NEEDY TEXANS' APPLICATIONS FAXED INTO A 'BLACK HOLE'

Accenture originated as the consulting division of Arthur Andersen. Its origin goes back to 1953, when GE asked Arthur Andersen to undertake a feasibility study about payroll processing and manufacturing automation using computers (GE had bought the first U.S. business computer for the Appliance Park manufacturing park, in Louisville). Joseph Glickauf was Arthur Andersen's project leader for the GE engagement and was responsible for the payroll processing automation, launching the era of data processing. Considered to be the father of computer consulting, Glickauf headed the Arthur Andersen administrative services division for 12 years.

In 1989, that division split from Arthur Andersen and began using the name Andersen Consulting. Both Arthur Andersen and Andersen Consulting consisted of groups of locally owned independent partnerships and other entities around the world, each in a contractual agreement with Andersen Worldwide Société Coopérative (AWSC), a Swiss administrative entity.

Through the 1990s there was increasing tension between Andersen Consulting and Arthur Andersen. Andersen Consulting was upset that it was paying Arthur Andersen up to 15% of its profits each year (a condition of the 1989 split was that the more profitable unit - AA or AC - paid the other this sum), while at the same time Arthur Andersen was competing with Andersen Consulting through its newly established own business consulting service line. This dispute came to a head in 1998 when Andersen Consulting claimed breach of contract against AWSC and Arthur Andersen. Andersen Consulting put the 15% transfer payment for that year and future years into escrow and issued a claim for breach of contract.

In August 2000, as a result of a conclusion of the International Chamber of Commerce, Andersen Consulting broke all contractual ties with AWSC and Arthur Andersen. As part of the arbitration settlement, Andersen Consulting paid over the sum held in escrow (then $1.2 billion) to Arthur Andersen. Andersen Consulting was required to change its name. Future scandals at Arthur Andersen showed this to be a prescient move. At the time the arbitration settlement was announced, Arthur Andersen tried to "spin" the decision saying it "won" $1.2 billion. CEO Jim Wadia was quoted as saying "I feel great about the decision...my partners and I are about to split 1 billion dollars!" But this proved to be a smokescreen to the real facts and just a "spin" job. That money was simply previous payments held in escrow, owed to Arthur Andersen anyway regardless of the decision. Perhaps most telling is that 4 hours after the arbitration decision, Wadia promptly and suddenly resigned. Objective business analysts and academics viewed the decision as a complete and total victory for Andersen Consulting.

On January 1, 2001, Andersen Consulting adopted its current name, Accenture. The word "Accenture" is derived from Accent on the future. Although a marketing consultancy was tasked with finding a new name for the company, the name "Accenture" was chosen by an employee from the Oslo office, as a result of an internal competition. Accenture says that the name should represent its will to be a global consulting leader and high performer. It also intends that the name should not be offensive in any country in which Accenture operates.

Accenture's clients have embraced the new name, and in reality planning for a new name was underway before the arbitration decision was announced (Andersen Consulting partners felt that the word "Consulting" in the name was a drawback, since the Firm was moving into non-consulting work such as outsourcing and ventures). Interestingly, internal Arthur Andersen emails in 2001 sent to all employees discussed future plans for Arthur Andersen to move ahead in the market with 3 names: Andersen Tax, Andersen Audit, now that they had ownership over the name, Andersen Consulting. Unfortunately for them, Arthur Andersen was never able to revive the "Andersen Consulting" name since it was brought down by the Enron scandal before doing so. Accenture is typically listed in the top 100 corporate brands, so the name change appears to have been a positive for the consulting Firm. The fact that it is disassociated from the Arthur Andersen name certainly proved to be a positive after the Arthur Andersen Enron scandal.

There have been some reports that the Accenture name change was simply the consulting firm's attempt to "hide" from the Enron scandal. This is not accurate given the timing of events. The split from Arthur Andersen was requested by the consulting side in 1998, and finally rewarded in 2000; the Enron scandal (starting with the reporting of the infamous "LJM Partnerships") did not occur until well into 2001, with the scandal culminating in the months after that.