ACCENTURE MONTHLY REPORT Media Monitoring Analysis April 1 – April 30, 2005 1. Clips Collection Overview Content Number of Clips Accenture 75 Competitors 155 Industry 28 Total 258 2. Accenture Clipping Analysis Types of Media No. Type No. Ratio 1 Newspaper 40 53% 2 Magazine 3 4% 3 Online 32 43% No. Ratio Contents of Articles No. Content 1 Accenture- Consulting 21 28% 2 Accenture- Technology 31 42% 3 Accenture- Corporate Management 4 5% 4 Accenture Mentions 19 25% 3. Competitors Clipping Analysis Number of Clippings Company Number Ratio Accenture 75 33% McKinsey 23 10% 80 Accenture BCG 9 4% 70 A.T.Kearney 6 3% 60 Booz Allen 2 1% 50 Roland Berger 4 2% 40 Deloitte 21 9% BearingPoint 35 15% IBM BCS 37 16% McKinsey BCG A.T.Kearney Booz Allen Roland Berger Deloitte BearingPoint 30 IBM BCS 20 Cap Gemini EDS 10 Cap Gemini 1 0% EDS 10 4% HP Consulting 7 3% 230 100% Total HP Consulting 0 4% Accenture 3% 33% McKinsey 0% BCG 16% A.T.Kearney Booz Allen Roland Berger Deloitte BearingPoint IBM BCS 15% 10% 9% 2% 1% 3% 4% Cap Gemini EDS HP Consulting Marketing Activities Analysis Accenture 1) With more than 200 years history, Royal Shakespeare Company (RSC) has recently achieved sales increase. According to statistics, the family set ticket of Shakespeare’s drama performance sold last year increased by three fold comparing with that of 2003. The business director of RSC contributed the significant achievement to the support from its business partner, Accenture. Accenture conducted a marketing and sales plan by categorizing RSC’s audiences into 8 groups from the previously collected 2 million information data out of 210 thousand performances provided by RSC during the past four years. 2) American Accenture indicated recently that the recent scandals in China’s banking industry would not bring much negative influence in the confidence of overseas investors. On the contrary, the current situation may benefit investors in more strategic investments. Patricia Y. Tsien, a partner in the Accenture Financial Services Strategy practice, expressed that it is understandable that major commercial banks encounter scandals especially in China’s current process of banking reform. 3) During the recently held 3rd Far East Steel Conference and 2005 China Ironstone Meeting, domestic and international specialists attended and discussed the issues confronting steel industry due to the increase of ironstone raw material price. John E. Lichtenstein, partner of Accenture Steel Services, indicated that the shortage of raw material accelerated the integration and acquisition in world steel industry along with the expansion of productivity of international steel industry. 4) According to a new research of Accenture, senior leaderships of most American and European chemical companies considered that Chinese chemical market still possessed attraction for their investment in the next few years. The research also suggested different investment strategies between American and European companies, which focused on joint venture and acquisition respectively. 5) Accenture recently announced that its Dalian-based China Delivery Center has attained the Software Engineering Institute's (SEI) Capability Maturity Model for Software (SW-CMM®) Level 5 rating, the highest possible CMM rating from the SEI. 6) Capgemini agreed to sell its USS175 million North American healthcare business to Accenture for the sake of stemming losses in the region. Capgemini will transfer 600 staff to Accenture but keep its outsourcing contracts with healthcare clients and its federal public-sector health consulting activities in the US. McKinsey 1) Vice-president of McKinsey in Shanghai indicated that merger and acquisition with foreign enterprises is one solution for Chinese enterprises to face pressures from the government and counter intense competition from foreign competitors in the country. They should first carefully evaluate gain and loss of a deal. The vice-president also suggested the Chinese enterprises to establish a temporary joint venture to ensure a smooth transition and integration of business between the two enterprises. 2) McKinsey recently conducted a research for Asian banking industry indicating that Asian market possessed world greatest growth opportunities with abundant profits. Asian banking industry should establish a new concept of profit in order to derive benefits from the rapid growth, which included growth strategy by compressed scale, updating distribution network and giving up comprehensive banking services, etc. BCG 1) According to the Vice President of BCG, the key issue of China’s logistics lies in its decentralization. More than 2 million transportation companies manage 5 to 6 million cargos. Multinational companies need a 20% operating cost to be invested into the logistic concerned issues comparing with the average 10% in the developed countries such as delay, application approval and administration expenses when contacting with numerous small companies. ATK 1) The interview with John Egan, General Manager of Atkearney Greater China covers China market and investment environment, current situation and future prospect of China consulting industry. He puts forward that Chinese enterprises’ stepping towards the world will benefit China in growing into a world major economic country in the next decades. Since its entry to Chinese market in 1985, Atkearney’s local business occupies 70% within its overall customer services in China. Booz Allen 1) In the interview with Xie Zuxi, President of Booz Allen Greater China, Xie commented on Chinese enterprises and management consulting industry and related to Booz Allen as well as his success and failure. He also summarized the required qualities for a good consultant as his own self-disciplines. Roland Berger 1) Zhu Wei, President of Roland Berger China, expressed in the recently held 2005 (China) Management Trend Press Conference that the acquisition of Chinese enterprises remained in a fundamental level lacking of acquisition experiences in a sense of market significance. Deloitte 1) According to the interview with Shi Nengzi, directing partner of Deloitte Greater China, enterprises’ senior leadership should realize the significance of consulting management and support management reform with transformed thinking. Consulting companies confront a major challenge in unifying leadership opinions by adopting different measures, optimizing management method, and conducting analyzes on and integration of the two aspects. 2) According to a new report of Deloitte Global Finance Service, the growing regional presence of major global banks is motivating Asia’s banks to position themselves more competitively by restructuring their lending operations and disposing of non-performing loans (NPLs). But this is only the first step. Deloitte suggests that if Asia’s banking industry is to become competitive globally, it must ensure that NPL volumes remain manageable and do not become a recurring issue. BearingPoint 1) BearingPoint announced recently that it would begin offering Customer Identity Management (CIM) services, a new convergence of Customer Relationship Management (CRM), Identity Management and Risk Management, to help companies gain more information about their customers and at the same time keep their information private and secure. 2) Rod McGeary, Chairman of BearingPoint flied to Beijing on April 6 with his visit to Chang Zhenming, Director of China Construction Bank and started the marketing tour of consulting services for China finance industry. More than 20 senior officials of BearingPoint global finance service joined in his China tour. Christopter Formant, Executive VP of BearingPoint Global Service indicated that Chinese banks possess the potential to grow into the most influential financial institutions in the next 10 years. 3) BearingPoint released a financial report in the regard of the process of China’s banks stepping into the global financial service market and noted five key goals that are important for the development of China’s banks: financial reporting and risk, product development, digitization, delivery systems and management development. 4) Christopher Formant, Executive VP of BearingPoint Global Financial Service Line, indicated that China might grow into the most potential financial institution in the next 10 years provided China solve certain fundamental management issues in its banking industry such as urgent tasks of establishing a risk management vertical system in order to fulfill business vertical management, strengthening banks’ internal control, and applying daily routines to Basel II system. IBM BCS 1) Senior consultant of IBM BCS pointed out in the banking industry section of “2005 IBM Forum” held recently, that Chinese banks should establish a framework which puts operation risks into a quantitative process within the business environment and with a continuous inspection. 2) IanBall, partner of IBM BCS in Asia Pacific region, pointed out on April 4 that IPO of domestic banks can only be considered as a temporary point with limited effects, and the overall and long-term process of bank transformation should be attached great importance and need strategic plan. 3) Shi Min, partner of IBM Business Consulting and System Integration Services, claims that information integration in taxation industry should not adopt a unified method. On the contrary, local taxation department should conduct system integration according to the operating process of each individual system. Cap Gemini 1) Capgemini released a report recently suggesting that Chinese automobile consuming market differentiates from other mature market by possessing its own dynamic status. It is, therefore, essential for auto manufacturers to figure out the specific features of China auto market in order for maximized profits. EDS 1) EDS released its development strategy in Chinese market on March 10 aiming at China’s finance, government and manufacturing industries, etc. EDS’s outsourcing service strategy is focused on developing Chinese enterprises’ core business and leading domestic outsourcing companies to international market. EDS will enter into Chinese local market through methods of strategic restructure and enterprises integration, and so on. 2) In view of enhancing the market expansion in greater China market, Wu Zhuangming was recently appointed Managing Director of EDS Greater China and Korean region in charge of sales and customer solutions covering the regions of China mainland, Hong Kong, Taiwan and Korea. Phil Pryke, VP of EDS Asia Pacific region, indicated that EDS has increasingly recognized the potential and the significance of the greater China region in the company’s overall business. 3) Charles Cox, VP of EDS and Wu Zhuangming, General Manager of Greater China confirmed on March 23 and 31 respectively that EDS would sell its management consulting company A. T. Kearney. The merger deal between EDS and Atkearney in 1995 was considered as an innovation in cooperation model of combining IT service with consulting service. However, the confirmation of EDS’s selling of Atkearney drew greater attention. This may attribute to Atkearney’s slow revenue increase and loss since 2000. HP Consulting 1) According to the latest statistics of TPI, which is an outsourcing consulting company, HP is ranked among top six companies after its entry into the outsourcing market for less than three years, whereas other top ones include Accenture, ACS, Computer Sciences, EDS and IBM. 2) At the end of April, HP announced plans to invest USD 50 million over five years to build a new business process outsourcing (BPO) center in Wroclaw, Poland. The center is expected to help drive commerce to Poland, expand HP's growing BPO business globally and enable the company to offer local financial and accounting services to multinational companies that have pan-European operations.