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Original Source: FD (FAIR DISCLOSURE) WIRE
MOSHE KATRI, ANALYST, COWEN & CO.: My name is Moshe Katri, and I follow both IT and business services at Cowen. I'm delighted to introduce our keynote speaker for today, Steve Rohleder, the Chief Operating Officer at Accenture.
The topics of Steve's presentation will include global business trends, the company's view of the changing global economy, and the outlook for IT services.
Steve's opening remarks will last for about 20 to 25 minutes. And then what we'll do, we'll just open it to Q&A. In the meantime, enjoy your lunch and I wanted to invite Steve to the podium.
STEVE ROHLEDER, COO, ACCENTURE: All right. All right. Well, continue eating. I don't know if I'll go for 20 minutes on my topics, but what I wanted to start with is just to give you a sense of some of the observations that our business is seeing across all of the 17 different industries and 48 different countries that we operate in.
One of the things that is really important with that kind of footprint is for you to monitor to what's happening, not only in what we call the triad of developed countries, U.S., UK, and Japan, but also what's happening in some of the developing countries.
And there's a popular belief out there that when you talk about developing countries, you're talking about the BRIC countries primarily, Brazil, Russia, India, and China.
But, I actually have broadened that to include what I believe is another tier of developing countries -- and that includes Mexico, Argentina, certainly Korea, Malaysia, and even further down the line, Vietnam, and maybe in five to ten years, sub-Sahara, Africa.
But, I wanted to talk a little bit about some of the economic trends.
For the past four or five years, we've observed some trends that are definitely impacting our clients and frankly, impacting the business that we operate in. And we characterize this under the umbrella of a multi-polar world.
If you think about four or five, six years ago, there was about somewhere on the order of 39% of the GDP in the world concentrated in the developed countries. And that trend has shifted remarkably in the last four or five years.
The trend is actually being facilitated by three things.
First of all, the advent of telecommunications and technology to be able to connect some of these developing countries to the developed countries, the relative openness of governance around the -- some of these developing countries, and the willingness to welcome business in the developing countries, and then third, a focus from the business community on expansion and expansion not only into developed countries, but as companies in these developed countries begin to mature and begin to scale, their interest in investment in the developed countries, as well as other developing countries.
So, we have this cross-pollinization, if you will, of companies in the developed world, the United States, UK, and Japan, investing in developed countries and companies that are maturing and growing in these developed countries beginning to reach out and buy companies, expand their footprint, expand their client base, take advantage of middle -- emerging, middle-class buyers in all parts of the world.
And I think this is really important because what it does is it has a very complex impact on the business that we're in. As we work with our clients, one of the things -- well, there's two big trends that are really driving the business that we operate in.
One trend is this global expansion, and it takes two forms. It takes the form of companies saying, "I want to scale by moving my operations or expanding my operations, product and services to other parts of the world."
And because of our footprint, we're really well positioned, I think, to be able to help those companies do that in these other countries.
Secondly, they -- there's been much more aggressive M&A action in every part of the world, not only in the United States, but if you look at Europe and the euro zone, what's happening in banking and the utilities industry, a lot of M&A activity that drives consulting and systems integration business.
We have companies in Latin America, reaching up into the United States and reaching into the European continent to also play this scale game.
And then ultimately, you have companies in China and India that are beginning to buy companies in the more developed parts of the world.
And I think you're seeing this in the -- not in chemicals, but in the mining and resources area, early stage. And I think we're going to see more and more of that.
It also has extremely big implications in terms of the war for talent. You're seeing companies say, "I want to also look at how I cut my operations, how I reduce my back-office costs, how I take non-core functions and move them to lower-cost locations."
And they're either doing that by moving their own operations to the -- to lower-cost talent locations, or they're saying, "I want to give that to somebody else to operate and operate on our behalf," which is driving the outsourcing business in Asia-Pacific and in Europe and in the United States.
So, on one hand, you have global expansion from a company standpoint to scale. On the other hand, you have companies that are also looking at cutting their costs and moving those to lower-cost locations.
And I think that we've hit a new normal here. I think in every -- the top of every CEO's agenda is how do I grow my business and how do …