OVUM. Douglas Hayward

Accenture has a new UK MD from this Friday (1 September), as part of a worldwide management reshuffle. David Thomlinson, currently worldwide chief of Accenture's Resources vertical market group, will replace current UK MD Lis Astall on Friday, the beginning of the 2007 financial year. Like Astall, Thomlinson is British and is based in the UK.

We understand that Astall is staying at Accenture. The company may also appoint a new joint leader for the troubled UK National Health Services (NHS) outsourcing project, since one of the current two leaders - worldwide Government market chief Marty Cole - is changing role and unlikely to retain personal responsibility for the project. Bob Frerichs, the other joint NHS leader, stays in place.

The changes come as part of a wide-ranging revamp of the worldwide leadership. Four of the five worldwide vertical-market operation groups have new leaders, and there are new leaders for worldwide outsourcing and business-consulting units.

Kevin Campbell, a rising star highly praised by worldwide CEO Bill Green, replaces his former boss Joellin Comerford as worldwide outsourcing chief. Mark Foster, a British executive currently in charge of the diverse Products vertical-market group, becomes group chief of business consulting and integrated markets. He replaces fellow Brit Tim Breene, who becomes Chief Strategy and Corporate Development Officer.

Marty Cole, currently chief of the Government vertical group, replaces Diego Visconti as chief of Communications, Accenture's biggest vertical market. Visconti becomes one of two International Chairmen of Accenture (the other being outgoing CFO Mike McGrath), essentially high-profile company ambassadors.

Gianfranco Casati replaces Forster as chief of Products, the fast-growing unit that covers areas such as retail, consumer goods, travel and transport. Lisa Mascolo replaces Cole as Government chief. Lastly, Sander van't Noordende becomes chief of the Resources vertical group (which includes utilities, chemicals and energy), replacing Thomlinson.

Comment:

It's not unusual for Accenture to reshuffle senior executives in late August, and it's mostly doing so from a position of strength. Accenture has best-in-class organic growth and profitability, which we see as a result of many factors, including the skilful way it balances high-price business and IT consulting with offshore-enabled systems integration and outsourcing services. It's reached this mix without a major acquisition - as Green once put it, 'we built this company brick by brick' - so it's more "joined up" than many competitors with similarly wide service portfolios.

But it's not perfect. Europe is under-performing (7% organic growth in Q3, versus 14% for the US), and the UK is having a terrible time. Revenues have declined over the first three quarters of FY 2006, thanks in part to the NHS fiasco.

And it's not just the NHS. A mega-deal drought left Accenture UK without a big revenue-growth driver over the last year (it's not being paid yet for much of its NHS work), although recent wins such as the Unilever HR outsourcing deal will help here. Preoccupied with big clients like the NHS, Accenture UK also took its eye off the market for short-term standalone consulting engagements just as the project-services market recovered strongly.

We nevertheless think the UK is over the worst. Accenture is often at its most aggressive when bouncing back, as we've seen with the success of its Grow America campaign this financial year.