Strategic IT transformation at accenture


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Based on article published by Kellogg school of management

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Strategic IT transformation at accenture

  1. 1. Strategic IT Transformation at Accenture Presented by Sajal Gupta Roll no-101 Accenture
  2. 2. 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
  3. 3. History of IT at Accenture  Annual revenues of $11 billion  75000 employees, and more than fifty offices around the world  Accenture had the right to use Andersen's technology for one year. Accenture
  4. 4. Challenges in IT  Andersen'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. Accenture
  5. 5. Changing IT Philosophy  Internal 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. Accenture
  6. 6. 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. Accenture
  7. 7. Selecting a Platform BBest- of -breed platform •The best possible application in the market was bought for a specific need One platform approach •One strategic partner providing compatible applications •Economies of scale is achieved •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 Accenture •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
  8. 8. Management applications  Accenture 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. Accenture
  9. 9. Outsourcing within Accenture  Accenture 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 America  By 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. Accenture
  10. 10. 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 . Accenture
  11. 11. The Big Bang, Single Instance Approach  In 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. Accenture
  12. 12. New IT governance in action Accenture
  13. 13. Conclusion  Accenture 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. Accenture
  14. 14. IT Transformation Results 2001 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% Accenture
  15. 15. Accenture