Accenture is about to acquire ESP, an Ireland-based consulting and manufacturing services provider for the life sciences industry. Upon close, ESP will join Accenture Industry X.0, which helps clients master the digital reinvention of industry, strengthening the firm's capabilities to transform manufacturing for pharmaceutical, biotech and medical device clients globally. The combination of ESP's digitally-enabled manufacturing services and Accenture's Industry X.0 capabilities will allow clients to take advantage of engineering and product lifecycle management, advanced analytics and artificial intelligence for a more flexible, efficient and cost-effective production process, says Anne Marie O'Halloran, Managing Director and lead of Accenture's Life Sciences Industry X.0 group.ESP currently services 17 of the top 20 global pharmaceutical and biotech companies from offices in Ireland, France, the Netherlands, Puerto Rico, Turkey and the United States and has a team of 200 professionals. O'Halloran sat down with Consulting to discuss the ESP acquisition.
Consulting: Can you tell me a little bit about ESP and the reasons behind the acquisition?
O'Halloran: We're really excited with what ESP brings to the table and how it further augments our capabilities. What I think excited us the most was they have long-standing industry experience in implementing manufacturing solutions—with niche expertise in manufacturing execution systems (MES), as well as their work in serialization. MES provides a digital foundation that's needed for clients to take advantage of analytics and IOT. And serialization allows clients to digitally track each saleable unit from the packaging line all the way to the patient.
Consulting: How does ESP fit into Accenture's current capabilities and client offerings?
O'Halloran: We see this as a play of moving from strength to strength. We've had a long-standing relationship with all the large pharmaceutical clients in the supply chain domain. "New digital technologies and scientific advances are combining and changing how therapies can be developed and delivered to patients. There is significant opportunity for Accenture to help clients drive greater efficiencies in how they manufacture essential medicines for patients around the world with the combination of ESP's and our life sciences expertise. This move is very much aligned with our objective to grow faster than market and this is a way to bring the differentiated skills ESP has that will allow us to continue to grow in this Industry X.0 domain.
Consulting: You've completed a few acquisitions recently, what are some of things you saw in ESP that made you believe they'd be a good fit with Accenture?
O'Halloran: The first thing is that we have a complimentary set of clients. We serve many of the same clients in a complimentary domain space. Second is the average tenure of the employees there… there is a lot of "been there, done that" in terms of industry expertise; that's key. And third, I would say the global nature of their business is key. They clearly have a strong presence in Ireland but also are very strong in North America and Turkey. Their size and scope also is important. They have 200 employees, so it's a good, manageable number that will help us scale our practice.
Consulting: This acquisition is one of many that Accenture has made over the last several years. How does ESP fit into the overall plan?
O'Halloran: ESP is very much aligned with some of our more recent acquisitions, including Pillar Technology and hardware engineering firm, Midtribe; and it very much compliments the acquisition, from a Life Sciences perspective, of LabAnswer in 2017. LabAnswer helps capture, manage, and analyze complex laboratory and scientific data. We are making this acquisition to help our clients digitize and optimize their manufacturing operations and that is surely going to expand our X.0 capabilities, as well as continue our on-going investment in Ireland. Ireland is a critical market. In February 2018, we acquired Rothco, a full service creative agency in Dublin and in 2017, we opened The Dock, Accenture's global innovation hub, which now employees over 300 people in Dublin.
Consulting:Can you talk to me a little bit about the potential for growth in this sector from Accenture's perspective?
O'Halloran: While I can't get into specifics on the practice and our growth, but what I can share is that we see this area as a very significant growth area. If you look at the Life Sciences industry overall and the pace of new products coming to market, there is incredible opportunity in this space. Also, the MES and manufacturing market is growing as those clients are really focused on digitizing their operations. The MES market grew 16 percent in 2015 and is estimated to reach $18 billion by 2022 at a 13 percent CAGR. Accenture's capabilities are very strong in the digital domain as well as the life sciences, so this move with ESP's strengths, particularly around pharmaceutical manufacturing, results in a nice synergy. Digital, Cloud and Security-related services now accounts for about 60 percent of our global revenue.
Consulting: What are clients demanding from Accenture and how does this acquisition help deliver on those client needs?
O'Halloran: Ultimately, I think it's about being able to develop, manufacture and deliver a product to patients more quickly and safely. We've actually partnered a great deal with ESP in the past so there's a real familiarity there. ESP was looking for Accenture to bring scale, and we were looking for just a bit more expertise from ESP. Since this deal has been announced, I think there's been a real positive reaction from all of our clients and that combination of scale and expertise is one of the big keys.
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