Accenture Signals More Pain for IT Industry With Disappointing Forecast

Accenture fanned concerns about dwindling IT spending on Thursday with a quarterly revenue forecast that was below Wall Street estimates, sending its shares down more than 5%. From a report: CEO Julie Sweet said clients were "holding back on small deals" in the face of an uncertain economic outlook, mirroring remarks from Cognizant Technology Solutions last month. Accenture forecast current-quarter revenue in the range of $15.75 billion to $16.35 billion. Analysts on average expect revenue of $16.35 billion, according to Refinitiv data.

The company blamed the weakness on its business catering to the tech, media and communications industries, which have sharply dialed back spending in recent months to cope with slowing growth. Revenue for that group fell 8% in the third quarter. North America - Accenture's biggest market - also performed poorly in the March to May period, with revenue growth slowing there to a near three-year low of about 2%.

As a CEO

[Anonymous Coward]

As a CEO, I've directed my COO and CFO to eliminate IT spending, as it is a cost center and is detrimental to the bottom line. I expect IT spending to be zero by the end of the 2023 fiscal year. Similarly, since IT performance has been unacceptable, I've directed the CTO to improve the performance of the IT department by 15% in 2023 while meeting the cost targets. I project this will improve earnings by 8% in 2023 and results in a nice fat bonus for myself.

We all know.

[Major_Disorder]

Accenture is ALWAYS wrong. Good times coming for IT folks.

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[jlowery]

I've never understood what Accenture did (formerly Arthur Andersen Consulting) other than to make decisions that IT departments are too afraid to make themselves, lest they go wrong or over budget. In other words, Accenture covers their ass.

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[trybywrench]

what happens is the people that need something done don't get any support from IT so they reach out externally. Then a firm like Accenture is engaged to meet the need and integrate with the overall IT infrastructure. IT departments hate this because it shows how clueless and incompetent they are and it breeds a resentful relationship with the outside firm. However, the "business", or people who actually need to get stuff done and not just sit around sucking snot, loves the outside firm because at least ther

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[Major_Disorder]

I have NEVER seen anyone working for Accenture that was accomplishing anything other than maximising Accentures billing.

Compound Issue

[DesScorp]

It's not just economic jitters and a slowing economy. It's also a matter of companies being blasted with AI RIGHT NOW EVERYWHERE! and trying to figure out just what that means when it comes to staffing and budgets. Because if the bean counters think that replacing half your Sysadmins with a bunch of glorified scripts will save lots of money, they'll damn sure hop on the AI bandwagon and recommend severe cutbacks in human employment.

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[eneville]

It's not just economic jitters and a slowing economy. It's also a matter of companies being blasted with AI RIGHT NOW EVERYWHERE! and trying to figure out just what that means when it comes to staffing and budgets. Because if the bean counters think that replacing half your Sysadmins with a bunch of glorified scripts will save lots of money, they'll damn sure hop on the AI bandwagon and recommend severe cutbacks in human employment.

My suggestion is to replace bean counters with AI. See how that goes.

You could ask your existing IT Staff before...

[jellomizer]

A company could probably save a lot of money by seeking advice from its own IT Staff on how to do things.
So often I see institutions going with the most expensive and unreliable solutions, vs a cheap and iron clad solutions that their internal staff has in place.
Oh NO we have Administrators who wrote a Script to automate a mission critical job, which has been running flawlessly for a decade. Nope, we better pay a million dollars for a new piece of software to do the same thing, but because it does more than what we need, it is often harder to configure, and takes more time to get it to work, but hey it isn't programming. And we don't need to hire programmers to to fix the job... However it will now take 3 times as many people to keep that software working, and don't bother changing the HR requirements that demand programming skills.

a Dozen line script, placed in the operating systems task scheduler/Cron that does one thing well does the job. However the execs get impressed by a marketing team, and the fact that most execs feel like they are not good enough always tries to do what every other company is doing, even if all the other companies are failing.

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[Seven Spirals]

So sad I don't have mod points to give you. Great post. You are channeling the same anger I've had for the last 25 years about the same sore spots. These suits at US firms will do anything to avoid having to hire and pay Americans. That includes paying 10x for some shrink wrapped "solution" that only works half as well as the guy's cron-script.

I'm not totally sure as to the why of this situation, but I know the how, that's for sure. Their first swing was shit like CASE method: "You guys better pack up bec

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[jellomizer]

For a lot of companies IT Staff is one of their top educated departments. They have ideas and bring them up, and argue with others who may have less effective ones. They would much rather higher high school grads who do what they are told.

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[khchung]

My question is just why do suit-weasels instinctively, viscerally, and constantly hate having to pay coders more than they seem to hate paying just about anyone else. If the analogy were plumbers, they'd rather rip out all the pipes and replace them than hire one guy to fix a leak. Why the extreme hate?

Because they know you are holding their life in your hands, and they absolutely hated that.

If the plumbing failed completely, they might be inconvenienced for a while. If the IT system failed completely, the company is bust, and the suits know there is absolutely nothing they can do in that case and have to 100% rely on their IT staff. Knowing that makes them mad.

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[trybywrench]

> However the execs get impressed by a marketing team

marketing teams get in front of execs because IT isn't delivering, that's the root of the issue.

Re:You could ask your existing IT Staff before...

[pr0t0]

Moving your IT work offshore is NEVER about improving the IT capabilities of your enterprise. It's about adding a bullet point to your CV that allows you to say that you "negotiated a multi-million dollar contract to improve efficiency, save money, and make the enterprise more capable and nimble". With that bullet point, you can now up your ask when taking the next CIO position in 14 months.

The truth that you wasted millions of dollars, destroyed morale, slowed everything down, angered your customers, and left a dumpster fire in your wake is conveniently left off that CV.

I read not too long ago that a major hospital system in Ohio outsourced their entire IT staff to Accenture. The woman who helped make it happen was a former exec of that hospital system, a current exec at Accenture, oh...and the mayor's wife.

https://www.reddit.com/r/Colum... [reddit.com]

Data leaks and Personal Information leaks

[Canberra1]

In the midst of corporate data theft and extortion, they are going to trim security, so that increased insurance premiums can be paid - which is another way of saying they expect a preventable disaster. I do know breached companies never name their IT lead out-sourcer(s) responsible.

ChatGPT will help build demand for IT

[Tony Isaac]

ChatGPT is the hot new thing. Every company will be looking for people who say they can do "AI." This will attract enough people away from "traditional" IT / dev jobs, that people who need real work done, will be scrambling to find people. I think the future looks pretty good for developers these days.