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Accenture’s own IT organization plays a key role in giving us the capability to deliver high performance to our clients—a linkage clearly demonstrated by Accenture’s groundbreaking High Performance Business research.
For many companies, the IT function is a necessary but expensive cost center. Accenture’s internal IT team—the CIO Organization—has demonstrated that an IT function can simultaneously cut costs and drive high performance.
As the world’s leading global management consulting, technology services and outsourcing company, Accenture has grown exponentially in the past decade. By helping companies and governments become high-performance organizations, Accenture’s revenues have increased more than 100 percent since fiscal 2002 to $25.5 billion in fiscal 2011. The number of employees has more than tripled over the same period to 244,000 serving clients in more than 120 countries.
A cornerstone of Accenture’s success is our technology leadership. Not only does the company leverage information technology to help our clients reach strategic goals, Accenture is leading a revolution in how organizations plan for, buy and manage IT resources. By shedding the nearly universal approach of managing IT as a cost center, Accenture’s CIO Organization has fundamentally improved the company’s IT efficiency and effectiveness while significantly lowering IT costs. Accenture has built a robust growth engine that is a key driver in our own high performance by running IT like a business.
As Accenture prepared to spin off from our parent company in the late 1990s, we created our own IT organization. The CIO Organization’s first order of business was to replicate and populate Accenture’s IT systems, which heretofore had been managed by the parent company. While the legacy systems allowed Accenture to make a smooth transition to independence and then shortly thereafter to go public, the CIO Organization felt those systems fell far short of what this fast-growing, global company needed to drive our business.
In 2001, Accenture’s employees numbered 75,000. To support them, the CIO Organization managed more than 600 global applications on multiple technology platforms. More than 1,500 local applications were also in use. The IT organization accounted for 4 percent of the company’s workforce, and IT activities consumed nearly 6 percent of Accenture’s net revenues.
According to Accenture research, distinctive capabilities are one of the three building blocks of high performance, allowing companies to distinguish themselves from competitors and outperform industry peers.
Accenture’s High Performance Business research also reinforces the importance of taking IT operations to a new level of excellence. High performers use IT as a strategic asset. They do not see IT only as a tool for controlling costs; they make it the conduit for truly focusing on customers, producing real-time, actionable information for decision making and enabling innovation.
To transform its operations, Accenture formed a small team led by Robert E. Kress, senior director-CIO Business Operations, to define a new IT strategy. The goal: Become a true service organization that operates like a business within the business.
After months of effort, the group laid out the five pillars of the new IT operating model:
Develop IT strategies tied directly to Accenture’s business goals.
Create an IT governance model that closely involves Accenture’s top business leaders in planning and aligning IT initiatives with corporate priorities.
Build a managed services approach that allows internal customers to better meet their business needs by choosing from a portfolio of products and service levels.
Prove value by establishing and tracking key metrics.
Stay close to customers through regular communication.
Kress’ team then developed a multiyear plan that mapped out several stages for transitioning to the new model. At the starting point, the CIO Organization looked like many IT departments, with costs centralized and no products or service levels defined. The second stage called for laying the foundation for Accenture’s new IT strategy.
The team began building the new IT plan based on the plans from Accenture’s businesses, factoring in everything from expected growth in employees and new offerings to emerging technology trends. It then set priorities and investments based on corporate goals and projected requirements. One strategic imperative, for example, was to ensure Accenture’s increasingly mobile workforce had access to an anywhere, anytime technology infrastructure that enables productivity and collaboration among employees and their clients.
To more tightly link IT to the business, the CIO Organization formed a new governance model with the support of the company’s senior management. While Accenture’s CIO and his team remain responsible for developing the IT strategy and plan, major IT decisions are shaped and vetted by the IT Steering Committee, which is chaired by the chief operating officer of Accenture and includes the chief operating officers of every line of business. “This level of participation has been critical in reaching consensus for investments in differentiating technology as well as for areas to scale back,” notes Kress.
It also began charging our internal customers for IT services when it made business sense and would motivate appropriate behavior change. E-mail and technology support are charged to employees’ geographic units to motivate the geographies to select services to meet the business needs and control demand for unlimited services. The cost of Accenture’s wide area network is handled differently; since this is provided and used globally, it is treated as part of Accenture’s overall corporate IT costs.
Sharpening the CIO Organization’s focus on effectiveness, the team has developed strong demand and supply management capabilities. IT products and service plans are closely aligned to customer needs and business decisions are based on clearly understood costs and business value.
One example of how Accenture’s IT team has been adding value to the enterprise is a pioneering implementation of communication and collaboration technologies for Accenture’s entire 244,000-person workforce. Launched in 2007, the program is designed to make Accenture people more productive by providing innovative ways for them to connect and communicate with colleagues. Here are some of the program’s major features:
Accenture operates one of the world’s largest private networks of high-definition videoconferencing.
Virtually everyone in Accenture has access to personal communication and collaboration tools.
Business networking tools are rapidly spreading across Accenture.
The immediate returns on these investments have been clear and convincing. More than 55 million minutes of peer-to-peer and conference audio calls within Accenture are now conducted each month “fee-free” via a VoIP-enabled personal communication interface. More than 4,500 hours of videoconferencing usage each month is also helping Accenture save millions of dollars in travel costs.
By any measure, Accenture’s CIO Organization has achieved a dramatically improved performance since we began running IT like a business. For one, it has made remarkable improvements in IT operations, including:
Reducing IT spending by 22 percent between fiscal 2001 and fiscal 2011.
Lowering IT expense per person by 70 percent during the same period.
Cutting IT spending as a percent of net revenues by 59 percent since fiscal 2001.
In a comparison of the world’s largest IT services companies, a leading industry analyst found that Accenture ranked best on three critical measures: lowest IT expense as a percent of net revenue, smallest IT workforce as a percent of total employees and lowest IT expense per employee.
In addition to these valuable gains in productivity and efficiency, IT contribution to the business is now clear and undisputed. Being able to measure business value at all is a major achievement. Even more impressive are the results. IT has delivered business benefits of 124 percent—strongly above the projected value from the original business cases. Not surprisingly, business sponsor satisfaction has significantly increased as well, to 92 percent today from 67 percent in fiscal 2001.
Customer satisfaction also is rising. In surveys on such matters as service uptime and the ability of tech support to resolve a problem during the initial contact, the number of satisfied and very satisfied customers grew to 83 percent in fiscal 2011, from 71 percent in fiscal 2000.
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