Best Buy Expands Relationship with Accenture

Best Buy Chooses Accenture to Help Build Out Capabilities That Support Transformation to a More Efficient, Customer-Centric Business Model; Multi-Year Agreement Effective in Mid-July

Best Buy Co., Inc. has entered into an agreement for a seven-year strategic relationship with Accenture for consulting and outsourcing services. The agreement, designed to support Best Buy's transformation to a more efficient, customer-centric business model, takes effect on July 16, 2004.

Through the relationship with Accenture, Best Buy seeks to optimize its supply chain management capabilities, to enhance the vendor management of its customer call centers, to expand the functionality of its Web sites, and to improve the analytics and reporting that further enable its customer centricity initiative. Accenture also is to manage and further develop the full scope of Best Buy's information technology operations. The relationship is expected to provide a new and simplified operating platform that will reduce Best Buy's cost structure, including the company's total cost of ownership for information technology systems, over the course of the relationship.

Approximately 600 information technology employees are expected to transition from Best Buy to Accenture as part of the agreement, effective on July 16, 2004. These professionals are to continue working at the Best Buy corporate campus in Richfield, Minn.

"Best Buy is in the midst of a company transformation to put the customer at the center of all that we do," said Al Lenzmeier, Best Buy's president and COO. "In order to accelerate this transformation and more accurately focus our resources on our customers, we must deliver new capabilities with greater speed and innovation at reduced risk and cost. We have a long-standing relationship with Accenture, and over the years they have demonstrated an understanding of our business, culture and values. For these reasons, we believe we have selected the right firm to help us achieve our goals."

The agreement is in addition to a previously announced agreement for Accenture HR Services to provide Best Buy with human resources support. As part of that agreement, approximately 115 Best Buy human resources employees transferred to Accenture in March 2004.

"It is rare for a business at the top of its game to undertake a transformation program to reshape its business model, but Best Buy is boldly doing so," said Joe Forehand, Accenture's chairman and CEO. "To support the next step in Best Buy's vision, we're bringing deep industry and technology skills as well as the successful momentum of our decade-long working relationship."

Accenture's previous work with Best Buy has included merchandising strategy, pricing, promotion effectiveness, inventory management, store operations, and space and assortment optimization.