Accenture Plc is almost twice the size of its nearest competitor Tata Consultancy Services Ltd (TCS) but the US firm couldn’t resist taking a swipe at the Indian company’s digital offerings.
As the two companies battle it out to win digital business from the same clients, Accenture, which brands its digital solutions as X.O., seems to have stepped somewhat out of the line to take a dig at its Mumbai-based rival’s Business 4.0. digital offering
“Industry 3.0, 4.0—what’s next?" reads a statement on the website of Accenture X.O., an umbrella branding under which Accenture offers solutions using data analytics, cloud computing and internet of things to help manufacturers run their business more efficiently.
Accenture’s dig at TCS’s offerings is arguably the first of its kind in the sector as companies typically avoid commenting on rivals.
TCS first launched Business 4.0 at TCS Europe Summit, its annual two-day customer event in Europe in September 2017. This was less than five months after Rajesh Gopinathan took over as chief executive even as the company got a trademark on Business 4.0.
“Stop playing catch-up and start applying digital at the core of your business to reinvent for a new era of industry. Go beyond Industry 4.0: If you think Industry 4.0 is the epitome of industrial digitization—think again. The fact is the very notion of the industry itself is evolving," says Accenture as it begins to describe its offerings under X.O.
Accenture first set up X.O. in the September-November period of 2017.
Both Accenture and TCS declined to comment.But TCS executives aren’t pleased.
“Where is the question of playing catch-up when we first launched this framework in September 2017, before Accenture did," said a TCS executive on condition of anonymity.
“We don’t want to speculate why some company will play down our offerings. But Business 4.0 framework allows us to give clients personalization and help them create value and is resonating well. This is probably one reason why someone is trying to take a potshot at our offering," said a second TCS executive.
Some experts say Accenture’s attempt to mock TCS’s offering means it views the Indian company as a rival in digital deals.
“Accenture has shifted its competitive threat radar from Cognizant to TCS. They definitely see TCS as their main threat across IT delivery areas," said Phil Fersht, chief executive of US-based HFS Research, when asked if Accenture is taking a dig at TCS.
So is Accenture facing the heat from TCS?
For now, Accenture is almost twice the size of TCS. Accenture, which follows a September-August financial year, reported a 13.5% growth to end with $39.57 billion in revenue. TCS grew 9.6% to end with $20.91 billion in revenue in the year ended March 2019.
Accenture claims over 60% of its total revenue is digital, which is about a third of TCS’s total business. TCS’s build-everything approach contrasts with Accenture’s strategy of buying companies and hiring executives.
“Accenture is not facing the heat. Rather, it is trying to stay ahead of it as it sees the industry consolidating and commoditizing," said Fersht of HFS Research.
Historically, there was not much to differentiate between solutions offered by thousands of IT services firms, globally. Hence, most IT firms relied on strong sales and marketing teams. However, over the last few years, clients have pressed their IT vendors to offer them solutions across data analytics, artificial intelligence-power platforms, to help them run their businesses better.