netrashetty
Netra Shetty
ACN, Inc. is a Multi-level marketing (MLM) company that provides telecommunications and other services and also provides independent representatives an opportunity to form a home-based business. Based in Concord, North Carolina, USA, ACN began operations in the U.S in 1993 as American Communications Network. It extended operations to Europe in 1999 and to Asia-Pacific in 2004, and now operates in 23 countries, on 4 continents.[5] As a reflection of its international operations, it changed its name to just the initial letters ACN.[citation needed] The company is a member of the Direct Selling Associations in North America [6][7] and Europe.[8] In the United States, ACN is an accredited member of the Better Business Bureau, where it currently has an A rating.[9] In 2010, ACN was placed #21 on Direct Selling News' Global 100 list of the top 100 direct selling companies worldwide
Business & Financial Metrics[2]
In 2009, ACNgenerated a net income of $1.59 billion on revenues of $23.17 billion. This represents a 6.0% decrease in net income and a 8.5% decrease in revenues from 2008, when the company earned $1.69 billion on $25.31 billion in revenues.
Business Segments[3]
ACNoffers its expertise to clients in 17 industries. These industries are divided into five five operating groups as outlined below.
Contents
• 1 Company Overview
o 1.1 Business & Financial Metrics[2]
o 1.2 Business Segments[3]
o 1.3 Services
• 2 Trends and Forces
o 2.1 Skilled Talent is Becoming Expensive
o 2.2 Offshore Competition Will Weaken ACN’s Margins
o 2.3 Large Exposure to Developing Markets: Potentially High Risk or Reward
• 3 Competition
o 3.1 Management Consulting
o 3.2 Systems Integration and Technology
o 3.3 Outsourcing
• 4 Footnotes
Communications & High Tech - Communications, Electronics & High Tech, Media & Entertainment, 20.8% of total revenue
Financial Services - Banking, Capital Markets, Insurance, 18.7% of total revenue
Products - Automotive, Consumer Goods & Services, Health & Life Sciences, Industrial Equipment, Retail, Transportation & Travel Services, 23.9% of total revenue
Public Service - 12.9% of total revenue
Resources - Chemicals, Energy, Natural Resources, Utilities, 16.7% of total revenue
Services
ACNoffers its clients three types of consulting services.
Management Consulting ACNoffers its clients tradition Management Consulting services similar to McKinsey & Co or The Boston Consulting Group. Through management consulting ACNtries to improve the performance of clients through analysis of their business model and any business challenges they may face in the execution of the model. This is often referred to as strategic consulting. ACNoperates its management consulting division under six separate service lines: Customer Relationship Management, Finance & Performance Management, Talent and Organization Performance ,Strategy, Supply Chain Management, and Process & Innovation Performance.
Systems Integration and Technology ACNoffers its clients technology related services including system integration and technology consulting similar to International Business Machines (IBM). ACNassists clients in incorporating new technologies in order to increase efficiency in their operations.
Outsourcing ACNalso provides its clients with extensive Business Outsourcing services. Through outsourcing ACNaims to allow its clients to focus on their area of expertise by allowing outside firms to deal with non-essential areas of their operations.
Trends and Forces
Skilled Talent is Becoming Expensive
As a consulting firm ACN’s most important resource is its workforce. Given ACN's focus on technology, its success is especially dependent on its ability to hire and retain technically skilled individuals, such as engineers, researchers, programmers and accountants. Moreover, the company has emphasized the growth of its labor force in India. Over the past ten years as companies have moved to India, the demand for labor has driven costs up. Continued salary inflation, will make ACN’s continued rapid expansion more difficult. It will also place pressure on the company's margins.
Offshore Competition Will Weaken ACN’s Margins
ACNfaces growing competition from Off-shoreservice providers whose revenues have grown upwards of 30% a year. Such companies offer similar services at extremely competitive prices. For example, the average cost per employee at Infosys Technologies (INFY) is $34,000 while ACNhas an average employee cost $110,000. While these numbers are skewed by ACN’s upper level management in the United States, they reflect the large advantage of Indian firms. These firms compete with ACNmostly outsourcing and systems integration areas.
Large Exposure to Developing Markets: Potentially High Risk or Reward
ACNis more exposed to developing markets than most of its large American competitors. One third of Accentures's workforce is located offshore while the percentage for International Business Machines (IBM) is 18%,Electronic Data Systems (EDS) is 12%, Computer Sciences (CSC) is 9%.[4] By placing a high proportion of its operations in developing countries, ACNcan be hit hard by the unpredictability of government regulations of the private sector.
Competition
ACNfaces a range of competitors across its three main services areas.
Management Consulting
In Management Consulting, ACNcompetes with traditional strategic consulting groups like McKinsey & Co. and The Boston Consulting Group.
Systems Integration and Technology
In technology services, ACNfaces large competitors like International Business Machines (IBM), specifically its Global Services Business Unit. IBM leads ACNby a large margin in terms of revenue, profitability, and scale. Other smaller competitors include Electronic Data Systems Corporation Electronic Data Systems (EDS) andComputer Sciences (CSC).
Business & Financial Metrics[2]
In 2009, ACNgenerated a net income of $1.59 billion on revenues of $23.17 billion. This represents a 6.0% decrease in net income and a 8.5% decrease in revenues from 2008, when the company earned $1.69 billion on $25.31 billion in revenues.
Business Segments[3]
ACNoffers its expertise to clients in 17 industries. These industries are divided into five five operating groups as outlined below.
Contents
• 1 Company Overview
o 1.1 Business & Financial Metrics[2]
o 1.2 Business Segments[3]
o 1.3 Services
• 2 Trends and Forces
o 2.1 Skilled Talent is Becoming Expensive
o 2.2 Offshore Competition Will Weaken ACN’s Margins
o 2.3 Large Exposure to Developing Markets: Potentially High Risk or Reward
• 3 Competition
o 3.1 Management Consulting
o 3.2 Systems Integration and Technology
o 3.3 Outsourcing
• 4 Footnotes
Communications & High Tech - Communications, Electronics & High Tech, Media & Entertainment, 20.8% of total revenue
Financial Services - Banking, Capital Markets, Insurance, 18.7% of total revenue
Products - Automotive, Consumer Goods & Services, Health & Life Sciences, Industrial Equipment, Retail, Transportation & Travel Services, 23.9% of total revenue
Public Service - 12.9% of total revenue
Resources - Chemicals, Energy, Natural Resources, Utilities, 16.7% of total revenue
Services
ACNoffers its clients three types of consulting services.
Management Consulting ACNoffers its clients tradition Management Consulting services similar to McKinsey & Co or The Boston Consulting Group. Through management consulting ACNtries to improve the performance of clients through analysis of their business model and any business challenges they may face in the execution of the model. This is often referred to as strategic consulting. ACNoperates its management consulting division under six separate service lines: Customer Relationship Management, Finance & Performance Management, Talent and Organization Performance ,Strategy, Supply Chain Management, and Process & Innovation Performance.
Systems Integration and Technology ACNoffers its clients technology related services including system integration and technology consulting similar to International Business Machines (IBM). ACNassists clients in incorporating new technologies in order to increase efficiency in their operations.
Outsourcing ACNalso provides its clients with extensive Business Outsourcing services. Through outsourcing ACNaims to allow its clients to focus on their area of expertise by allowing outside firms to deal with non-essential areas of their operations.
Trends and Forces
Skilled Talent is Becoming Expensive
As a consulting firm ACN’s most important resource is its workforce. Given ACN's focus on technology, its success is especially dependent on its ability to hire and retain technically skilled individuals, such as engineers, researchers, programmers and accountants. Moreover, the company has emphasized the growth of its labor force in India. Over the past ten years as companies have moved to India, the demand for labor has driven costs up. Continued salary inflation, will make ACN’s continued rapid expansion more difficult. It will also place pressure on the company's margins.
Offshore Competition Will Weaken ACN’s Margins
ACNfaces growing competition from Off-shoreservice providers whose revenues have grown upwards of 30% a year. Such companies offer similar services at extremely competitive prices. For example, the average cost per employee at Infosys Technologies (INFY) is $34,000 while ACNhas an average employee cost $110,000. While these numbers are skewed by ACN’s upper level management in the United States, they reflect the large advantage of Indian firms. These firms compete with ACNmostly outsourcing and systems integration areas.
Large Exposure to Developing Markets: Potentially High Risk or Reward
ACNis more exposed to developing markets than most of its large American competitors. One third of Accentures's workforce is located offshore while the percentage for International Business Machines (IBM) is 18%,Electronic Data Systems (EDS) is 12%, Computer Sciences (CSC) is 9%.[4] By placing a high proportion of its operations in developing countries, ACNcan be hit hard by the unpredictability of government regulations of the private sector.
Competition
ACNfaces a range of competitors across its three main services areas.
Management Consulting
In Management Consulting, ACNcompetes with traditional strategic consulting groups like McKinsey & Co. and The Boston Consulting Group.
Systems Integration and Technology
In technology services, ACNfaces large competitors like International Business Machines (IBM), specifically its Global Services Business Unit. IBM leads ACNby a large margin in terms of revenue, profitability, and scale. Other smaller competitors include Electronic Data Systems Corporation Electronic Data Systems (EDS) andComputer Sciences (CSC).
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