History unfolds in fits and starts, and every so often an event moves the needle forward like a foot on a pedal accelerates a car. And so it is inside the world of consulting, where five years ago one particular transaction helped to move the consulting world's needle forward and helped to change our view of the consulting industry. That transaction was Accenture's initial public offering.
Five years ago — less than two months before September 11th — Accenture pulled the trigger on a July IPO, as a slowdown in the consulting business seemingly began to cloud the sector's future.
Some wondered whether Accenture's transaction would be a victim of poor timing. After all, only a year earlier, Hewlett-Packard had negotiated to buy PricewaterhouseCoopers's consulting unit for an estimated $18 billion. Ernst & Young had sold its consulting arm for $11 billion. However, by July 2001, shares of KPMG Consulting (now Bearingpoint), which had gone public the previous February, had already dropped 22 percent from their $18-a-share offer price.
Nevertheless, Accenture raised a higher-than-expected $1.67 billion from the deal.
The consulting firm would sell 115 million shares at $14.50 apiece, or about 12 percent of itself. The share price was at the high end of a previously stated range of $13 to $15.
Quashing Wall Street skeptics and consulting pundits alike, Accenture's sturdy offering appeared to accent the best qualities of a sector relatively few investors had taken the time to get to know. Five years after Accenture helped move the sector's needle forward, the nature of its work has changed, as has the nature of all consulting work.
Long gone are the days when corporate managers and management routinely swing their doors open to consultants touting business analytics. "In this day of Internet exchange, the marginal value of knowledge is going to zero, because everyone can get the knowledge fairly quickly — so in today's world, what you have to learn to deliver is skill," says David Maister, author and consummate observer of the consulting world at large.
Perhaps no consulting firm understood this (and executed upon it) better than Accenture. With this issue of Consulting Magazine, we're pleased to have Janet Hoffman, managing partner of Accenture's North American retail practice, grace our cover along with the New York Stock Exchange. Together, they help us mark the passage of time.
Just as America turned a page of its history five years ago, so too did the consulting world — thanks to Accenture.
- Jack Sweeney, Editor-in-Chief
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.