Now Andersen, Tomorrow Accenture, They’ve got a lot of Selling to do
Written By: R. Krause
Published On: November 2000
Now Andersen, Tomorrow Accenture, They've got a lot of Selling to do
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.
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.
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.
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."
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."
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.
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.
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.
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
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
Ventures and SOFTBANK Venture Capital Announce GameChange.).
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.
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?
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.
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.