Andersen Consulting

Andersen Consulting
William Murphy · CC BY-SA 3.0 · source
Name	Andersen Consulting
Type	Professional services
Fate	Renamed Accenture in 2001
Predecessor	Arthur Andersen
Successor	Accenture
Founded	1989 (as independent business unit)
Headquarters	Chicago, Illinois, United States
Key people	[See Corporate Structure and Global Operations]
Industry	Management consulting, Information technology

Andersen Consulting Andersen Consulting was a multinational professional services company that emerged from the consulting arm of Arthur Andersen LLP and later became a separate entity that rebranded as Accenture. It operated across North America, Europe, Asia, and Latin America, providing system integration, management consulting, and outsourcing services to clients in banking, telecommunications, and manufacturing. The firm played a significant role in the global expansion of information technology services during the late 20th century and intersected with major developments involving IBM, SAP SE, and Microsoft.

History

Andersen Consulting's roots trace to the professional services divisions of Arthur Andersen LLP and earlier associations with firms involved in Arthur E. Andersen’s legacy. During the 1970s and 1980s its consultants engaged with projects for General Electric, Procter & Gamble, Citigroup, and Ford Motor Company while navigating competitive pressures from McKinsey & Company, Bain & Company, Boston Consulting Group, and Deloitte Consulting. The organization formalized as a distinct global business unit in 1989 and expanded through engagements with Nokia, British Telecom, Deutsche Bank, and Sony. Tensions over governance, profit sharing, and strategic direction with Arthur Andersen LLP culminated in arbitration in the late 1990s, reshaping the firm’s identity and leading to a corporate separation that preceded the renaming to Accenture.

Services and Business Model

Andersen Consulting provided a portfolio of services including management consulting, technology consulting, outsourcing, systems integration, and business process reengineering for clients such as Bank of America, Shell plc, BP, and American Airlines. Its business model combined project-based advisory engagements similar to McKinsey & Company with ongoing managed services akin to offerings from EDS and IBM Global Services. Andersen Consulting pursued large enterprise resource planning implementations with vendors like SAP SE and Oracle Corporation, delivered custom mainframe and client–server solutions, and offered transformational programs for Siemens, ABB, and Rolls-Royce Holdings.

Relationship with Arthur Andersen

The relationship between the consulting unit and Arthur Andersen LLP was structured as an internal global business with shared heritage but distinct commercial activities, intersecting with issues experienced by other professional networks such as PricewaterhouseCoopers and KPMG. Disputes arose over revenue allocation, branding rights, and partner compensation amid growth in projects for Enron Corporation and complex audit-client boundaries highlighted by cases involving WorldCom and other major corporations. The governance dynamic echoed historical fissures seen in professional partnerships like those in Deloitte Touche Tohmatsu and prompted comparisons to separations such as the split between Cap Gemini and legacy entities.

Legal Disputes and Rebranding to Accenture

Prolonged arbitration between the consulting business and Arthur Andersen LLP culminated in a verdict by the International Chamber of Commerce's arbitral panel that ordered structural changes and affirmed the consulting unit’s independence, a process that paralleled high-profile corporate restructurings involving AT&T and Siemens AG. Following arbitration outcomes, the firm launched a global rebranding campaign culminating in the 2001 adoption of the name Accenture to resolve trademark and identity issues and to distinguish itself from Arthur Andersen LLP; the rebrand followed legal disputes similar to those seen in cases like PepsiCo versus Kraft Foods over brand assets. The transition also occurred in the context of regulatory scrutiny exemplified by inquiries involving Securities and Exchange Commission enforcement actions affecting professional service firms.

Corporate Structure and Global Operations

Andersen Consulting operated through regional units covering North America, Latin America, Europe, Middle East and Africa, and Asia Pacific, with major delivery centers and offices in Chicago, New York City, London, Dublin, Bangalore, Sydney, and Tokyo. Leadership comprised partners drawn from backgrounds at Harvard Business School, Wharton School, and INSEAD, collaborating with practice leaders experienced with SAP SE, Oracle Corporation, Microsoft Corporation, and Cisco Systems. The firm’s operating model emphasized global delivery networks, alliance relationships with vendors such as IBM, and recruitment pipelines from institutions like Massachusetts Institute of Technology and Stanford University.

Controversies and Criticism

Andersen Consulting faced criticism tied to conflicts of interest inherent in shared heritage with Arthur Andersen LLP, echoes of controversies involving Enron Corporation and audit-practice separations, and scrutiny over consulting engagement outcomes similar to debates surrounding McKinsey & Company and Bain & Company. Critics highlighted matters of transparency in large outsourcing contracts with entities like British Airways and HealthSouth Corporation, and the firm was discussed in analyses of consulting influence in policy and corporate governance akin to debates involving Boston Consulting Group and Oliver Wyman. The firm’s separation and rebranding were also examined in academic and media critiques like coverage in The Wall Street Journal, The New York Times, and industry journals focused on Fortune 500 advisory relationships.

Category:Consulting firms Category:Accenture