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Now Andersen, Tomorrow Accenture, They’ve got a lot of Selling to do

Written By: R. Krause
Published On: November 8 2000

Now Andersen, Tomorrow Accenture, They've got a lot of Selling to do
E. Robins - November 8, 2000

Event Summary

Andersen Consulting (let's call it AC) has finally announced its new name: Accenture. This comes on the heels of the arbitrator's report on August 7, in which the long battle with Arthur Andersen was finally resolved (see our article: Implications and Attitudes As the Andersen's Split under the ICC Ruling: Consulting To Go for a Name Change). AC has undergone major transformations over the past year, and its new name is intended to symbolize a new beginning. Developing a new name has been on the drawing board since well before the arbitrator's report was issued. AC's connection and confusion with Arthur Andersen (from which it essentially branched off in 1989) has long been a thorn in its side, although it also enabled Andersen to be identified (for good or ill) in the marketplace. Arthur Andersen can still use the name AC if it wants, but if they do, the name change from AC to Accenture will not eliminate the confusion. The SEC inquiry and future ruling on auditor independence may have an impact on this situation.

Kim Petersen, a nine-year veteran of AC, submitted the name Accenture because to him it represented the future and looking at AC's new positioning with the excitement of a new adventure.

The name selection was no easy process. Because of a past desire to change names, a master list of some 5000 names had already been drawn up. The rest was an ambitious and coordinated effort to trim the list using internal legal resources and 25 external law firms around the world, employing language specialists to check for offensive meanings in 50 countries and 65 languages, and checking across seven or eight different classes of trade. The effort also generated around 3,000 trademark reports. Additionally, they did 'blind testing' of thirty of the names with a number of clients and potential clients, and Accenture was the highest rated out of those. The result of all this narrowed the list down to 50. More trademark checks shortened it down to 10, and then finally a subcommittee reduced it to 4. Accenture was picked the winner on the announcement day, October 26. Quite an effort and accomplishment in 80 days.

The obvious question is whether AC wanted to keep AC. According to Joe Forehand, Andersen's CEO "No there was no effort at all to link Accenture to AC. In fact, one of the things in the brand positioning strategy that we wanted to ensure was to move to a new beginning and a name that moved on from the firm's roots in the past. If you look forward, you will not see any of the logo based on AC."

Jim Murphy added "we continue to own the ac.com website but by the arbitrators ruling [we] will not use Andersen Consulting or any derivative of Andersen Consulting in any way and that will include AC. So, we will not use ac.com going forward, except we will keep it up as a site to refer all inquiries to our new website, which will be www.accenture.com. At some point in time, we will drop ac.com."

Market Impact

Though the market impact will not be significant, the name change clears up a number of issues that have dogged users when it came to understanding the "Andersen family" of companies. In a sense, both AC and Arthur Andersen were running off the back of each other. AC was associated with a long established and solid organization like Arthur Andersen, while Arthur Andersen was embellished by the apparent presence of a technology consulting arm, giving it an image of progressiveness and modernism. Yet both companies have been separated by internal disputes and family feuding since the protocols were signed in 1989, a division that was sharpened to the point of divorce several years ago.

The name change is intended to give AC a genuine new look and feel in the marketplace, and show what (it wants you to believe) it truly is. According to Andersen's publicity, " Our brand consists of many elements including our marketplace positioning, signature, imagery, typography, knowledge capital, intellectual property and mostly importantly the behavior of the people who make up our global firm." There is a real challenge here to get all this across.

Of the two companies, Arthur Andersen is the one more likely to suffer from severing the name association. In all likelihood - and legally - Arthur Andersen could use AC as a name in order to retain the positive benefits of any confusion. However, this would depend on whether the SEC (Securities Exchange Commission) Auditor Independence Rule Proposal is adopted; the rule would essentially ban auditors from having any financial interest (including technology related services such as building financial systems) or investment interests in their clients. The third hearing on the rule was in late September and a fourth and final hearing is due shortly. If the ruling goes against Arthur Andersen, then AC may be resurrected by Arthur Andersen in some form as another attempt at providing arms length technology services. Given the history of Arthur Andersen, this would not surprise us. The payback on technology services is between 1.5 and frequently 4 times as high as for accounting/auditing contracts.

In some ways we sympathize with Arthur Andersen. The potential SEC ruling would not only remove lucrative services opportunities, but could force them to make choices that would leave them as a poor-cousin consultant. It is unclear whether this would actually impact the quality of auditing as it is practiced today. Arthur Andersen would like us to think that it would.

Meanwhile, Accenture as a brand will be promoted worldwide. Accenture has added $100M to its branding effort - making a total of $175M next year - to promote its name as of January 1, 2001. The impact of such high spending, coming from a brand maker, may well impact the market significantly, particularly if they can accompany the branding campaign with other add-on ventures such as Avanade (The Empires Strike Back - Part I: The Big Guys Spin On A Dime) in which they are paired with Microsoft. If AC's ambitions are met, Accenture could become a new kind of force: a full-fledged and (potentially) public management and technology consulting company with a significant share of world technology consulting markets. It would also have a share of technology investment through alliances and offshoots like AC Ventures. For example, AC Ventures and SOFTBANK Venture Capital are launching GameChange (see our article AC Ventures and SOFTBANK Venture Capital Announce GameChange.).

User Recommendations

This name change will end the confusion generated by the two Andersen names, at least officially. There will be a financial services corporation focused on accounting and financial auditing and related services called Arthur Andersen, and a technology services company focusing in the new economy technologies and building businesses therein, called Accenture. This distinction will become even clearer if the SEC rules that auditors must be commercially and financially independent of their clients.

In the business world, however, it may take time for this change to really take hold. At least Accenture seems to have some connection to Andersen Consulting (retention of the first two letters "AC"), making it a little easier to make the connection between the old and new names. Other companies have changed names to give the appearance of being fresh and new, only to have everyone wonder, who are they?

Watch out, however, in case the name Andersen Consulting and web address ac.com appear on the horizon again sometime next year or later. It won't be the AC of today. And it may not even be Arthur Andersen but an offshoot, possibly an independent one. If you're looking for the current AC, think Accenture for the future.

AC's adventures in creating a new name and validating it in the global market carry a message for all users who vie for global recognition. It obviously is imperative to avoid names that have unwanted connotations in languages where you do business, but the effort to ensure this is far from simple. Users should choose a service that specializes in this area and not go it alone. This is particularly important as globalization keeps moving; when you are on the web you are in front of the world.

 
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