenture projected 5,448 billable days of working on the project, and it has grown to over 28,000, all at the expense of taxpayers.