Accenture

Strategic IT Transformation at Accenture

Presented bySajal GuptaRoll no-101

History of Accenture

Who was the parent company of Accenture?

Arthur Anderson was the parent company set up in 1913

In 2001 Anderson consulting took the step of separating from its parent and rebranded itself as Accenture

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History of IT at AccentureAnnual revenues of $11 billion75000 employees, and more than fifty offices

around the worldAccenture had the right to use Andersen's

technology for one year.

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Challenges in ITAndersen's systems were composed of a

patchwork of legacy applications that didn’t interconnect.

Obsolete software platforms, due to which key systems and databases could not be accessed remotely through internet.

Individual accounting and human resources software systems for different offices.

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Changing IT PhilosophyInternal IT was thought as a cost center with an

assigned budget, run by technology savvy engineers with limited management involvement.

Technology priorities had political component.IT decisions made at individual levels, with

offices in different countries having their own specialized staff developing their own software applications.

This in turn increased cost of supporting IT infrastructure ,difficulty in integrating information, and attain economies of scale.

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Accenture's IT management’s new vision:-

IT as a business within a business.IT products and services conceived and driven

by needs of internal customers and stakeholders.Clear and verifiable service levels for each of the

IT products and services offered ,which are benchmarked for improvement as learning curves and better technologies enable efficiencies.

IT spending priorities determined by panel of c-level executives from different realms of businesses.

Different level of services offered for a particular technology.

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Selecting a Platform BBest- of -breed platform

•The best possible application in the market was bought for a specific need

•Pareto effect

•More depth and functionality than peer applications

•Less cost effective

•Require multiple specialization increasing training cost costs.

•Requires middleware's to connect various to share information among business units

One platform approach•One strategic partner providing compatible applications

•Economies of scale is achieved

•Lower IT support head count when dealing with a single approach platform.

•Seamless flow of information without need to design custom interfaces.

•Need to ensure that single vendor is financially sound

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Management applicationsAccenture opted for a single vendor approach

keeping in mind complexity created by 600 global and 1500 local applications

Chose Microsoft as a partner to run most of its back end IT operations as well to provide basic communication and productivity applications.

The cost benefits were significant ,for example Accenture was able to move from three distinct servers to one, for more than four hundred Novell file servers to 50 Microsoft servers.

SAP as its worldwide application provider for financial and human resource solutions and HP for its hardware needs and CISCO for all network related equipment.

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Outsourcing within AccentureAccenture was born in harsh economic times with dot-com bubble burst and difficult events of 9/11 were soon to come demanding for cost cutting at all levels.Outsourcing was Accenture's fundamental initiative to reduce costs. Accenture looked for lower cost regions like India, southeast Asia and Latin AmericaBy 2010 only 14% of Accenture's IT staff worked directly for company whereas 86% was borrowed via the Accenture global delivery network (GDN).By applying systematic approach to processes,

methodologies,tools and architectures proffesionals in GDN delivered customized IT solutions under “follow the sun” model.

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What to outsource•To make this decision Accenture divided its activities into different buckets• Processes that provide differentiating competitive

core• Processes involving highly confidential information • Processes involving tasks that were repetitive .

•Accenture was open to outsourcing routine IT tasks to capable providers.

•As outsourcing matured ,Accenture continued to seek opportunities to leverage economies of scale and of location .

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The Big Bang, Single Instance ApproachIn implementing single instance

approach ,Accenture indentified two additional approaches.

1. It was important to stay current on mission critical applications .when missions were not mission critical ,upgrades were analyzed based on “if it needs to be done ,and if needs to be done now”

2. A project approval process driven by business benefits and return on investment ensured that right processes were taken at the right cost.

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New IT governance in action

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ConclusionAccenture undertook an exemplary journey in

transforming its IT capabilities .As its global workforce almost doubled its IT

organization managed to reduce spending per employee by 60% and IT’s overall expenses as a part of net revenue by 58%.

Accenture was successful in running IT like a business ,managing a nimble and flexible IT department with some of the lowest per employee costs in its sector.

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IT Transformation Results2001 2010

75,000 Employees 180,000

$11.44 Billion Revenue $21.6 Billion

67% % of satisfied sponsors

86%

IT spend in $ Reduced by 22%

IT spend as % of revenues

Reduced by 59%

IT spend per person Reduced by 69%

0 Sourced IT staff 2,900

600 Global applications 356

1,506 Local applications 195

Multiple Technology platforms One

Not measured Benefits realized 111%

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