Accenture plc (ACN)

Investor Day 2014

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Oct 7, 2014

Audio cast has begun. Ladies and gentlemen, please welcome Managing Director, Head of Investor Relations, Accenture, K. C. McClure. Good morning. I'm Casey McClure, Managing Director, Head of Investor Relations. It's my pleasure to welcome all of you who've joined us here today as well as those of you who are joining us on the webcast. The theme of our conference today is driving differentiation for sustainable growth. We've an excellent program lined up for you today, and I'm pleased to say we have some of our top leaders here to take you through it. Let me remind you that some of the matters we will discuss in today's conference, including our business outlook, constitute forward looking statements and as such are subject to both known and unknown risks and uncertainties, including but not limited to, those factors set forth in our Risk Factors section of our Annual Report on Form 10 ks and quarterly reports on Form 10 Q and other documents filed with or furnished to the Securities and Exchange Commission. These risks and uncertainties could cause actual results to differ materially from those expressed or implied in the presentations and not a guarantee of our future performance. As always, Accenture assumes no obligation to update any statements made in these presentations. I would also like to remind you that we will not be providing you with an update or making comments related to our Q1 of fiscal 2015. Also note, you will be able to find all materials for today's sessions, including a reconciliation of non GAAP measures posted to the Investor Relations section of our website. We expect to have this posted over the next few days. So once again, thank you for joining us today. And it's now my pleasure to introduce our Chairman and Chief Executive Officer, Pierre Nontin. Thank you, Casey. Good morning. Good morning. I'm delighted to welcome you to our Investor and Analyst Conference. It's great to have so many of you with us here in New York. And I also want to welcome those of you who are joining us this year via the audio cast. I would also like to welcome 2 of our Board members who are joining us in New York, Mats Magner, our Lead Director and Wolf Andre Schimmelmann. And I would like to thank you as well for the continuous support you're bringing to Accenture and your unique involvement to make our company a great company. Thank you to both of you. Our thing today is driving differentiation for sustainable growth. And as always, each word is extraordinary important and this is what we're going to make live this morning for you. And I'm pleased to be joined by several members of the Accenture leadership team who will bring this team to life this morning. Today, what it is we're going to do, we're going to provide an update on the actions we have taken and the investments we've made to do what to enhance our capabilities and to make Accenture even more relevant and differentiated and competitive in the marketplace. Let me start by providing some context around the environment we are operating in. At the macroeconomic level, there are some signs of incremental improvement in the global economy, but there is there are still pockets of uncertainty, definitely pockets of volatility as well, especially in the emerging market, we all know that and in the eurozone. And now it is pretty clear that it will take more time for the global economy to return to higher growth. Looking at our own industry, IT and Professional Services, definitely we could say that the IT Services sector has undergone a very significant transformation over the last few years. With the rise of disruptive technologies and especially the impact of digital and cloud technologies, we are seeing changes like never before. Everything is more connected, more interactive, more automated and moving at a pace that is absolutely unprecedented. This is also time of tremendous transformation and reinvention for our clients and for the industries in which they operate. In this fast changing environment, we see the market becoming more and more polarized around 2 major theme. Of course, we could have selected much more. I think the trend such as the globalization, the regulation and some others are still there. But when it comes to clients, it's so obvious now that the market has polarized around 1 digitization to create unique competitive advantage and drive new sources of value and on the other side of the spectrum rationalization to create productivity and efficiency gains. And at the same time, we continue to see demand for large scale transformation programs and more and more clients and more and more clients of Accenture are seeking solutions that provide tangible business outcome delivered as a service. And we will come back on this as it is a very profound evolution of the market environment. So we are clearly operating in an environment defined by change. And for Accenture, change is good. Change creates opportunities to drive growth. Against that backdrop, let me share with you the significant actions we have taken and the investments we have made to build and enhance our portfolio of business. We created Accenture's strategy, a unique capability and the first in the market to bring together business strategy and technology strategy equally and at scale. We launched Accenture Digital by combining our capabilities in Accenture Interactive, Accenture Analytics and Accenture Mobility to create the world's largest end to end digital capability with now 28,000 people. We formed Accenture Operations, bringing together our business process capabilities with our infrastructure and cloud services to offer our clients an even more compelling value proposition running key operations as a service and again at scale. In Accenture Technology, we further enhanced our global delivery network recruiting significant talent and investing to build intelligent tools to increase efficiency and productivity. We also continue to harness innovation through our technology labs and are playing a leading role in the technology ecosystem. And finally, we infused even more talent into our 5 operating groups to enhance our capacity to serve clients and to more quickly assemble integrated teams with specialized skills, further strengthening our management and technology consulting capabilities and making us even more relevant to our clients. At the same time, we have invested $1,500,000,000 in acquisition over the last 2 years to enhance our capabilities and we will continue to use targeted acquisition to scale more rapidly in key growth areas. And we are investing in talent as well to attract, develop and retain the specialized skills we need to be relevant to our clients' changing needs. In fiscal year 2014, we hired about 80,000 people at Accenture, including thousands of people with deep expertise such as PhDs, data scientists, web developers, digital marketers and big data specialists. So when I reflect on the actions we have taken, we have clearly moved with speed on one hand and agility on the other hand to capture opportunities in the market. And we have taken all these actions all these actions without any disruption to our business. At Accenture, everything we do is grounded in our long term vision for market leadership, which we call ambition 2020. This is all about our unique positioning as the leading independent global professional services company, providing end to end services to Global 2,000 clients to help them transform and achieve tangible and measurable results. And we have a relentless focus on executing against that vision at speed and at scale across several dimensions. 1st and foremost is our client leadership. At Accenture, it all starts with our clients. We operate at the heart of our clients' businesses, helping address their most complex strategic issues. We serve more than 3 quarters of the Fortune Global 500 and 89 of the Fortune Global 100. We have built long and enduring relationships. All of our top 100 clients have been clients for at least 5 years and 95 had been clients for at least 10 years. And looking at our diamond clients, something as you know which is very close to my heart and something which is extremely important in Accenture's strategy, which as you know are our largest client relationships. In fiscal year 2014, we added 28 new diamond clients across all 5 operating groups and geographic regions, which bring us to a net total of 141 Diamond clients at Accenture, an all time high. This is an incredible track record and it speaks to our unique ability to understand our clients' issues and opportunities. 2nd is our industry leadership. We are known for the depths of our industry knowledge and today more than 187,000 Accenture people have certified industry skills or are aligned with a specific industry. And we are taking our industry differentiation to the next level with innovative business services, which combine our industry expertise and assets with our capabilities to provide highly differentiated end to end services for clients to deliver tangible outcomes, something we believe only Accenture can do. I'm thinking about Accenture Video Services, Accenture Post Trade Processing Services, Accenture Credit Services, Accenture Procurement Services, just to name a few. And with our technology ecosystem partners, we jointly develop unique industry solutions including with SAP in the oil and gas industry and with Oracle in health. 3rd is our technology leadership. Early on, we identified the potential of digital and we've vested ahead of the curve to help our clients compete in the new digital world and to establish a leadership position for Accenture. In fiscal year 2014, we delivered double digit revenue growth in our digital business and with $5,000,000,000 in revenues today in digital, it is approaching the size of our ERP business, which is about a $6,000,000,000 business. And when it comes to delivery, the scale and scope of our global delivery network is unmatched in the marketplace with 205,000 people working from more than 50 delivery centers and at client sites around the world to deliver innovative high quality industry specific solutions to our clients. We also have a very privileged position in the technology ecosystem at the intersection of business and technology. We are the number one partner of key players including SAP, Oracle, Microsoft, HP and Salesforce dotcom. And more recently, we formed new partnerships with GE and with Siemens in the Internet of Things. And 4th is our geographic leadership. We have a broad global footprint serving clients in more than 120 countries around the world. We are both extremely global, serving our clients consistently anywhere they operate. And we are extremely local, bringing local execution and market relevance. Looking at our geographic performance in fiscal year 2014, we were pleased with the strong revenue growth we delivered in many of the largest countries in which we operate. In the United States, I was particularly pleased with our 10% revenue growth for the 4th quarter and 8% revenue growth for the full year. Thank you, Steve. And I'm even more pleased with our sustained performance about the past 4 years in the U. S. Where we have consistently delivered high single digit or double digit revenue growth. In Europe, in Europe, where the economic environment continues to be difficult, we performed very well in many countries including France, Italy, Germany and the United Kingdom and in Asia Pacific. In Japan, which is the largest country in the region, we delivered very strong double digit growth for both the 4th quarter and the full year. In fiscal year 14, we aligned our organization around 3 geographic regions: North America, led by Steve Rollider here in the room Europe, going to be coordinated by UAA, our Chief Operating Officer and Growth Markets, which is going to be led by Gianfranco Cassati. And Growth Markets will include Asia Pacific, Africa, Latin America, the Middle East, Russia and Turkey. And we've put 3 of our most senior leaders in place with the accountability to maximize growth in these regions, right Steve? Right. Excellent. And finally, we continue to run Accenture as a high performance business. We have a rock solid balance sheet, no debt and a cash balance of almost $5,000,000,000 at the end of fiscal year 2014. Our financial strength enables us to invest in the business while delivering a very strong return to shareholders. We continue to manage our business with rigor and discipline to increase our efficiency, enhance our competitiveness, so that we can continue to achieve our ultimate goal of delivering again sustainable profitable growth over the long term. So when I step back and look at our performance in fiscal year 2014, especially our strong revenue growth in the second half of the year, we have clearly demonstrated that we're executing the right growth strategy and we are gaining market share. We are entering fiscal year 2015 with momentum in our business and I'm confident that we are well positioned to drive value for both our clients and our shareholders. So let's get started with the rest of our agenda for today. We are extremely pleased to have this time with you and I hope that when you will hear from our team, you will share our passion, my passion and excitement for Accenture and all of the work we are doing to make our company even greater. Let me now introduce Paul Dorote, our Chief Technology Officer. Paul is one of our brightest leader by definition and by design. And Paul's job is to make sure that we are always very well positioned to take advantage of disruptive technologies for the benefit of our company and for the benefit of our clients. Over to you, Paul. Thanks, Pierre. Good morning. These are great times for a techie like me. There's never been a time of greater excitement or disruption in information technology than the period that we're in right now. And the disruption is creating great opportunities where technology meets business And that intersection, as Pierre said, is the heart and soul of Accenture. We lead in this space now and I'm confident that we're in great position to extend our leadership as this next wave of technology disruption moves through the market. Let me tell you why, but first let's step back and look at the scale and pace of the change that's facing every business today. Think about some facts. There's 3,000,000,000 people connected to the Internet, but 4,000,000,000 people, the rest of the planet will come online soon. And it's not just about people, think about 200,000,000,000 devices from sensors to machines all connected to the Internet. We're well on the way to that future. And think about the pace in the 60 seconds that it takes me to say this sentence, there'll be 265,000 Snapchats, 2,500,000 Google searches and 205,000,000 e mails sent all in 60 seconds. And what does all that mean for Enterprise IT and the businesses that we serve? First, it's a connected world and everything that can be connected will be connected. 2nd, data is the currency of the new economy, much like energy and natural resources in the industrial economy. And third, businesses in IT will be intelligent, marked by highly automated processes, robotics and artificial intelligence. In other words, business is changing like it never has before. It's a time of tremendous transformation for the technology industry and for all of our clients. My job as Chief Technology Officer is to look ahead, understand these changes and make the right investments that Accenture is positioned to lead our clients and the industry through this tremendous change. In my role, I drive our technology strategy, our vision, our research and development, our alliances and partnerships and our new technology businesses. Through all this, we have a clear view of what the future looks like and it's capturing our technology vision where we say every business is a digital business. This vision resonates with our clients, but more importantly sets the stage for how we work with our clients leveraging the end to end capabilities of Accenture to help them transform for this new environment. This includes clients like Unilever, Vodafone, BMW and 100 more that you know very well. We're harnessing these technology trends and helping them transform so that they can achieve their vision. They know that their success depends upon it. So we have a clear view of the future, but that's not enough. We also must continually change to be relevant as the market changes. And that gets to another key part of my job as CTO, which is making the right investments so that we're always positioned to invent our own future. In FY 2014 alone, we invested roughly $800,000,000 in key new technology capability. Let me describe how this works. It all starts with research and development and the heart of R and D at Accenture is our Accenture Technology Labs. Our labs are anchored in Silicon Valley with key research hubs in Europe, China and India. Our researchers look out 3 to 5 years to invent and commercialize new technologies that are going to have a major impact on business. Since we've been at this for years, we've mastered the commercialization process. It's not enough to just come up with ideas. We just need to impact our business at scale. Let me give you an example of this. In our cloud business, we were doing research in cloud computing in our labs over 15 years ago before the term cloud computing existed. As cloud matured, we packaged together our intellectual property, our research and our patents and formed an asset called the Accenture Cloud Platform that we've talked to you about before. The Accenture Cloud Platform has been rated as a leader in the cloud orchestration and brokering market and has been a key part of our growth in our early leadership in the cloud market. The reason we're able to get ahead and get this leadership position is because of our investments in R and D. Another way that we stay in front of the future is with open innovation. With open innovation, we leverage the global scale and position that we have at Accenture and multiply it by the power of all the innovation happening in the ecosystem. We partner with global venture capital firms, with incubators, startups and accelerators, with the R and D arms of major technology companies and with leading research universities. So we're doing joint R and D, research and development with SAP and Microsoft and many others with universities such as MIT, Stanford and IIT in India and we screened thousands of startups and are working with hundreds of them. Let me give you a powerful example of Open Innovation Network. Our researchers identified a very promising early stage startup that pioneered a headset with very innovative amazing brainwave scanning technology that could literally read the electromagnetic signals coming from your thoughts. Our researchers saw the potential to apply this in medical applications and took the technology to Philips Healthcare and we jointly worked with Philips to put together a proof of concept targeted at patients with ALS or Lou Gehrig's disease. With the proof of concept, patients that have ALS using the headset could literally use their mind after they lost complete muscle control to control TV, music, heating and cooling, air conditioning and medical equipment, giving those patients what they desired most, which is some control that they lost over their environment. Not only is there a great business impact that we've seen in this, but it truly shows the power of Accenture to change the way the world lives. Another current and very important example of how we invest to create our future is in the emerging area that we've coined the Industrial Internet of Things. You've all heard about the Internet of Things or IoT. The new term, the Industrial Internet of Things refers to the universe of intelligent products, processes and services that are connected with each other and with people over the Internet. Researchers in our labs have been working with these technologies for years, technologies like 3 d printing, drones and robotics. And they're already generating patents, pioneering client work and new business opportunities. In fact, our Head of R and D, Prith Banerjee is a recognized leader in this space and was elected recently to the steering committee of the Industry Wide Industrial Internet Consortium in helping shape the future of this important area. Beyond R and D, we've invested in other ways in the Industrial Internet of Things in partnerships with GE in areas like intelligent pipelines and avionics with Siemens and smart grid. We've also acquired companies in this area such as EvoPro for industrial controls and we've created business services such as Accenture Smart Grid Services, Accenture Connected Health and Accenture Connected Vehicles that are having real impact in the marketplace right now. So with all this innovation that I just talked about, you can see it's not Accenture. We don't just follow the trends. We're investing in innovation and deep industry insight, so we can shape the market and invent our own future. Another strength we leverage that Pierre talked about is our leadership position in the ecosystem. It's an essential part of our growth formula. We're in the top position with the leading companies in technology as well as the emerging technology innovators. Whether measured in revenue, analyst rankings or partner of the year awards, Accenture is in the top position with the most important companies in the ecosystem. A great example is our SAP business, which continues to be a model in the industry and the envy of our competitors. We're the number one provider of SAP solutions with the closest relationships that we can form unique partnership with them and form unique solutions combining their products with our industry and technology expertise to create differentiated solutions that our clients value. But we're not resting on our laurels. As all of you know, SAP's business is changing dramatically. So we're investing for growth in areas where SAP is growing and we're the market leader in cloud and HANA. With SAP Cloud, we were named SAP's Cloud Partner of the Year and we have well over 2,000 people delivering solutions on SuccessFactors and Ariba, which is far more than any other competitor. We're also the market leader in HANA. We've completed 100 projects on HANA and have 75 underway, which we understand is double our nearest competitor in the HANA market. And our business with Microsoft continues to be a great success story as well. One of my roles is chairing the Board of Directors of Avanade, which is our joint venture company with Microsoft. Avanade is approaching $2,000,000,000 in revenue and has had double digit growth and is viewed as one of the most successful joint ventures in the technology business. Avanat is a clear market leader in Microsoft Services and is rapidly growing in digital and cloud services with a blue chip list of clients that includes companies like Delta, Hyatt Hotels and Microsoft themselves. These are only two examples of the top relationships that we have with technology leaders. I can tell similar stories about our great position with salesforce.com, EMC, HP, Oracle and many others. We're also in the number one position. But the real point I'd like to get across is why is the ecosystem so important to us? The reason is that the revolution in technology that I talked about will continue and it will continue to disrupt the technology ecosystem, But Accenture is in a great position across all that disruption for two reasons. First, we've got the closest relationships with the most important companies in the ecosystem and we can structure unique partnerships as I described to get a differentiated advantage of the market. And second, at the same time, we're diversified across the ecosystem. So if the ecosystem is disrupted, we can take advantage of the independent position that our clients value and move and evolve our position in the ecosystems that we're always positioned to deliver the best industry solutions to our clients, powered by the best technology from the best partner at the right time. So I've talked about where we see technology going, how we invest to create our future and why we can create unique value through the ecosystem. All of this allows us to innovate at scale. We're better positioned for the future than ever and we see great opportunities ahead. Let me talk about 4 areas of our business where we're innovating at scale, cloud, digital, intelligent computing and the next generation of ERP. We've grown our cloud business to over $2,000,000,000 in revenues with double digit growth in the past year. Let me digress for a minute to talk about a question that may be on your mind, which is a comparison of our cloud based software as a service projects with our on premise projects. Over the past year, we've seen the trend continue where the software as a service projects are increasing in size and approaching the size of our on premise projects. The reason for this is that as cloud matures, our clients are undertaking more ambitious business projects powered by the cloud and have more ambitious business outcomes. They need more of the end to end services that Accenture offers to achieve those outcomes and that's leading to the increase in project size and continuing the trend we've talked about previously, which is a positive trend for our business. We're innovating at scale in our digital business, harnessing all the technologies and the resulting business change. You heard about that from Pierre and you'll hear more about it in a few minutes. I talked about the macro trend of intelligence earlier. We're aggressively innovating and driving advanced automation and cognitive technology into our delivery and operations businesses, leveraging very advanced automation techniques and cognitive technologies to shift the game to focus on productivity rather than simply on cost. And our ERP business is not going away. There's a next generation of ERP that's characterized by digital digitally enabled solutions, agile delivery and faster implementation times. It's a very different ERP, something we call high velocity ERP and we believe that the new needs of digital businesses will be a catalyst for demand in this new form of ERP called high velocity ERP. So let me wrap up by coming back to where I started. We're in the midst of a tremendous change in enterprise technology. At Accenture, we see the future and it's coming very fast. I'm excited about the opportunities ahead and confident that we're positioned for continued leadership as the market evolves. The heart and soul of Accenture is at the intersection of business and technology and the tremendous changes that we're seeing create the opportunity for us to work with the leading businesses and governments around the world to help them change to be more successful in this new environment. And that's exactly what we're doing, providing comprehensive end to end services that only Accenture can provide strategy, digital, technology and operations to help our clients be more successful. And that's what you'll hear about next. Back to you Pierre. Thanks a lot to Paul and excellent presentation. Just a minute with me. I mean it's as you might imagine it is by design that we decided Paul and I and I would say the CTO and the CEO to co intro the session. Because at Accenture we have a strong belief that now business and technology are totally intertwined and you can't craft and deliver a business strategy without now technology underpinning. And to recognize the role of technology at Accenture, we elevated the role of CTO this last year. Now Paul, our CTO is reporting directly to me and he's one of the prominent member of our new Global Management Committee. So and of course he's the best CTO of the industry. Thanks, Pierre. All right. Now let's move to our next segment driving differentiation across the dimensions of our business. And it's my pleasure to invite on stage, so please join me, Mark Nikram, Mike Sutcliffe, Bhaskar Ghosh here, Mike Salvino, the leaders of Accenture Strategy, Accenture Digital, Accenture Technology and Accenture Operation. I could have called them as well the 4 Fantasticks, but maybe jury is still out. So we'll see after their presentation. They are leading please take a seat. I mean they are leading our 4 growth platform. But what you're going to see is these 4 growth platforms are quite new and they're going to share with you what it is we are doing different today. What's the point of our growth platform and what it is we want to achieve? At the end of the day, with our growth platform, we are building world class capabilities at scale to provide our end to end services to our clients from strategy to digital to technology delivery and then we operate on their behalf. And so with doing so we can deliver superior value to our clients. So we're going to start with Accenture strategy and Marc Nikram. And you will see, stay tuned, what it is we want to achieve with Accenture Strategy is quite radical. With Accenture Strategy, we are creating what I would call the first strategy practice for the future by bringing together our best industry and technology strategy into a single capability. So Mark, over to you. Great. Thank you, Pierre, and good morning, everyone. In the world of strategy today, it's about the future. And in the future, technology is the disruptor, as you heard Paul say. It's changing our clients' competitive landscapes, their opportunities and what they're asking for from their consultants. As you just heard from Paul, this plays directly to Accenture's strengths. It's time to create a new kind of capability that's going to be highly disruptive to the strategy consulting business also. As you walked into the auditorium today, I hope you noted the Accenture strategy advertising. One of my favorites is we added technology to strategy, you get the multiplier effect. In the next few minutes, I'm going to illustrate what we mean by that and how we're differentiating ourselves from our competitors. We launched Accenture Strategy on January 1. And as the lead for this new global business, I can tell you we're already seeing signs of significant impact in the market. So what makes us unique? Why are we different? We're the first to put together strategy and technology equally and at scale as Pierre said earlier. That's different. Consider a pure strategy organization. They can pitch a digital strategy, but they don't have the full suite of capabilities to back it up and they don't have the insights to power the strategy work. They're not part of the strategy ecosystem. Accenture's strategy is. And because of this, not only will we create and shape the business strategy, but we envision it differently. We will create it from the perspective an organization that has operated and implemented thousands of technology projects. And we bring these insights to our clients to benefit from this perspective at every stage of working together. No one else has the technology chops to operate in this strategy space as we do. Welcome to the future. Let me give you a little context as to why Accenture strategy has a special role within Accenture and in the strategy market. In Accenture Strategy, we've created a differentiated capability that can only come from this organization. We've pulled together a blended team from across the organization of our best industry strategists and our best technology strategists. This capability is incredibly relevant in today's digital world. And we're already operating at scale with more than 8,000 consultants. We're one of the largest strategy consultancies in the world. Accenture strategy is also critical to how we as an overall company compete and are creating our future in the context of end to end. What do I mean by that? As Pierre said, we want to be the partner of choice when it comes to professional services. Our aim is to operate at the heart of our clients' businesses, providing services that start with envisioning and architecting our clients' future. This is the distinct role of Accenture's strategy to envision, to shape, to create in the digital space. We know our clients' industry. We understand the trends. We live digital. And we're the trusted advisors in the C suite, working with our clients to design and deliver strategies for large scale mission critical projects. Let me give you an example. One of our clients, a large diversified insurance company was facing a critical challenge. Their customers were being taken away by direct Internet based competitors. They needed a response. However, they had a large agent network. They have a large agent network that they had to not work around. In addition, they realized this was going to be a multi $100,000,000 investment that had to work smoothly with those agents and go direct to the customers. Not only that, it had to work with a multi $1,000,000,000 technology infrastructure that they had built for themselves over the last 2 or 3 decades. They turned to us for help. Why? Because we could help with the strategy, which segments, how to position it. We understood the technology that they had built and how this new digital technology would link to it. And within all that, we could help them with a business case to take to their management team and their board. I believe no other strategy firm could do all of those things in that situation. And let me give you one more client story that illustrates this. It's with Jurong Port. Jurong Port is Singapore's port and is one of the largest port operators in the world. As an industry leader, they turn to us to help chart their innovation agenda and keep them relevant to shippers over the next decades. We won this work by bringing together teams from our industry transportation strategy business, our supply chain function strategy business and technology strategy. These three parts could envision the future and the logistics needs of a major port. Our technology team introduced video analytics to the client and demonstrated how it could help the port staff predict the needs of the future ship placement, offloading patterns and ways to improve the operational efficiency of the port. And none of this could be done without looking at days and days months of the video analytics to understand how the human factors that the operators of the ships and the machines add into the process. Without that new analytics, without those connected devices that Paul spoke of earlier, they couldn't craft a strategy. I think you can see why this combination of technology and business is relevant in the strategy space for our clients. Accenture has created the strategy practice of the future. It's new and it's different and it's extremely powerful. Our clients are telling me that this is just what they need and the time is now. In closing, I'm extremely proud to lead this talented team of strategists at Accenture and excited are about the road ahead. The timing of this new business couldn't be better. Pierre, back to you. Yes. Thanks a lot, Marc. And just pausing on this because what it is we are doing is pretty profound. I mean to be honest, we had opportunities to create probably the last strategy practice of the past and emulate couple of our competitors and try to do the same. And this is not the direction we decided to undertake because we believe it's always better to play the offense and to understand what is the new value proposition which is expected by the market. Roxanne Taylor, you're with us? Hey, I see Roxanne, our Chief Marketing Officer been driving a lot of analysis on what the market is expecting when it comes to strategy. And it's interesting that when you're putting together business and technology equally one name is coming first and this name Rox is? Hector. Thank you. And yes, I mean we prepared for that. Ours, but it is very profound. I mean we as you might imagine we thought a lot about it. Do we want to be in strategy? To do what? Do we want to be a me too like the others? Or do we want to understand what's happening in the market? And indeed in the context where the strategy practice are all over the place consolidating and probably having big question regarding their futures, we are inventing the future by bringing technology strategy at the same level of business strategy and creating a new value proposition. And so far the feedback we are receiving from the analysts, the survey and more important from our clients is just superb. So thanks so much for taking this leadership role. Now we're going to move to Accenture Digital and Mike Sutcliffe. I mean some people are more lucky than others. Mike is. I mean leading in a world which is moving digital big time where digital is not only the buzz, it's the reality. Having the opportunity which is happening once in a life to lead something called digital at Accenture is just an amazing opportunity and we have co selected Mike which is one of our most visionary leader Accenture always looking forward never backward to lead Accenture Digital. And what it is we want to achieve is very clear and very simple. We want to lead. This market is still forming and we want to be to take early leadership position in this world which is moving extremely rapidly. So we will be the go to partner for our clients when it's all about digital. Over to you Mike. Thank you, Pierre. And thanks for all the investments over the past many years to prepare us for this. As Paul mentioned, Accenture Labs and Accenture more broadly to drive and create the next generation of business models, operating practices and customer experiences with our clients. We're collaborating with Accenture's strategy and the digital combination, technology and operations to create cutting edge solutions that are unique to each industry and specific client as they seek to disrupt the existing ways of doing business. Digital customers, digital channels and digital markets are accelerating the pace of change in each of our industries and we believe this will continue. As Paul mentioned, we also see the industrial Internet of Things as a major growth engine for opportunity at our clients. We're helping our clients thrive in this competitive environment. Accenture Digital is an early leader in the digital services market. We want to become known as the go to partner for our clients as they apply digital technologies to create new value for themselves. In fact, Gartner already recognizes Accenture as the largest digital transformation consultant worldwide in terms of revenue. We are working with many of the industry leaders. In fact, all 10 of the top pharmaceutical companies, 7 of the top 10 consumer products companies and 7 of the top 10 largest global retailers. We've helped our clients capture more than $100,000,000,000 in revenue and sales worldwide from hotel reservations made to consumer products purchased to business to business transactions completed. And as Paul mentioned, we're a very active participant in the ecosystem. We're working with Accenture's traditional alliance partners such as SAP, Oracle and Microsoft, as you've heard. But we're also working with many of the digital players in the market, such as salesforce.com, Workday, Adobe, SAP Hybris, Sitecore, Apogee, Criticism and many others. We work with these partners to bring new ideas and winning solutions to our clients at scale anywhere in the world using the technology that makes sense for each individual client environment. And we're just getting started. We're the leading player in the digital services market, but we see huge potential to demonstrate the power of combining our capabilities in Accenture Interactive, Accenture Analytics and Accenture Mobility. So let me provide a brief description of each of these businesses. Accenture Interactive is about $1,000,000,000 business focused on helping clients design new solutions for digital customers, channels and markets, working primarily with the Chief Marketing Officers and customer officers of our clients. It's focused on providing end to end marketing experience, including creative design, customer experience, digital production and e commerce platforms. We help clients engage and delight their end users across channels, whether they be consumers, patients, students or citizens. We've rapidly increased our capabilities with successful acquisitions of Fjord, Acuity and Aventa. Each of these companies is a leader in their field. We now have more than 30 design studios, R and D offices and centers of excellence delivering solutions for our clients in this space. The combination of our services, our tools, our software assets, our alliance partnerships are some of the reasons that leading companies including Adidas, BMW, Citibank, Nespresso, P&G and Unilever choose to work with us. As a brief illustration, we're helping Nespresso right now as they transform their customer experience across 41 countries. We're providing services including e commerce, mobility applications, store point of sale, customer relationship management, and back office retail systems in an integrated fashion. We're working in this case with our alliance partners, including SAP Hybris and Adobe as part of this digital transformation program with Nexpresa. Let me tell you about Accenture Mobility. It's also just over $1,000,000,000 business in a tremendously dynamic market. We've seen advances in both mobile application development and connected platform capabilities in the past year. The mobile application market has exploded over the past few years and Accenture Mobility is already a leading developer of enterprise solutions across platforms such as iOS, Android and Microsoft. We have 13 mobility innovation centers and 17 mobility development centers capable of rapidly creating new solutions across any mobile platform and any type of device. In the application development space, in Accenture and Avanade recently worked with the electoral commission of South Africa to create a mobile app to provide services during the last election cycle. During Election Day and the following three, the user requests exceeded 1,000,000 per minute during peak periods. We're talking about mobility at scale. And we're seeing great demand for our mobility managed services platform in the connected product space. We're using this proprietary capability, a connected product solution for leading clients, including the Fiat Chrysler Group, Vodafone, State Bank of India. And we're partnering with GE, Siemens, Samsung, C3 Energy, Intel and many others to market their investments and the technologies that they're bringing to market around the connected product space. As an example, Accenture is working with Fiat Chrysler Group and jointly creating the mobile platform that they use to develop the next generation of connected services for their Uconnect systems across Europe, which will provide drivers with communication, entertainment and navigation features, as well as integration with content providers and real time vehicle diagnostic data. We've got a lot going on in the mobility space and the industrial Internet has got a lot of room to grow. Our Accenture Analytics business is a powerhouse in the analytics market. It's about a $3,000,000,000 business today with more than 500 analytic assets and more than 400 patents and patents pending. Accenture Analytics is making significant progress developing advanced analytics solutions and embedding them into our industry business services. We're focusing on solving specific industry challenges with solutions such as smart water, smart grid, intelligent pipelines, connected vehicles, And the acquisition of the I4C capability earlier this year provides a fantastic platform to accelerate our work to package and distribute analytic solutions across computing platforms, which we think will be very important as the industrial Internet continues to get connected. Accenture Analytics is also leveraging lots of big data. We have developed an analytics as a service platform using public cloud and big data technologies. In a very recent example, we analyzed 300 gigabytes of raw data from 1600 network devices and we were able to predict for 1 of our clients device failures with 91% accuracy. We've also been doing very interesting and innovative work in the oil and gas industry, the utilities industry, financial services industry. We see lots of opportunity moving forward. Accenture recently worked with incidents and to increase collaboration among the agencies so they can improve the level of customer service they're offering to their citizens. So in closing, we're excited about the progress that we've made so far in building Accenture Digital and Pierre is right, I'm lucky, I've got the best job in the firm. We've got 28,000 deeply skilled team members and counting. We're already the largest end to end provider of digital transformation capabilities in the world. And our people enjoy the opportunity to work with leading clients across industries to unleash the disruptive power of digital and actually change the way the world works and lives. Now we get to go imagine and deliver the next generation of new solutions for our clients. So it's going to be a busy year. Thanks, Peter. Thanks a lot, Mike. And I guess you should be all excited with what you heard like we do at Accenture. Just imagine in probably less than 7 years, we created or about 7 years a $5,000,000,000 in interactive mobility analytics $5,000,000,000 revenue growing double digit. So I guess this is a very significant achievement and I have no doubt that Mike will bring Accenture Digital to new heights. Thank you. So, Mike, you said you have the best job, but I mean your friend and colleague Bhaskar has got the biggest one. Yes, we debate. That. No debate on this because Bhaskar is coordinating at Accenture 200,000 people. So no one else could compete with when Bhaskar is standing up when it's about running a big job. But of course, we're not here to celebrate the fact that the global Dario network is a big organization. We're here to demonstrate that it's the best organization in the industry. And what it is we want to do with Accenture Technology Delivery is definitely the job of Baskar is extremely simple. It's to run and drive the most productive and diversified technology delivery capability in the industry, providing our clients with 2 things, of course, the very best technology services at the most competitive cost. So Bhaskar, tell us how you're going to do the magic. Thank you, Pierre. I think as you said that my job is simple, because I have I'm really proud that we have a formidable delivery capability, which is powered by our global delivery network, which underpinned with 5 key elements. Number 1, we have scale. We have unmatched global scale of this delivery center network. We have a capability to service our clients across 50 plus delivery centers, client locations, extension locations across 120 countries. Number 2, skilled. We have 205,000 highly skilled professionals in this delivery center network. They are skilled in technology, industry, business and process across 40 industries. We have a deep skill across all large technology platforms, including the emerging technologies. Number 3, the depth and breadth of our capability. We have capability to deliver high quality, reliable service to our clients seamlessly across strategy, digital, technology and operation that is unique and that is what we do every time for our clients. Number 4 is delivery quality. Accenture stands for delivery excellence. Based on the external market benchmark, we outperform the market every time. Our standard tools, process, methodology, which we apply across the delivery centers, across our engagements ensures reliable, measurable, repeatable and predictable delivery with a reduced risk and time to market. Number 5, top skills. I think top talent. I think top talent is our ultimate differentiator. We have ability to recruit and retain the best quality people across the globe. We train them on industry and technology and make them more culturally fit and collaborative to work with our global client across the globe. So I have described this formidable delivery capability what we have, but this capability is unique and differentiated. We are continuously innovating and investing on state of the art technologies, on intelligent tools and industry assets. We are making our capability even more productive, even more competitive and more relevant for our clients. Greater intelligence brings the higher productivity. What we see today using our intelligent IT, we are driving as high as 40% plus productivity in certain areas of application services. Let me explain this intelligent IT and intelligent tool concept. In Accenture, we have developed a series of family of tools, we refer them as Accenture Intelligent Tools. These are primarily high end tools based on analytics, cognitive computing or robotics. These tools radically improve the productivity by reducing the effort on increasing its throughput by eliminates the work altogether. Our industry assets are our big differentiator. The Accenture Advanced Enterprise System is a comprehensive portfolio of industry specific ERP. We have codified our industry knowledge and years of Accenture experience into a set of leading process, practice and technology. We deploy them to the client engagement, which ensures the faster, reliable implementation every time. It helps not only in the new implementation, it helps maintenance of the ERPs, upgrade and throughout the lifecycle of the journey. Let me share with you how we are using this power of global delivery network to compete and win highly competitive application services market. We have been in the application services market for 30 plus years. We are recognized by our clients and industry analysts as the market leader. Vast majority of our clients like Best Buy, OI, P&G, Royal Dutch Shell, U. S. Army or Marriott or Vodafone Group of the world use our application services every day to enhance their business performance. But yet we believe there is an untapped potential to drive this market further. We are addressing this market now even more aggressively. We are increasing our competitiveness with high quality solution using our end to end capability of global delivery network. We are differentiating further with use of industry assets and intelligent tools. We are creating best solution for our clients at competitive price point using the power of our global delivery network. Let me conclude and say 3 things. I feel really confident that we have formidable capability in this delivery center network. We are best in this marketplace. Our global delivery network is unmatched, unique and differentiated. It is powered by technology innovation and industry assets. We continue to invest to make our network more competitive, more industry rich, more productive and more relevant for our client. We are addressing the application services market even more aggressively by unleashing the full power of global delivery network. Thank you. Back to you Pierre. Thank you. Thank you, Batkar. And as you can see, I mean, we're very far when we talk about Accenture Delivery, Technology Delivery, when we're talking about the GDN, we are very far from the early days of what we used to call labor arbitrage, which was in 10 or 15 years ago, the kind of very beginning of this wave. Today, the winning organization will be the organization who are going to bring more automation, more intelligence, more repeatable routine, more machine learning on top of course of good labor cost. And the job of Bhaskar was probably one of our deepest thinker in that topic in the industry is to bring this level of innovation with the combination of repeatable tools and techniques, intelligent IT, superior industry knowledge, so we can make our global development work and our technology delivery capability not only at a competitive cost which is absolutely a must do, but for a competitive cost you have much more and this is what our clients they want now. They want more for less all of them at least for the same price they want much more quality. And we are extremely pleased with the direction Bascalle is giving to our global development network to continue making a machine which is going to make Accenture one of the most productive and best technology company in our industry. So it's going to be heavy lifting. I mean 200,000 people orchestrating, deploying more than 50 delivery centers. We are recently opening in I guess Guadalajara in Mexico, a new place for Baccarat and others to come. Now to close the loop and you've seen the end to end in action. We're starting with on visioning then when you on vision with a great deal of digital, Mike is coming with all his capabilities and he's enabling Marc Nikram vision. Then Bhaskar is coming with his 200,000 people, deep skills to make the technology and the solution happening. And of course, our clients they want more of us. They want Mike Salvino at the end of the day. He's our ultimate weapon in our growth platform because they want us more and more to operate on their behalf. That's point number 1. But they want us to operate on their behalf in a way which is going to be dramatically different moving forward because they want us to operate now as a service. So that's why we've taken this very bold decision. We are the first one and we are always pleased when we are making the market at Accenture to combine 2 of our best practices our business process BPO organization together with Infrastructure Services organization to create the 1st operation as a service organization called Accenture Operations. Over to you, Mike. Thanks so much, Pierre. And I'm excited to talk about Accenture Operations today because it's a roughly a $6,000,000,000 business for Accenture. And like Pierre said, it's made up of both BPO and infrastructure services. The goal of the Accenture operations is to grow both businesses. But as Pierre has said multiple times, what we're going after is the market opportunity to scale our as a service capabilities. Now why is that? For years, our clients have asked for business services that they can plug into. And they also want to get off of on premise technology. They want to move to the cloud. They want to pay for what they use. They want to get results fast and they want to drive business outcomes and they all want to do this at scale. And what our BPO and our infrastructure services businesses provide to us, they're growing, they're strong, They are the foundation for us to go after this as a service capability. They also present a huge barrier to entry to our competition. Now why do I say that? You don't create and scale and become a market leader in BPO and infrastructure services overnight. And let me give you a good example. We mentioned earlier that an as a service business like procurement is something that we have at scale. And you remember, it's almost been almost a year since we purchased Pacurian. And what we did is we took Pacurian, we put that together with our existing procurement business. And over the course of this year, we also got deeper a relationship with SAP to provide technology. And there we have a business now that clients can plug into. That's also differentiated. And what I mean by that is Everest says that we're number 1 in the marketplace with 30% market share. We also have momentum with recent wins at P&G and Diebold. Couple of key facts that I like about our businesses is in the procurement business, we manage $76,000,000,000 in spend, which gives us tremendous amount of buying power. And then when you look at procurement, it's basically made up of 15 categories. And in those 15 categories now, we're deep in each one. So now let me turn to talk a little bit about BPO and the market leadership position you've heard about us creating over the last 3 years. First of all, our strategies work. And plain and simple, our strategy was to take our best offerings to our best clients. Now what do I mean by that? Our best offerings are offerings like finance and accounting, like procurement, like marketing. There are offerings that are cross industry, but we also have industry specific offerings like mortgage and like health. And then our best clients, you heard Pierre talk about our diamond clients, right? We have 141 of them. So what we're doing is taking those offerings to those clients and getting ourselves in sole source situation. Now that execution of that strategy has allowed us to grow profitably for the last 3 years in double digits within BPO and continue to take market share. Now we win in BPO for four reasons. The first one is delivery. We have an unmatched delivery capability with the Accenture Global Delivery Network. 2nd is business outcomes. We deliver what I call 4th and 5th generation BPO. And what that means is our clients buy business outcomes. They don't buy transactions and FTEs. In terms of the 3rd piece, it's our talent, right? Our talent is second to none. And what our folks are focused on is innovation. They're combining analytics along with industry insights. One of the stats I like the best is 86% of our folks in BPO are aligned to industries. So if you guys come visit us in our centers, you'll see doctors, nurses, engineers, to name a few, skill sets that aren't processing transactions, they're actually doing high end work, all right? They're focused on making sure we're providing that value. And then in the key regions like India and like the Philippines, we are the employer of choice. Last part is technology. We've spent a ton of time over the last few years implementing technologies to remove commodity transactions. We've done this by implementing standard packages like SAP to remove invoices and also implementing our own based learning tools that we call mini bots to remove that work. So you can see in BPO, not only are we differentiated, but we have momentum. So now let's talk a little bit about infrastructure services. And let me start by talking about some characteristics and some statistics. Infrastructure services, we say, is an end to end business. And what I mean by that is it provides infrastructure consulting, infrastructure outsourcing, security services and Accenture Cloud Services. And we are seeing in the marketplace as agnostic, but we do have deep and broad alliance relationships with many of the top technology partners like Microsoft, like Amazon, like Cisco. And in terms of scale, that's what we have too because we manage close to 120,000 servers, 500,000 desktops and 2,200,000 network devices. Now when we talk about infrastructure, most of our clients are not starting from a white sheet of paper. Most of them have made very heavy investments in legacy systems. But through something that we call intelligent infrastructure, what we help our clients do is design, build and operate infrastructure that basically nails their digital business agenda. Now an example I'll use is one that Paul Daugherty already mentioned that we invested on over the years, which is Accenture Cloud Platform. What that platform does, it enables those clients to move their applications and their business processes to the cloud in a secure manner at speed with just one platform. And as I stand here today, we've either done or are doing work with about 75% of the Fortune Global 5 Fortune Global 100. So as you can see, much like the BPO business, infrastructure services also is differentiated and has momentum. So to recap, what Accenture operations will go after is scaling this as a service marketplace and make sure that we can provide those kind of capabilities to our clients. Now the only reason we can do that is because of the great success of our BPO and our infrastructure services businesses, and we will also continue to grow those. So I'm very confident that Accenture operations will not only 1, continue to drive profitable growth for Accenture, but also will continue to be a leader. Thanks. Pierre? Thanks a lot, Mike. So I mean we're done with that session and that was very important for us to share that with you because these last couple of years we invested a lot in transforming our capabilities and creating new capabilities in order to be even more relevant to our clients and delivering against the vision we have and the value proposition we're bringing to the marketplace which is having 4 global capabilities all world class, all at scale, all leading in the industry. And when you combine all these capabilities then we can delivering against this famous end to end. We envision, we digitalize, We are providing the best technology delivery. And at the end of the day, we can operate on behalf of the clients. If you think about the industry and I know you know very well our industry, how many companies in professional services could provide this end to end from true services strategic services to digital services to technology delivery services and operation services only 1. And today it is Accenture. This is very demanding as a positioning. This is very exciting. But we believe we have here really a very significant source for differentiation. And for us this is the only base relevant to deliver on the transformation agenda again for the G2000 clients. So we are very exciting with this creation of our 4 new growth platform. You have here 3 4 extraordinary 4 growth platform, 4 brilliant group chief executive and they're all very good, very keen to bring that growth platform to the next level. So thank you very much for the excellent presentation. And now we're going to move to the operating groups to the industry. So Sander please join me. You know more about our businesses, global businesses, global capabilities at scale all leading in the industry. Sander going to share with you the magic now of Accenture, our secret sauce which is how we are bringing these capabilities to our clients and through a very specific role which is extraordinarily important at Accenture, the client account lead or the diamond client account lead which is one of the most prominent role we have in the organization. And of course the job of the operating groups is to bring the best of what you heard and every minute of every day of every year bringing that to our clients. So indeed at the end of the day we can deliver the transformation, the value outcome base. So Sander over to you to reveal the magic. Thank you very much, Pierre. And I'm going to talk a little bit about the secret sauce here because I do think that the operating groups are indeed the secret sauce of Accenture. But before I go there, I would just like to say, I mean, I will continue to be amazed and impressed by what these 4 guys are bringing to us every day. And you can imagine that with those 4 guys behind you, you can beat any competitor any day at any client. And that's just that's the beginning of the secret sauce I would say. But now it's time to have some fun with our client teams because in the at the clients driven by our client account leaders that's where the magic happens. That's where we bring all the things together and that's where we say the rubber hits the road. And with that statement, I would just like to draw your attention to the slide that I have behind me because that latest advertisement that we have just epitomizes what we do in Accenture. We bring value to the client. We do it at scale. We do it in saturated. Ultimately the client allows us to use their most powerful symbol the Bebendim in this case in our advertisement. And you can imagine that Pierre being French was particularly pleased with this one. He couldn't be more pleased. He couldn't be more pleased. So definitely a great story there. So the operating groups they play a critical role in Accenture. You all know the operating groups because that's how we report on our P and L. But I would say the operating groups play a much, much more profound role than just reporting the P and L. We bring everything together. And I think at the end of the day they are not only a key differentiator of Accenture, but I do think we have the best channel in the industry. If you were asking what are the operating groups doing, it's all about 4 things. First of all, it's about industry. Secondly, it's about value. It's about being proactive and it's about driving relationships. So let's talk about industry. Our clients expect us to know about industry. They expect us to know what is risk management in a banking environment. They expect us to know what's e commerce in a retail environment. That's why we have management consultants and technology consultants in our operating groups who know the specific details of our clients' businesses, their strategy, their processes, really important. We have people in our operating groups who can propose deals to clients, who can put deals on the table that drive particular value for that particular client in that particular industry not just generic. Then it's about of course driving value because only we can only bring high performance delivered to life if we have an impact. An impact means we have to drive results help our clients sell more, opening a new country, opening a new distribution channel, introducing a new product, spend less, smarter procurement, smarter operations, just cost cutting is also something we do or use less capital in the business. Drive value is extremely important. Proactive, proactive because our clients they call us, but we call on them more often I would say. We bring IDs to them. We bring IDs to grow their business. We bring IDs to operate better, to sell more, to run their business in a better way. So being proactive is extremely, extremely important. And I would say not only we bring IDs, but we put deals on the table. We put propositions on the table. We put skin in the game to drive that value with those clients. And then finally, of course, if you know the industry, you are proactive, you bring good ideas, you execute on those with the clients, you build relationships, long term and trusted relationships. And that's at the end of the day what it's all about because I always say if we deliver value that's the best marketing of Accenture. Delivering value is the best marketing of Accenture. And we can of course only do that if day in day out we bring the best of Accenture and the best of these 4 guys to the client at that particular point in time. At that particular point in time not the best of Accenture in Italy or not the best of Accenture in operations now the best of Accenture of wherever we can find it in the organization. And you would say well that sounds pretty simple, but it's not. There's a lot of hard work involved there and the hard work is driven by our client account leaders. And these are very senior leaders working at the executive level with our clients, shaping the client's agenda, listening to what the clients need, being proactive, delivering value at the end of the day. And that's I mean that's not simple. It's hard work. You have to be there. You have to know the clients' industries. You have to build the relationships. You have to deliver. You have to resolve some issues every now and then. It's all part of the package. And these very senior leaders you're going to hear a few of those now. We're going to hear from Caterpillar, we're going to hear from Telefonica and we're going to hear from BP. And you'll soon know why we selected these guys because these are the best in the industry. They have some great stories to share with us. So let's see whether we can make the technology work here. First, we're going to Chicago and this is actually a very great day for Brian May because Brian is our client account lead at Caterpillar. Normally he is in Peoria, but for this day and for this day only we allowed him to go to Chicago. So Brian, you already miss Peoria or how's that? I do although it's a beautiful fall day here in Chicago. I'm going to be in car driving back to Peoria right after this conference. So glad to be with you today. That's what I would like to hear. Right back to the client, but not before you've told us the story of Caterpillar. Please go. Perfect. Thank you, Sander. So I'm excited to be here today to represent the over 700 Accenture people who serve Caterpillar around the world every single day. And I'm proud to have worked on the Caterpillar account myself for more than 17 years and to be leading our global team. As you know, is a heavy equipment manufacturer based in Peoria doing business in nearly 200 countries around the world. And Accenture has been working with Caterpillar for 27 consecutive years. To me this reflects the strong commitment to value that we bring to Caterpillar across so many parts of its business from engineering to manufacturing and from dealers to customers. I'd like to share 3 great examples of how we serve Caterpillar globally at scale across a wide range of business functions. These examples demonstrate not only our ability to bring scalable global services to our clients, but also how we're bringing assets to market to accelerate value for our clients. So the first area is connected machines. Like so many companies Caterpillar is looking to the industrial Internet to connect its products. And we're leveraging the Accenture Connected Vehicle Business Service to help them do just that. This business service is actually powered by the mobility managed service platform that you heard Mike Sutcliffe talk about earlier. With this offering, we provide end to end services including telematics to help Categoor collect data from their products and more importantly to create new services and solutions for their customers. For Caterpillar, this is an important part of strategy to drive innovation, sales and ultimately growth. The second area is dealer management. We've been working with Caterpillar's global dealer network for almost 2 decades. We've got some very exciting work going on including a new partnership with SAP to bring a leading edge technology platform to Caterpillar dealers. Today, the Accenture Dealer Management Solution or ADMS is bringing new capabilities to dealers including analytics and mobility for sales and service. In addition to ADMS, a few years ago, we took our relationship with these dealers to the next level and we acquired the rights to Caterpillar's proprietary dealer management system. This has allowed us to offer the solution directly to Katz dealers and at the same time letting Caterpillar focus on its core business. Through our global delivery network, we provide high quality service at scale for Caterpillar's dealers at a significantly reduced cost. If you follow Cat, you know this is a very high performing group of dealers and it's really been great to have worked with them for so long. And then finally, the 3rd area is growth markets. Several years ago, Caterpillar asked Accenture to help accelerate growth in developing parts of the world, in particular in Asia. A key part of this was working alongside Caterpillar to ensure that all of their factories in that region were using proven business it's been a key contributor to Caterpillar's growth in that region. The other exciting thing is you may have noticed this program highlighted in airports all over the world as part of our global ad campaign. So overall, the scope and scale of our work with Caterpillar, the innovation we've driven demonstrate our marketplace differentiation. It's a great example of the innovation we've driven demonstrate our marketplace differentiation. It's a great example of Accenture's unique ability to deliver outcomes and high performance in this case for almost 3 decades. We look forward to many more years of success with this great client. And with that, Sander, I'm going to turn it back to you. Thank you very much, Brian. And obviously, what I like about this story is the innovation at scale globally in emerging markets. I mean that's just a great job. Brian, thank you to you and team for being a great steward of the 27 year relationship we have with Caterpillar. Thank you very much. Thank you. So now let's go to Madrid. And in Madrid, we have Dana Eaton. And actually something I really like about Accenture is here we have an American woman living in Madrid looking after our global Telefonica relationship and she's going to talk to us about the work we have done with Telefonica in Brazil. So Dana, I'm sure you're totally up to speed with Tapas and Sanla these days. Yes. Actually it's a sunny afternoon here in Madrid. So hello to everyone from Madrid. Good, good, good. Well, Daniel, tell us about what you've done with Telefonica in Brazil. Okay, great. I'm happy to be here this afternoon to talk about our work with Tenda Fonica and specifically with Tenda Fonica Brazil. I have had the pleasure of collaborating with them for more than a decade and this is a terrific example of helping a long term client transform its operations and to gain more value from its strategic investments in Latin America. To set the stage, Telefonica is the 6th largest telecommunications company in the world and the 2nd largest in Europe. You may know some of its brands including Movistar, O2 and Vivo, which operate in 24 countries across Europe and Latin America. Accenture has been proud to work alongside Telefonica for more than 15 years. Today, more than 2,000 Accenture people around the world provide business process transformation and IT services to this important client. Recently, we took our work to a new level with Telefonica in Brazil, its largest market in Latin America when it acquired Vivo, Brazil's largest wireless company. For the newly branded Pelotonica Vivo, Accenture proposed a transformational initiative to make the company more efficient at its core with a more robust, agile and innovative operating model to support growth. We leveraged our extensive knowledge of the communications industry, our BPO expertise, our management consulting capabilities and our proven experience in delivering successful transformation projects. By bringing to Telefonica our end to end business process capabilities across a wide range of functional areas, we are helping to streamline processes, improve quality and deliver savings in excess of 20%. We are committed to delivering the process efficiencies targeted through traditional outsourcing arrangements and we're committed to improving key business indicators that will drive additional value to Telefonica's top and bottom line. In the end, successful long term client relationships are about trust. We know Telefonica's culture, the business and their systems and we appreciate the trust they placed in Accenture to deliver transformational change. Our work with Tendo Pontecor in Brazil brings our relationship to a new dimension and we're excited about the possibilities ahead. Back to you Sander. Thank you very much, Dana. And what I like about this story is proactive, bringing an idea, put skin in the game, transform at the heart of our clients' business and ultimately build that trusted relationship. Dana great story. Thanks to you and the team in Madrid and in Brazil I guess. Yes. Thank you. So now we're going to London to an old friend of mine, an old resources friend I used to be in resources before as some of you know, an old chap as they say in England, Arthur Hena. He was my Industry Managing Director for Energy. He is now the Managing Director of the Strategy Practice for Energy. But first and foremost, he is leading our work at BP. And Arthur, I assume you are a happy man with Scotland and the oil staying in the U. K? Yes, Sander. Yes, I think we're very happy about the decision that the union remains the union. And I'm delighted that I'm going to have the opportunity to talk to you today about my favorite client BP. I've had the pleasure of working with BP for over 14 years. And today I lead a team of about 2,300 Accenture people who serve BP each day across very many different areas of the BP business. BP is a tremendous example of how Accenture operates and innovates at the heart of a client's business and how we are helping BP transform in an industry that is changing very rapidly. You all know BP. They are the world's 4th largest energy company and they operate in more than 80 different countries. What you might not know is that BP is Accenture's longest served BPO client, dating back 23 years to our Finance and Accounting Services Agreement we signed in 1991. We've developed a strong and trusted relationship with BP by drawing upon our deep industry knowledge and to help BP achieve its business objectives. Let me share with you just a few of those highlights. 2 years ago, we signed Project Mariner with BP, which established Accenture as BP's single global outsourcing provider. The goal was to simplify and standardize the global delivery model for our finance and accounting services that Mike talked about earlier. The Project Mariner deal brings to life the importance of delivering consistent results, whilst also looking for ways to create and deliver even more value to a long term client in the manner in which they deliver finance and accounting. Today, Accenture teams serve BP from Bangalore, Buenos Aires, Manila, Krakow and San Antonio. BP has been able to significantly improve the efficiency and enhance its internal financial controls and accelerate its transformation to a global business services unit. So that's the business process and operations side of our work. However, we have recently expanded our relationship with BP around digital and now we're truly moving into new frontiers. We're focused on what we call in the energy industry the retail renaissance. Major oil and gas players are rediscovering the opportunities in retail and investing to capture value from them. Accenture's strategy works with BP to explore the implications of digital disruption in retail, what it means for the consumer and importantly what it will mean for BP in terms of business opportunity. Today, Accenture Digital is helping BP transform its European's fuels and convenience retail businesses. And we're bringing our analytics capabilities and insights to create a much more innovative and competitive customer experience for BP. We're very excited and most importantly BP is very excited too about what these new insights mean in shaping strategic decisions for the retail business and what this will do in terms of making a big difference in terms of business value. Now to me serving BP demonstrates the power of our strategy and our differentiation. This is all about how we leverage strategic industry insights and industry expertise to develop new solutions that deliver tangible results for our clients at speed. Back to you Sander from an old chap in London. Thank you very much Arthur. What I like about the BP story and it's very close to my heart because I was in resources, it's the longevity of the relationship, but you can only have longevity of the relationship if you bring new and innovative IDs and that's what these guys are doing. Thank you, Arthur for doing a great job of course for you and the team. I think you're now starting to get why the OGs are a differentiator of extension because we do not have only these 3. We have a few 100 of these types of people. A few 100 of these people who operate at that very senior level at the client shaping the industry shaping the agenda, working the agenda, building the relationships. And the asset test for us is of course and Pierre said how proud he was on the 141 Diamond client relationships that we've built and rightly so. But the asset test comes when we visit the client. And Pierre and all the GMC members we visit clients a lot. So what do we like to hear from our clients? Well, we like to hear effectively three things. A, you guys brought some really great ideas really innovative Not great ideas, just great ideas, but for my industry, for my specific situation, we executed very well on those ideas. We delivered the value. And finally, we were not surprised Accenture because we've been doing this for many years and we're going to do it for the next many years to come. So that's going to be the real asset test in a client meeting and that's what we're looking to hear. So in summary industry, industry, industry you have to be relevant at the industry level. Value. You have to drive results for and with the clients. Proactive. Bring IDs. Not only IDs, but IDs that can translate into deals into value propositions that we put skin in the game with and last but not least build on those long term and enduring and trusted relationships. Back to you, Pierre. Thank you, old chap. We've been working for a long time with Sander and he's absolutely a great leader. I mean, as you know Sander been our Group Chief Executive for Resources and he was leading management consulting and now he's providing leadership to product which is another illustration of our ability to take our leaders and to rotate our leaders in different roles. So we all could continue learning. Hearing from clients this is I mean definitely what's the best and I hope you enjoyed what you heard. For us that was huge when we I mean got the permission from our clients to showcase them. Most of what we are doing with them as you might imagine a lot is confidential and they are not that keen to share with the rest of the world what we do with them. And look at Caterpillar of course Michelin couldn't be more pleased than Roxanne Taylor and the marketing team working very hard with our clients team to make sure that we can showcase clients because at the end of the day this is the real thing. The other point, client to come we all been client to come lead at Accenture, if I'm looking at all the leadership here. And I guess we all have retained what's making our clients a country. It's different. Probably the 3 P's if I may say is professionalism. I mean you can see they're on top of their game. They understand their industry. They are very deep. Pride the second thing. We are all extraordinary proud to work with these brands and these clients every day. It's a privilege believe me and believe us to have the opportunity to work with such companies especially on their most mission critical program. And the last P will be passion. We're passionate. I mean we love our company Accenture but we love our clients as well. And this is this alchemy which probably making us creating such bond. I mean imagine 20 years, 14 years working side by side with clients in good and bad days. It has never been all blue sky. They are facing complexities with their Accenture. We always stand by our clients with always this professionalism, pride and passion. So we carve out some time for questions. We talked a lot. I hope we provided good information to all of you. And we have now 25 minutes or so before the break of questions. Then David Rolland, our CFO will be on stage at CHARP 10:30, right? Oh, yes, after the break. Sorry, you probably so we will have a Q and A till 10:30. Then we will take a break of 30 minutes from 10:30 to 11. And then 11 sharp, we will all be back to hear from David. I'm saying that because we have people on audio cast so they need to understand as well what's happening here. As David will make his presentation on our finance strategy or finance direction and we'll give you more numbers. Please refrain your instinct of asking too many questions to David on some of our finance. We will have another Q and A session after David presentation. And maybe let's take the 25 minutes we have in front of us more for question to the folks you've seen on clarification regarding the strategy. Thank you, Pierre. David Togut with Evercore. Over the last 6 months, employee attrition has moved up from 12% to 15% and Bhaskar noted that 2 thirds of your headcount is now in the GDN. So my question is what initiatives do you have underway really to retain and develop your best people, particularly in the GDN? And I'm interested in particular in career pathing which would be really critical to keeping them. You're giving me the unique opportunity to introduce welcome Eileen Shook. Eileen, by the way as well is a new member of our Global Management Committee. If you could Helene could get a mic. So now Helene, she's our new Chief Human Resource Officer. You've been taking from Jill Smart joining as well the Global Management Committee. And so he narrated this famous way of presenting HR. You're the mother of our 300,000 people now after GL. So could you answer the question? Sure. Thank you and thanks for the question. Our employees number 1 that buyer value for their careers here at Accenture is interesting work. And I think and I hope what you heard from our leaders today is that the work that we do for our clients and the innovation that we bring provides interesting work for our people. Our attrition rate is well within our expected range. There are ebbs and flows in attrition. But the real heart of what we provide them is interesting careers through the Accenture career experience. So, yes. Are you concerned with the attrition rate? Me? Yes. No, I'm not concerned with the attrition rate. It's well within our range. We remain the employer of choice in our key markets. And again, the number one buyer value of our people is interesting work and they're very excited by the work they get to do with our clients. Bhaskar, are you concerned with the with what's happening from a nutrition standpoint in the GDN? I don't think I'm concerned at all at this point of time, because what I see the attrition varies from country to country. But when I see the overall GGN across our 120 countries and 50 locations, it is very much under control, it is very much within the range. And most important is the key geography where we have large number of people like India, we are the employer of choice. So that helps us to retain the best talent and attract the best talent every day. I guess in India, it's interesting we are the employer of choice. The second that I can mention the first one because the first one is Google. So it's interesting that in India the first employer of choice is Google. We love competing against Google, but it's and the second one would be Accenture, maybe not something you would have in mind when you think about India professional services landscape beyond our competitors the Indian pure players. Hi, it's Lisa Ellis from Sanford Bernstein. Two related questions associated with Accenture operations. 1 is you're growing Accenture operations and then also I guess the interactive business. How much of your revenue now or as you see going forward is coming from budgets outside of CIO budgets, outside of the CIO organization? And then on a related point, how do you see the adoption of your risk based pricing model starting to impact your operating margins going forward? Okay. So for Accenture Digital I guess on the budget what's coming from IT and what's coming and then of course Mike and what's coming from non IT because I like a lot of your question. Indeed these last years we've been famous for years to work really at the heart of IT or at the heart of the enterprise and especially enterprise all the RP Enterprise Resource Planning. And then we decided at Accenture to extend our reach to drive more growth and to extend on one hand on the marketing side of the value chain if you will. And that's why we decided to create Accenture Interactive and to get after the agencies to be extremely clear after the CMO budget and which might be another story happy to talk about it. We are extending as well much now on the operations really at the heart of what our clients are doing. You heard about the partnerships we are making with GE on aircraft maintenance, Siemens on smart grid. So at the end of the day, we want to make Accenture relevant across all the value chain of our clients. But could you tell us where the budget is coming from, Mike? Yes, absolutely. I mean, to start with the Chief Marketing Officers and the budgets they've got to pursue new customers and create demand in their channels. So we work a lot with the Chief Marketing Officers, their advertising budgets and all of the work that they do around their customer agenda. So we think of the opportunity to grow sales with our clients as a major opportunity. And you heard Mike talk about what we're doing in the operations space earlier. We actually do marketing operations work for a lot of the leading marketing firms in the world. So that absolutely is an area that operations is growing very aggressively. We also see the combination of operational technology like plants, airplanes, etcetera, and information technology. So when we think about the IT budgets, the traditional IT budgets that are controlled by the CIO, we have to remember that there's a bunch of other IT spend that occurs out in the business around operational technology. That's expanding as well. But really, I think I'll ask Mike to talk a little bit about what he sees in the operations space very specifically. So in the operations space, it's an evolution, right, because a lot of these companies will start with the back office. So back office, think about F and A, think about HR. And then based on us delivering, when Arthur got up there and talked about the BP story, right, that BP story over since 1991 started with us doing commodity transactions in F and A. That now has moved up, right, into other areas. And when you think about it, you think about our marketing offering, I talked about mortgage, I talked about health, we've got post trade processing. Once we start delivering on the backbone that gives us entrees, especially with our 141 diamond accounts to go into the business units and do more work. Procurement also is a great example, because when you look at the procurement budgets, they're not always just housed in one place. A lot of the business units own their spend and their buying power, which allows us to get further into the business units. So I think it's an evolution. And as we deliver, we get more into the high value space. And of course, it's allowing us to get to other budgets. The marketing budget was something we typically didn't have before. So now we had access through Accenture Interactive to the CMO budget. And of course the more we grow operations here the cost of our client is becoming the revenue. So again it's outside the CIO space. So that was very deliberate in our strategy to make sure that by increasing the reach of Accenture across the value chain we are as well accessing budget if you will or cost base which might become our revenues. We're moving you tell me. Okay, here. Hi. Joe Foresi from Janney. I wonder if we could get an update on the impact of cloud on traditional ERP work and any potential derivative impact on your pricing model as people move more to outcome based pricing? The master of the cloud and Paul I mean it is an extraordinary important question. And indeed it's been now what 3 years Paul, we've been tracking extremely precisely the impact of the cloud or the as a service if you will have it as an extension on our more traditional business of DRP to understand things such as cannibalization and how programs are evolving. So Paul you're driving that for us. What are the latest information you're getting? Yes. So as Pierre said, we've been tracking this for a while. And when you look at this issue, we talk about the efficiency in the software as a service model. Some of you referred to it as the compression in the effort and size of the projects. As I said on stage, what we've seen is that the size of our software as a service projects continue to increase in size as we get closer to the on premise projects. So 2 years ago at our Investor Day, we talked about 25% to 35% less effort or compression in the SaaS projects compared to the on premise. Last year, we updated that and told you that they were getting closer in size and it went to 15% to 25% of compression. And this year, I'd tell you, it's continued to approach each other in size and we're at the lower end of that 50% compressing into the lower end of that 15% to 25% range. And the reason as I said is, is our clients are doing more ambitious bigger programs requiring more end to end services to do what to achieve their business needs. And the other thing I'd say is I just paint a picture of what this work looks like to make sure you all have a clear view of it in your mind. Whether we're doing an on premise project or a software as a service project, we basically do the same work. We design business processes. We develop requirements. We design the programs. We develop code to program the systems. We test the systems, we integrate to other systems, we convert the data, we train the users and we turn the system on. The only difference between on premise and software as a service is in that programming stage, which is where we write the code, there's less of that happening. Everything else in that lifecycle, you still need to do. And that's why as our clients start to do things in the SaaS world that are like similar to the confidence level they have in the on premise world, we'll see more convergence in the size of the projects. So bottom line is the level of cannibalization to answer your question is much more contained that we might have field 3 or 4 years ago. And we are tracking that the as a service project at least for Accenture and the G2000 are bigger than we expected and the level of effort or cannibalization or reduction is lower than what we measured 3 years ago, right Paul? Correct, yes. So we're going to move from West to East. Everybody, we will answer all questions. Hi. Yes, it's Tien Tsin Huang from JPMorgan. Hi, Peter. Okay. I just want to ask about digital. Just trying to understand the margin or the cost structure a little bit better about digital. I'm guessing it's a higher mix of consulting, lower mix of GDN perhaps, but also more platform as a service potential. So what does that profitability look like given that it seems like it's growing above average? Yes. On this, I mean, we're not going to comment on the economics by businesses because at the end of the day as you know very well, we are reporting through our OGs through our operating groups and that's the way we report our economics. That being said, if you look at Accenture Digital under the responsibility of Mike is we are doing all the different types of work in Accenture Digital. We're doing high value consulting. We're doing some piece which are application services. We're doing even some operations when we are running some of the marketing operations on behalf of our clients. So clearly what we have in Accenture Digital is much more end to end and a piece of the 4 capabilities will interact. And at the end of the day the margin will be the result of all of this. The point is to make sure and that the job of Mike and the team is when we are selling on this patch high value consulting, it's all at the right price point. So the point is to sell each and every piece at the standard price point we have at Accenture. And then the result of Accenture Digital is the blend of everything. But so far I think we could say that we are pleased with where we are with Accenture Digital and Accenture Digital is a good contributor. Okay. Let's move from okay, Far West. Thank you. Luba Sosius, CLSA. So in digital or some call smack, the analytic piece is actually very important. If you could just go into again a little bit more detail about the growth you're seeing there? And also there's some very big competitors in that space. How tough do you think the competition is? And if you could go into detail on that that'd be appreciated. Sure. So Accenture Analytics, Mike? Sure. So we think of this as 3 markets. First of all, there's the business intelligence market, which is actually going through quite a bit of change itself. That's the more standard market that we've seen in the past. And there's a tremendous amount of work being done by Oracle, SAP and others in that business intelligence market to kind of retool it for the next generation of business intelligence. So it's a growing market, lots of demand, lots of clients are finally saying that the tools are ready to give them some of the capability that they've historically cared about. 2nd part of the market, which we find tremendously interesting is what we've described as advanced analytics. So this is where you need pH level data scientists to have backgrounds in machine learning and cognition engines and different types of data science, who can apply that in a very specific way to very specific industry problems. For us, that is a very, very rapidly growing part of our business. And that's where we see the most demand coming at us in the short term. And the I think there's widespread recognition across the entire industry. There are just not enough data scientists to go around. So the more that we can find and train and bring to this particular part of the business, the better. And the 3rd part of the business is analytics as a service, where we've actually been working with the different technology providers that we talked about earlier to create solutions that we can provide as a service out into the industry. So for us, all three pieces of the business are very dynamic. There are different participants in each of the different sections of the business. And what we're trying to do is partner with all the different technology providers, rapidly develop our centers of excellence in different types of data science and create very industry specific solutions that we can take out and provide us a service. So I hope that answers the question. Could you say a word on the I mean at the high level on the competitive landscape because it's still a forming environment with I guess a competition which is quite fragmented and everybody is trying to race to get there. Yes, absolutely. I mean the analytics of market literally has thousands of boutique consultants who are specialists in particular industries or specific technologies. It includes all the major technology providers who are all trying to advance their business and the capabilities that they're bringing to the market. And then of course, we have people who are just bringing sheer capacity of data science skills to the market. And they're coming in from a completely different angle of basically just renting the expertise of their data scientists into the market. So we think it's incredibly fragmented. We're in the early stages of growth in the market. The good news for us is that every single one of our clients is building this capability internally and they're looking for more services from us because the opportunity to apply analytics is in every single one of the assignments we do across digital, whether it's a customer analytics job, an industrial Internet job, an e commerce platform, it doesn't matter. Analytics is embedded into literally every single job that we do across the digital platform. Thanks, Mike. Here and then we'll take a few moving Hi. This is Ashish Sabadra from Deutsche Bank. Pierre, thanks for sizing the ERP, $6,000,000,000 that you mentioned. Can you just help provide some more color what you're including in the ERP business? Is it the system integration only? Or does it also include the upfront consulting and the back end outsourcing? You may take up the outsourcing of those ERP. And the second part to that question would be, as the ERP transitions to SaaS, what happens to the back end outsourcing or offshoring of those ERP that you may be currently doing? How do you transition those revenues? And as you look towards your ambition 2020, how do you see that 6 $1,000,000,000 moving to either high velocity ERP, the one that you mentioned or SaaS? Thanks. So maybe I mean Paul you could give a sense of this and maybe some clarification on how you see this evolution from the on premise to the high velocity ERP which is going to be more size stats based and how that might evolve our business? Yes. So first of all, in terms of definition of ERP, we define ERP as it's the spectrum of functions you'd expect in an ERP system from planning and forecasting through supply chain, manufacturing, inventory, order processing and the financial and human resource components that underpin that. There's a broader it's a part of the broader family of application software with CRM and other solutions that we don't include in ERP in the way we define the market, which is consistent with the way most of the market defines ERP. So we're operating with the standard definition of ERP. When you to your question on systems integration versus outsourcing, we actually as we see in general, as we see our business move from on premise to software as a service, we do see a continued viable and strong business for application maintenance and continuing to serve clients after they deploy the platform as well. That's well established in areas that we've been at for a while like salesforce.com where we have a number one in the market with Salesforce that deployed many solutions and we're operating many solutions for our clients salesforce.comsolutions on an outsourcing basis. And the same is true for the other software as a service solutions that we're implementing for clients. So Paul to be crystal clear as Steve would say, I mean the question is and the idea might be the as a service with the as a service after the implementation you don't need any more application management or application outsourcing. Yes. So that's not true. You do need the application maintenance and the application outsourcing after the implementation. And it's as I said, it's a viable business. It will be it's very common for us when we sell the software as a service implementation to also sell the long term outsourcing business along with it. Okay. The lady in front of me who's been raising hand for quite a while. I think we have time for 2 or 3 questions. Thank you. During the delivery discussion, I thought the comment about using intelligent IT to drive 40% savings was particularly interesting. And I'm wondering, as that expands, is there an opportunity to grow revenue faster than headcount in that segment in particular potentially more broadly? Breaking revenue from headcount, that's the big I mean the big question or an evolution because at the end of the day we will always be a people based business. I mean we have now 300,005, right? 305,000 people at Accenture. But indeed, we are trying to bring more productivity and this is exactly what Bhaskar and Mike as well alluded during their presentation when they're talking about intelligent IT. What I like the most of course are the mini bots of my friend, Mike Salvino. This machine learning who are improving the productivity and you're starting to break the revenue to people or at least to improve significantly the productivity. So could you tell us a little bit more about Carr on this Intelligent IT and how you break people to revenue? So I'll say that intelligent IT has got 2 components. In one part, it radically improves the productivity where it reduced the human effort, it reduced the improved the throughput. And in that case, it reduced the productivity and need for people are less in that case. So that is what is going to happen as we do more and more automation, more and more technology. Other side of the intelligent IT what we talked about, it is brings more analytics, it's more business value and which helps us to drive the engagement and get more value out of that and the client can get that value. We get lot of insights of the application the way it is running and through our analytics and that helps client to drive the business better. So that is a more of a business value part of the Intelligent IT. So there are 2 components. The first part definitely helps us to drive more revenue productivity. Okay. We're going to take the last one. I don't want to create any frustration. There's going to be another session. We will have a 30 minute break. So if you're lucky, you can extract some answers from our management who will be participating to the break as well. But the last one. Yes. Thanks. It's Darrin Peller from Barclays. Just look I mean over the last few quarters, really the last couple of years at this point, we've seen more evidence of demand from Europe for more of that offshoring. And I guess you've referenced labor arbitrage, but it's obviously more than that now. And I think we've seen you guys call out the last couple of quarters some impact to margins associated with some shift you've seen to some extent with clients looking for more of that. I guess we just like to hear from you guys on how the GDN is really transitioning and is it really being a have there been any success stories with some of your clients in Europe shifting over to that strategy? We get a lot of questions from investors on what that could mean for your margins. While it might be sort of a little bit slower now, it potentially could expand more materially going forward if you're very successful in that strategy? Yes. I will definitely answer on this European question. Indeed, if you look at the way I mean, the world has been adopting outsourcing whether in the form of application outsourcing or in the form of business process outsourcing. You had the I'm always calling down Anglo Saxon corridor. I mean the U. S, U. K, Nordic countries being the early adopters. Then you have Germany, Netherlands and indeed 3 big countries in Europe were late in adopting the outsourcing France Italy Spain. If you look at this, it is moving now and it is moving quite rapidly. And frankly we are very pleased with the steps outsourcing business powered by the GDL is moving in France and in Italy. Probably Spain is remaining a more complex and difficult country. But as you know they are still facing some complex economic conditions. And so I would say Spain is probably not yet out of the woods. But if you look at now Italy, France and I would add Germany as well all this and I'm talking about the G2000 again. The company we are working with they are all extraordinary global. They need to move to this digitization on one hand rationalization on the other hand and rationalization has a lot to do with BPO application outsourcing and driving new models. And of course, if I'm taking France, we have recently and I can't mention the name, but we have recently one of the major win where Bob Sell and Mike Salvino been joining forces between Communication Media and Technology and Operations to be the partner of the restructuring of 1 of the largest electronic equipment company, right Bob, where we are indeed providing all the operation support, I guess F and A, HR. We are always doing all the IT support for this electronic industrial equipment company and communication equipment company at scale. And that's probably one of the largest operation and indeed it is based in France. So we can see that happening. I mean the second question and I'm sure there are going to be questions on margin and the role of the GDN. David is going to be delighted to answer all the questions regarding margin in a few minutes. So with that being said, I guess it's probably time for a break, enjoying coffee. The management as well as Accenture and leaders will be around. So feel free to tap on their shoulder and ask your question. We need to be back at 11 sharp for our friends in Audiocast. Talk to you in 26 minutes. Ladies and gentlemen, we will now take a break. Please return to your seat for a prompt restart at 11 am, at which time the audio cast of the presentation from Accenture's Chief Financial Officer, David Rowland, will begin. Thank you. Ladies and gentlemen, please welcome back Chairman and CEO, mean they love doing that. So I and I love that voice. I mean it's a could you do it again. I mean it's so it is so great and that's just fantastic. Yes, thank you for welcoming me back. So now we're going to move to the last section of our morning. And again, welcome back to the people participating with the audio cast. It's my pleasure to introduce David Rolland, our Chief Financial Officer. He's probably the one you've been expecting all the morning the most. We will give you all the information you need regarding the financial performance at Accenture and how we are planning to drive sustainable and profitable growth. So over to you David. We sometimes talk about something called expectation management. So maybe you everything they need, maybe not. We'll see. Well, at least everything you want. Exactly. So thank you, Pierre, and good morning to everyone. It's really great to be with you this morning in this forum and to have the opportunity along with my colleagues to talk about our business and to really showcase what we think is a truly distinctive story and one that sets us apart from our competition. As I think about a year ago, I stood up here, there's been a lot that has happened in our business over the last year. And as you listen to our leaders this morning, I hope you have a better understanding of why we feel so good about our business from the focus and clarity of our growth strategy to the pace and scale at which we've executed against that strategy over the past year and certainly to the strength and depth of our leadership team, which we think is unequaled in our industry. So for the next 15 minutes or so, I want to build on what you've heard so far and to talk about how our strategy translates into an attractive shareholder value proposition. And then, first, I want to talk about our guidance as part of that. And then secondly, I want to talk about 3 key imperatives for driving sustainable shareholder value. And for each imperative, our key areas of focus and why we believe in our ability to deliver. And then as Pierre mentioned, following my comments, he will rejoin me on stage and we will do our best to entertain your questions. So let me start by just briefly summarizing the key elements of our business outlook, which I covered just 2 weeks ago, but in an effort to make sure that everyone is kind of grounded in the same set of facts. So starting with bookings, our range of $34,000,000,000 to $36,000,000,000 aligns with our book to bill targets and supports our revenue range. Regarding net revenues, we see a range of 4% to 7% growth in local currency, with the midpoint being just above the 5% growth that we delivered in 2014. Digital related services and operations will continue to be important drivers of our growth next year. And also we expect inorganic will be closer to 1% as compared to the approximately 2% contribution that we saw from inorganic in 2014. Modest margin expansion continues to be an ongoing objective and we're targeting 10 to 30 basis points of expansion in 2015. Our EPS range of $4.74 to 4.88 dollars yields 5% to 8% growth in USD, higher than revenue growth and reflects a 0 point 12 dollars or 300 basis point headwind resulting from a negative 2% FX and a slightly higher expected tax rate. And we think it's important to evaluate our EPS growth in that context. And finally, we see free cash flow in the range of 3 point $5,000,000,000 to $3,800,000,000 which is roughly 1.1 times net income. So just reflecting on our business outlook, we have many reasons to be encouraged for continued growth momentum. And while we have good visibility for the first half of the year, our business outlook provides for a variety of scenarios. But I can assure you and as you've heard me say before, we work every day to land the year as high in the range as possible. So now that I've recapped our 15 business outlook, I thought it would be useful to review 3 essential financial imperatives that underpin our ability to drive shareholder value in fiscal 2015 and beyond, and the basis for why we believe these imperatives are achievable. Durable revenue growth, how our growth model serves us well and is the basis for continued profitable growth above the market. Sustainable margin expansion, why it is that we continue to see our business delivering modest margin expansion and how the margin expansion fundamentals that you identify with Accenture remain very much intact and strong cash flow with a disciplined capital allocation model, our view of the characteristics of our business model that should continue to yield strong cash flow and our ongoing commitment to invest for growth, while returning excess cash to shareholders. So starting with durable revenue growth, the ultimate goal of our strategy is to create an engine for sustainable growth above the market. And in this morning's session, there were many illustrations of our growth strategy action, but in an attempt to boil it down to relatively few words, I would highlight 4 key elements that are truly unique to Accenture. 1st, our diversified portfolio creates a strong foundation for durable growth and allows us to navigate the ebb and flow of the broader market. And this was well represented by Pierre's comments as well as others from the diversity and scale of our industries and our geographic markets to the diversity of our client portfolio, all important elements in creating durability of growth. 2nd, our differentiated capabilities and offerings are unmatched in the marketplace. You heard many examples of this throughout the morning, from our highly differentiated GDN capability to our industry leading digital capability to our unique position in the ecosystem, just to name a few and there are many others. 3rd, our ability to execute our acquisition strategy at scale. Over $1,500,000,000 in the last two years across 30 transactions, resulting in an important contribution to our growth from an inorganic standpoint, but also becoming a significant growth accelerator for our organic business. And then finally, our ability to drive differentiated growth across 5 key dimensions of our business. And so let me just explain this in a little more detail. At the heart of our growth strategy, we're focused on driving market leading growth across 5 dimensions of our business, each with unique characteristics in terms of the market, the competitors and the capabilities and offerings. And this morning, you heard Pierre and the other leaders talk about our business in these terms. So we thought it would be useful to size our business so that you can understand the approximate scale of each and really the extent to which we've rotated our business over the past few years to the areas with the highest growth potential. So Mark talked about strategy, which contributed roughly $2,000,000,000 of revenue in fiscal 2014. Management and Technology Consulting comprises about 30% of our revenues and includes our management consulting offerings as well as technology consulting, which includes complex high value, high impact work across the system development lifecycle and advisory work for the IT function. Bhaskar talked about application services, representing just over 40% of our business and includes services that span the full application lifecycle covering building, enhancing and maintaining applications, both custom and packaged software in both existing and emerging technologies. And Mike talked about Salvino talked about operations, a $6,000,000,000 business representing about 20% of our total revenues. And then finally, Mike Sutcliffe, the other Mike, talked about digital, which crosses all four of these dimensions and is a $5,000,000,000 business representing about 17% of our revenue. And then one final piece, just picking up on some of the comments that Pierre mentioned is our ERP business. So let me comment on it in the context of what I've just described. As a reminder, and Paul referenced this as well, we define ERP to include a subset of application software, both license package and cloud based SaaS, including solutions for finance, HR and manufacturing, but excluding Accenture operations and areas beyond ERP such as CRM. And that's a standard relatively standard definition that we follow when we talk about our ERP business. And then following this definition, ERP represents roughly 20% of our revenues, with the majority of ERP work falling within our application services and management and technology consulting dimensions. So the majority of ERP would span those two dimensions as I've just described. It's also important to note that approximately 40% of our ERP revenue is being delivered as part of a multi year contract, meaning 60% or roughly 12% of Accenture's total revenue is project based ERP work. So there you have it. I think most everything you wanted to know about the major dimensions of our business. But the important point is what do you take away from this? And I would suggest that there are 4 key points. 1st, we have a unique growth strategy and are laser focused on executing that strategy in each of these five dimensions. 2nd, we have scale in each business has a foundation for being a market leader in all. 3rd, we've undergone a major rotation in our business, rapidly growing and achieving scale in the new, while continuing to maintain our strong position in the other parts of our business. And finally, and you heard this earlier today, what makes Accenture truly unique is our ability to deliver services in each individual dimension, while also having the unique ability to integrate end to end services across multiple dimensions to drive significant transformation and business value for our clients. So moving to our second imperative, sustainable margin expansion. I stated earlier that our ongoing objective to drive modest margin expansion continues to be a top priority. And we believe our business and financial model allows us to achieve this objective by managing our business with rigor and discipline in 4 specific areas, which provide opportunities for operational efficiency. In fact, I referenced these 4 areas on our earnings call a few weeks ago. So let me just briefly summarize them again. 1st, just as we recognize the uniqueness of each of the 5 business dimensions for purposes of optimizing growth, we also recognize the uniqueness of each dimension for purposes of optimizing profitability. In fact, each dimension has a unique economic profile in terms of the price points, the cost to serve, the selling cost and the investment requirements. And we intend to drive the economics for each dimension with a fit for purpose mindset, optimizing the profitability of each dimension and therefore the business as a whole. 2nd, Accenture is increasingly becoming a portfolio of businesses and I think you heard that in many different flavors from the comments earlier today. As such, we're raising our game in optimizing the overall profitability across the diverse portfolio of businesses that we have within Accenture. 3rd, executing our talent strategy is an essential element to delivering our margin expansion goals. In this case, it's all about having a strong bias for being more granular, more fit for purpose, so that our talent strategy is uniquely aligned with the diverse parts of our business. And in doing so, we have the opportunity to manage our overall payroll structure more efficiently. And finally, we have ongoing efforts to drive higher levels of business operations efficiency, ranging from travel efficiency to things like leading edge and more cost efficient training to the ongoing transformation of our management functions such as HR and Finance. Each of these four areas offer opportunities to not only support our goal of modest margin expansion, but to create the necessary headroom in our P and L so that we can invest in our business in a differentiated way to support our profitable growth objectives in the future. The 3rd essential element of our shareholder value model relates to our cash flow and capital allocation. This is an important element of our financial model and a truly distinguishing characteristic of Accenture, both in terms of our ability to generate significant cash and our know how for productively using our cash to drive shareholder value. And looking at our business, we believe that the 4 drivers of cash flow remain intact. We're committed to managing the efficiency of our cash operating expenses. We'll continue to have a capital light business model. We'll continue to be disciplined and industry leading in our DSO management. And while there's an ebb and flow of large cash outflows, which can vary greatly year to year, we don't see any structural changes in those items. On that basis, our business outlook for cash flow in fiscal 2015 is a 1.1 free cash flow to net income ratio, which is very consistent with our historical norms as you see on the left hand side of this slide. With regard to capital management, we believe our approach to capital allocation is as relevant for the future as it has been in the past. The fundamental tenet is a very strong capital allocation strategy, which continues to support the growth of our business and return the surplus cash to our shareholders. We continue to target roughly 10% of our operating cash flow to capital expenditures with roughly 15% to acquisitions, but certainly have the ability to ramp up higher than that as we've demonstrated over the last couple of years, leaving a significant level of cash remaining for share repurchases and dividends. So we have a durable capital allocation model, one that is established and well understood by our investors and one that we believe will continue to serve us well in the future. So to briefly summarize, there are 2 key points that I want you to take away from my comments. First, fiscal 2015 is about continuing to execute our growth strategy at speed and extending the momentum that we have in our business. We continue to be focused on growing faster than the market, expanding our margins and generating strong cash flow. 2nd, we believe that we have a durable model across the 3 essential elements of driving shareholder value and we're intensely focused on executing in each of those three areas. Having said that, and you've heard me say this before, we take nothing for granted. We know that we have to work hard every day to deliver on our potential. But I feel very good about our business, how we're positioned for 2015 and beyond. So with that, Pierre, we'll I think open it up for questions. Thank you, David. So I guess you have now a sense of the overall story of Accenture. I mean from our strategy, how we execute, where we invest, what's making us relevant, differentiated and competitive. And now the final piece is all around making us having a very clear road map on how we are creating shareholder value with a very predictable business outcome. And we have a lot of time for questions. Hi. Ashwin Shirvaikar from Citi. Appreciate the high level of information first of all. That was quite useful. I guess 2 part question. One is when you look at the growth parts of the company that you highlighted today digital 17% of the business growing very fast, obviously, BPO growing fast and so on. What's the offset? Because overall, you have probably a third of the company growing double digits, but your guidance is organic guidance is mid single. So what's the offset? And more importantly, I guess, in view of your transformation of the company, how long are we sort of going to be in this air pocket of sorts before we come out on the other side? And then I have a free cash flow question. Okay. Well, first of all, I would say that 7% growth in the 3rd quarter and 8% growth in the 4th quarter is I would say is pretty good evidence of coming out of the so called air pocket. But we've called out that while many if not most of the dimensions of our business are really generating good growth. We do continue to have some concentrated areas that are more challenged. We specifically talk about natural resources as a specific industry that is going through more cyclical pressures than anything else. And then we also have one other industry, which we've also talked about insurance, which is more related to a particular client situation. And so we really have if you look at our resources operating group in particular, natural resources specifically, that is in the mix of our overall growth. If you look at our other 4 operating groups, even taking the Q4 as the most recent example, the growth profile across the other 4 operating groups is quite strong in aggregate. Yes. And you might add on where we're putting more attention from a geographic standpoint. I mean countries such as South Africa where we're putting some recent effort. So it's always a combination of an industry and a country where we have more work to do. So we are looking at this weaker place and taking actions. Yes. Got it. Hope that helps. Thanks for the question. It does. Just a quick free cash flow clarification. The 1.1 times. Yes. Is that a go forward pretty stable number we can I mean it's a pretty good impressive number? It is lower than it's higher than last year, but lower than the prior 3 years before that. But is $1,100,000 something we can sort of take to the bank so to speak? Yes. Well, I'm not guiding for anything beyond fiscal 2015 to be clear. In fiscal 2015, that's our that is our view. I guess one way I would think about your question is that and I realize I might have gone through the slide fairly quickly, but I think the slide will be posted. If you look at what our historical ratio has been, really fiscal 2014 was the anomaly for the reasons that we mentioned primarily in our Q2. If you look at the year before that, while the reported ratio was below 1.0, there were 2 unusual items in that year, which you'll recall, one of which was the top off of the pension program in the United States that if you were to look at the structural cash flow in that year adjusted for those two items, it would have been 1.1 as well. And so if you believe that history is a predictor of the future, you would say that our historical norm has been 1.1 or higher and what we're guiding to for 2015 is 1.1. Yes? Hi. It's Keith Bachman from Bank of Montreal. I wanted to ask you about the operating margin expansion. If you start with this past year, your operating margin expansion was a little bit lower than the historical norm. And during the course of the year, you mentioned compensation or pricing, I should say. Could you talk a little bit about as we look at this coming year, what you think the puts and takes are that would take you to the low end or the high end of the range? In particular, how you're thinking about the competitive landscape, particularly the forces of pricing? Is that going to be an impact? And then I have a follow-up. Thank you. Okay, great. Want me to jump in on that? You're the master of margin, David. So let me work backwards on it and start with pricing. First of all, I think all of us would characterize the pricing environment as continuing to be very competitive. Having said that, when you look at pricing as defined as being the margin of the work that we sell, the margin percentage of the work that we sell, we did see stability in the second half of the year and in fact some improvement over the pricing pressures that we had called out in the first half of the year. And as you can imagine, even recognizing that the environment is competitive, we challenge all of our business runners to continue to drive pricing on a positive trajectory. Now it's our challenge to deliver it against that, but we did see some stability in the second half of the year. In terms of the puts and takes, at the end of the day, the number one thing that drives our profitability is the level of payroll efficiency that we have in the business. And there are many aspects to how we manage payroll efficiency. There 1st of all, it relates to the level of compensation increases we give across our workforce. Utilization is another factor. Our ability to efficiently managing the manage the pyramid within each of our talent segments is another factor. And then our ability to manage, for example, the mix of resources between GDN, non GDN would be another factor. And so I would say generally speaking, where we land in that 10% to 30% range is largely going to be driven by our ability to execute with precision against all of the levers that we use to manage our payroll. Now I called out 4 areas of focus for margin expansion: portfolio optimization fit for purpose in each of the 5 dimensions Talent strategy is a way to optimize payroll and business operations efficiency. Payroll, those are not mutually exclusive. Payroll is a component of all of those. And so but the biggest at the end of the day, managing through those four areas that I called out as well will impact payroll efficiency and that will be the biggest driver. Thank you. Sure. Thank you. Hi. It's Jason Kupferberg from Jefferies. Two quick questions. First off, if we look at the midpoint for argument's sake of the fiscal 2015 revenue guidance, can you give us a sense of what percent of that you've got very high visibility on in terms of contractual commitments versus maybe where you were this time last year on fiscal 'fourteen numbers? And then can you just comment regarding M and A? Obviously, you've opened the aperture there a bit the past couple of years. Would you do an acquisition of a big enough size requiring you to add debt to the balance sheet? Okay. You want to comment on our acquisition I'll come back and pick up on the one. Sure. I'm going to pick on the acquisition. So on the acquisition strategy, it's always been, I mean, very clear. It's very clear on, as you said, the cash allocation. We mentioned that we every year we would deploy around 15%. I mean to reiterate it might be 50% plusminus but probably more plus than minus given what we did this last couple of years. So 15% to 20%, that's the point number 1. So we have this very clear framework. 2nd, we continue looking for very targeted acquisition in some very specific areas of our business. So all of this is orchestrated with our growth and strategy Chief Growth and Strategy Officer working with the different businesses. As you can see, of course, we are investing in high growth areas. Historically, a significant part of it been through Accenture Digital. You heard Fjord Aventa Accuade, I foresee more recently. Another piece has been around operations and especially I'm thinking about the last one with Procurion which is extremely successful. So we have a very clear framework on where we want to invest. We are making targeted acquisition because our growth model is still growing organic. And so we're making acquisition in the context of accelerating access to unique capabilities such as pure creative design in the digital world and then we can build organic on top of this acquisition. So that's always been our model so far and we will continue with that model. And finally, we are watching carefully everything which is happening in the marketplace. And of course, we are prepared to move if that would make sense for in executing the strategy of Accenture and for shareholder value creation in case we will have opportunity to do a slightly bigger transaction. But that's really in that order. Yes. And let me just comment on the first part of your question, the confidence in the revenue range. And maybe this color will help, because we always like to talk about our business in terms of the 5 operating groups. And what I would say is that when you look at CMT, products, resources, financial services, those 4 operating groups all exited the year on a very strong trajectory. And in general terms, when I look at those 4 operating groups, I would say that each one of them has the potential, if not the expectation to be at a minimum at the Accenture average or better. When we look at on the other hand, we have resources and we do feel good about resources being better positioned for sustainable positive growth. And we are encouraged for several reasons. When you look at the 4 industry segments within resources, 3 of those industries we've seen real progress in as well as we exited the year with the biggest challenge being in natural resources. But we think the natural resources is still at a point in the cycle where resources will be positive but below the average for the year. We also feel very good if you step away from the operating groups. We feel very good about our ability to continue to drive strong growth in digital. We feel very good about the visibility and the hand that we have in Accenture Operations in particular I would call those two areas out. Now where we land in the range is ultimately going to depend on the extent to which we can build on the momentum across the 4 that are all very well positioned, the degree to which we do that. And then also we need to deliver on our expectation that resources can be solidly positive, but yet still likely below the average. So here? Jim Schneider from Goldman Sachs. I was wondering if you could comment on the operations and BPO business for a moment. Specifically, is that an area and it's figured prominently in some of the client vignettes that you mentioned talked about earlier. Is that an area where you intend to grow perhaps a little bit faster? Is it an area where you would intend to do more M and A potentially? And can you maybe talk about the impact of that potentially on margins and how you think about the growth in that area versus the margin profile and margin expansion opportunity? Yes. I guess I will take the beginning. I'm sure Mike could build on that and maybe we can talk around margin. But when you look at operations, what it is we want to achieve is at the end of the day our strategy is to be end to end from strategy to project execution, digital and technology and running operation on behalf of clients. This is our definition of end to end. Why we're doing that because this is what our clients want the big and large corporation and they want that because on their agenda you have all these digitization on one hand and rationalization on the other hand. When you're tackling the agenda and rationalization rapidly you get into the discussion with clients around we would like you to operate on our behalf part of our business so we can concentrate on the core and channel our investments on what's core for us. So that's why you see all these operation agenda going up. But if you look at 3, they want a different value proposition today. In the past, you have this famous lift and drop, you're taking my operation, You're doing the same cheaper. It's not the case now. No one in the industry want to have the same cheaper. They have something new better where we invest on platforms and we provide the service which is much better than the service provided by the client. I'm thinking about Accenture Post Trading Services, we announced recently which is a business which is going to be one too many. We decided to offer to banks on post trading services on the leading edge platform we are investing in which is Broadridge. So it's not about taking the operation and moving at a cheaper cost. It's about moving them to a litigation platform and this is what we do in each and every of your flywheels Mike. We are providing better solution and better operations. So we are investing in lieu of our clients. And then finally, we're now moving to another generation of operation which is the one we like a lot which is going to be rich on everything. It's going to be rich on technology. It's going to be rich on analytics. We're going to provide much more value and it's going to be delivered differently as a service. So when you look at this, it's a profound revolution. And to some extent, if you're looking at this business, you have the revolution in the digitization. Mike and all of us are driving this revolution on making everything more digital, digitization of the operation or digitalization of the business. And the other revolution is running operations of our clients from an infrastructure standpoint and from a business process standpoint in a way which is going to be radically different from what BPO or infrastructure was 10 years ago running data centers or running operation the same cheaper. And we decided to significantly invest in these two areas because they are clearly responding to a growing need for our clients. So that's why we've been very deliberate in channeling our investments and repositioning our portfolio of business on digital and on operations given the nature of the demand and as well the differentiation we can drive to the business. And we believe we could do that while maintaining or expanding our margin, right, David? Correct. Yes. I mean our goal for each of these businesses is to have market relevant profitability. And in typical Accenture fashion, we want to be that's the minimum expectation. We want to be better than the market because we want to be better in everything we do. And we're not going to comment specifically on the margin of each individual business, but we feel very good about profitability of our Accenture Operations business. When you look at what, let's say, the market standard would be for profitability, that business performs very well. This lady? David, can you talk a little bit about the long term trajectory on operating margins, meaning for many years, right, increased leverage of the use of the GDN has been providing significant leverage on margins, right? I think it was gaining at about 3 percentage points per year for 5 or 6 years. That has now slowed down dramatically, suggesting that you've kind of run out the runway on using labor efficiency. So not just solving for 2015, but like looking out further, what do you see as sort of the next play, the next leverage point? Is it pricing? Is it platforming? Is it something else? How do you think about that? I can take the I mean the you want to go ahead and jump in and I'll anchor draft on to you or I look however you want to do it. I love answering questions anyway. So no, because I have a point of view and I love sharing my point of view. I yield the stage. We did when I would like to listen to me. So here, many people listen. By the way, if you haven't figured out this is something I do regularly. Yes. From labor arbitrage to productivity to automation and to platform. This is what is going to be in our industry. So I mean you're right. We will always find some way of improving the labor arbitrage. But the way one has been completed these are 10 years. And now and I'm thinking to my friend Bhaskar or even I mean Mike when you're mentioning your famous yeah generation and your new robot your minibots and the intelligent IT. I mean the 2nd wave is around driving more productivity. And it's all the program presented by Bhaskar around more automation, intelligent IT all what we are doing and all the minibots so the machine learning tools and technique we can introduce in the processes so you can replace an operator with the system and start breaking the revenue to people equation. So that's going to be I think we're going to get to much more productivity. And so the potential is more ahead of us by using these new automation technologies. And then you have the platform because with the platform and especially platform as a service then you're moving to the one to many place. I mean this is the hypothesis and the value proposition of the as a service. You have the famous multi tenant platform. So you're investing once, which is what we are doing with post trading services or many of the operation you're driving, Mike. And then you have your platform and you're going to serve multiple clients not only from IT but as well from a business process standpoint. That's why we soak into a vest early of the curve on this business process as a service. And the only way to get prepared for Business Process as a Service was for us to combine infrastructure platform with business process. Bear in mind that indeed in what in 2,007 we invested right Paul in cloud announced in 2,007 so ahead of the curve to start understanding what this businesses could be for Accenture. And now we are leading with Accenture Digital in all these Mac technologies. To a great extent what we are doing with Mic and Operation by combining infrastructure and business process is to start thinking about the future and inventing this platform as a service which is going to be the ultimate solution for productivity. Right Mike you would agree? Well done. Mike would have said that much better than me, but I felt like doing it. And I would say as well, the four areas or opportunity areas for margin expansion go well beyond fiscal 2015. Now we I'm not guiding on margin expansion beyond 2015, but if you look at those each of those four areas, there is a lot of runway for us to get the yield out of the actions that we can take. I mean, what Pierre is talking about, this whole fit for purpose mindset around recognizing the discrete economic or the economic profile for each of these pieces of our business and then managing and driving everything we do so that we are fit for purpose in the way we price and the way we structure our delivery cost and the way we invest and the way we sell fit for purpose for each of those dimensions as an example. And the things we've talked about in terms of automation, that's one of many tools we can use to be fit for purpose in each of those businesses. So that has a lot of potential, we think is one example. We have a question there and then you okay. And we're going to move up and you're here. Hi. It's Brian Essex from Morgan Stanley. Thank you for taking the question. I wanted to circle back to another question that was asked earlier, which I'm sure you're tired of by now, but it's application migration. And if you think about the price compression that you made reference to, but then the more the much more efficient environment, I think a lot of investors are worried about application maintenance and the price pressure on application maintenance. But if you think about how more efficient the application development, testing and delivery model is now than it used to be, All these toolkits, API networks, much more efficient process there. How do you think about price compression? How much is in the application development, testing and delivery portion versus the maintenance portion? And how do you think that you are differentiated to absorb that compression versus your peers? Yes. We might also have Yes. I mean, I'm not sure we're going to look at the margin at that level of granularity around the sub segment of our business. But Batkar what you might just highlight is indeed how you're bringing more routine, more intelligence, more productivity in all this testing. So you're moving to the next level of productivity gains. So I talked about the intelligent tool and use of assets. Very fundamental of that is to drive the productivity. I believe that way we used to do the develop the software in 5 years, 10 years back that has completely changed. Today, we are driving significant productivity using these intelligent tools and automation. So I feel that that will be the new way of doing the work in the future and that will definitely drive the revenue productivity in the coming days. Yes. Thanks. Yes, it's Tien Tsin again from JPMorgan. Just want to the revenue disclosure is great. I'm just curious thinking back to bookings, given all the changes going on, how should we change our thinking around bookings and book to bill? I know we've talked about Avianpaired ACV as another measure to consider because TCV is such a tough thing to track in terms of duration. So can you give us any help on thinking about all of this and the impact on bookings? Thank you. Yeah. I mean, I guess, as it relates to 15, the guidance range of 34 to 36 is really continues to be grounded in our book to bill targets of 1 to 1.1 for consulting and a minimum of 1.2 for outsourcing. And those ranges tie to the 4% to 7% revenue range. Tien Tsin, I think as we continue to evolve our focus on managing these dimensions, we may over time refine and even share book to bill expectations that in a way different than consulting and outsourcing, but we're not at that point yet. So I mean, really all I can tell you or maybe the important thing to focus on is that throughout fiscal 2015 and potentially beyond, but certainly in 2015, we're going to talk about our business in total for the 5 operating groups and for consulting and outsourcing. And we'll continue to look at our bookings and judge them as being and make judgments on them based on how they stack up against our book to bill targets. And so in our dialogue over the next four quarters, that's still going to be front and center. Could we have the mic? And I promise you, we'll come back to you. Thanks. Sarah Gubins from BofA Merrill Lynch. Just following up on that, could you talk about how you're thinking about average project lengths in your various segments over the course of fiscal 2015? It's been a subject of a lot of discussion over the last couple of years. And I'm wondering if we should see any shortening or if in fact in the as we think about the end to end solutions if in fact that should continue to lengthen? Thank you. Yes. We've not we don't anticipate anything dramatically different in 2015 as compared to what we saw in 2014. One big swing factor will be the number of large mega length. But we don't really see any, I guess, notable structural difference in the characteristics of the contracts what we see in the pipeline as compared to what we've booked over the last, let's say, 2 to 4 quarters. And we've seen a good I mean if you look at last year indeed in this kind of midsize higher velocity project have been coming back in 2014. Yes. Tien Tsin referenced you've heard us talk about annual contract value as a metric that we focus on internally. And I will say in 2014 that has made a lot of our business runners and client account leads more focused on selling projects that convert to revenue in the current fiscal year. But that focus in 2015 will be similar to what we started to focus on more in 2014. There won't be any difference. With probably fewer objective. I mean we had that discussion and you're referring to this I mean duration and the kind of velocity for a project to move from sales to revenues. And indeed we set some more specific targets in term of ACV annual contract value of our sales. So we are focusing the organization in driving this. So sales converting in revenues more rapidly. Yes. Thank you. Jamie Freeman at Susquehanna. I was wondering if the company might have any assets that you would contemplate spinning out. And if that's too blunt a question, if you could share with us a framework for how it is that you think about share about maximizing shareholder value as part of your portfolio optimization comments earlier? Yes. As part of managing our business, we have a disciplined process that we go through on a regular basis where we look at all of our assets, those that are performing better than expectations, those that are not performing to expectations. We give consideration for where those assets are in their maturity curve. And we use that as a framework as you would expect us to do for really thinking through thoughtfully about, for example, are there assets or parts of our business that we need to double down on and invest more for growth? Or do we need to have other types of interventions based on the performance. But we and in fact of late especially as our business is becoming more diverse as we've talked about in terms of the businesses that we have within the business, we have even more focus on that and that will be an important part of our management rigor and discipline as we drive the business forward given the way Accenture is taking shape. And just to add a color on this because I understand where you're coming from on this and whether we could create more shareholder value by building up some of the businesses which could live on their own and so forth. So I mean we're looking at this on a I mean systematic basis and so far we did not get to that conclusion. Now the other point you need to bear in mind is our positioning and our volume proposition is to take our different businesses and to channel to clients through the OGs. So even if you are looking at each and every business as a kind of not standalone but fit for purpose which is a terminology I like a lot which is we need to make sure that our costs are aligned. We have very clear set of competitors. The pricing is at the market level. The costs are at the market level. But at the end of the day and it's true for Accenture Operation, Accenture Technology, Accenture Digital and Accenture Strategy and everything we do, we are taking these solutions and we are channeling them to our clients and Sander explained that very well in his section. So our businesses most of them all of them are dependent on the channel. So this is the way we are organizing Accenture. So we are not holding with a series of totally independent businesses you might consider carving out to externalize the value. So for us the overall value is to take the businesses and channel to the clients. That's the power of the integration even if indeed we are looking at each and every business on a fit for purpose basis, but not as a kind of standalone. So that was a good question to clarify. We have one here and one here, okay? Those are probably the last 2. The last 2. Yes. 2 good ones. 1 here and then here. Thanks. Moshe Khatri with Cowen. David, looking at bookings, I think you indicated that Q1 bookings are going to be slower or maybe weaker. Maybe you can talk a bit about where the sources of weakness are? Is it more on the consulting, on the outsourcing side? And then is there a risk that you're going to have down the road to kind of readjust your booking expectations for the year? Yes. I think I referenced in the script that bookings would be a little lighter perhaps in the Q1. And it's really just a signal as we do at times so that you don't think we are surprised when the bookings come in closer to the range that we kind of see for the Q1. There's nothing that we're concerned about with respect to that in the context of the $34,000,000,000 to $36,000,000,000 that we've guided to for the year. And in fact, when we look at our pipeline, we feel good about our pipeline. We're always focused on trying to grow it. Pierre always wants more origination and higher volume of the pipeline. We will focus on that certainly in the first half of the year as we always do to make sure that we're well positioned for the second half of the year. But we feel good about where our pipeline is going into the year. It supports the $34,000,000,000 to $36,000,000,000 range that I guided to. And the reference that we made to the Q1 was simply to signal that there we've come off of many quarters where the bookings were just very, very high. And part of it is just to signal the expectation that that is driven sometimes by the high volume or a volume of large deals in a particular quarter that creates some lumpiness. So we were just trying to set the expectation that the first year the Q1 will not be one of those very large bookings quarters like you've seen in the recent, let's say, 4 to 6 quarters in certain instances. But we feel good about the 34 to 36. We feel good about the pipeline and how it supports that. And we're permanently putting massive pressure on our business leaders to grow the pipeline, especially with bobsled, right? Yes. It was leading our CMT. I'm mentioning that because Bob had a spectacular year. So thank you, Bob. And just a follow-up on bookings. Was there any in a typical year, which part of your bookings are generated from recompete to renewals? And was there anything unusual this fiscal year on that part? There wasn't anything particularly unusual. I mean, we have re competes and renewals across the entire portfolio. I mean, generally, you're talking about multiyear contracts. So generally, you're talking about what we've referred to as outsourcing. But within outsourcing, we have recompetes renewals as just part of our normal flow of our business. No, nothing unusual regarding the numbers. Final question. Ashish Sabadra from Deutsche Bank. Thanks for squeezing me in. My question was about the consulting growth follow-up to the questions that were asked earlier. But just in terms of consulting growth, that's accelerated from in the second half of the year, but it's still lower than what we've seen historically, which was high single digits, low double digits. So in terms of looking at consulting, when will we see that kind of an inflection point where consulting moves from low single digit grower to a more like a high single digit grower? And if you can provide that in the context of the 12% revenue exposure that you talked about from ERP development work. So just help us frame that kind of a debate on the inflection point. Well, one comment I'll make on consulting growth is that so we had 5% in the Q3, 4% in the Q4. But it's important to understand that the what we've been talking about with respect to resources and natural resources has actually had is was represented primarily in consulting. And so when you look at the overall 4% number in the 4th quarter as an example, resources is a drag to that number. And if you look at the other 4 operating groups, the consulting growth of those 4 was obviously higher than the 4%. And so we have seen some recovery in our consulting growth. And there are parts of our business that have a that we feel good about that have a big consulting component like digital as an example. And as digital continues to scale that will have a bigger proportionately a bigger impact on the consulting growth rates. But it's resources in the most recent quarter as a single operating group had much lower consulting growth. The other 4 in aggregate had a pretty good growth rate. Okay. I guess it's time to wrap up and I'm sure you're all very busy and want to get back to the rest of your day. Thank you very much for attending your session here live and I'm as well talking to the people who've been following on the audio cast. I hope it's been very informative for you and you've been able to share the passion of the management of Accenture in presenting how we are repositioning our business for growth in this digital computer era. And I will let you with a quote of Churchill. I'm a big fan of Churchill. It's becoming more personal. And the quote is, if you don't take the change by the hand, the change will take you by the throat. And at Accenture, we're always taking the change by the hand. So we are investing ahead of the curve. We are innovative. We are taking major steps as you've seen to position Accenture for the future, to position Accenture for growth. You think that's through reinventing Accenture's strategy, reinventing Accenture Digital, recreating formidable position with Accenture Technology and of course being at the frontline of the next wave of Accenture operation and all of this to provide superior value, superior result to the clients you hear through our client account lead and with Sandler. I'm extremely excited leading Accenture. I'm extremely proud and I'm extremely confident that we have the momentum and we can continue making Accenture the envy of the industry. It's going to be hard work, but you can be sure that all the management team here they are all as passionate as I am to make this company absolutely a formidable company. And by closing, I would like to thank our Board. Here we have 2 of our directors and I would like to thank the Board for the support, the contribution, the insights you're bringing to the management of Accenture to make us a better company. So thank you very much as well to you. And thank you, I know whether they're listening to me to the 3 105,000 women and men of Accenture because they are the magic of the company. Thank you very much.

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