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The Accenture CIO Organization teamed with the Accenture Finance and Human Resources organizations to create an Integrated Forecasting Solution that links revenue and contract cost information to supply and demand data to deliver high performance.
The solution illustrates how Accenture achieves high performance by embracing innovation to generate business results.
Accenture’s business and IT teams were asked to improve forecasting performance by leveraging the company’s financial databases and enterprise resource planning capability, scale to accommodate company growth, and move an iterative, spreadsheet-based process onto a common platform.
Accenture’s legacy finance application aggregated data, lacked modeling capabilities, bottom-up client team input, and had little transparency. On the resource planning side, the legacy tool set used Excel spreadsheets and a homegrown application unable to forecast all of Accenture’s workforce needs and provide an actionable level of detail or connect demand and supply.
The Accenture design team recognized that a truly integrated forecasting solution would combine aspects of business intelligence, business process management and enterprise resource planning, while systematically linking financial projections with resource needs. No off-the-shelf product existed that combined these elements into a forecasting solution for service businesses.
Paul Boulanger, a senior executive leading the Accenture North American Finance and Performance Management group, said: “The heuristics are completely different for Accenture when forecasting revenue and that’s what made this project so challenging. To succeed, we needed an enterprise-caliber tool to proactively run our business and fine-tune forecasts to meet market demand.”
Using a collaborative process that engaged end users throughout model development, the project team designed what is believed to be the first and only instance of a professional services firm using a single, enterprise-caliber tool to fine-tune forecasts and proactively manage the business.
This cross-functional team consisted of representatives from multiple geographies and disciplines, including finance, human resources and internal IT to incrementally test the model during development and accelerate the production time line.
Many elements contributed to the success of the Integrated Forecasting Solution model:
As good as expert wisdom and regional perspective may be, Accenture Integrated Forecasting Solution algorithms outperformed prior methodologies across the board, posting increasingly accurate results for revenue and headcount. The solution has enabled Accenture to deliver high performance, demonstrating by example what it means to pioneer transformational business solutions.
The solution outperformed expectations, beginning with the initial pilot tests that compared historical outcomes with model projections. Integrated Forecasting Solution revenue projections proved 5 percent more accurate; headcount projections proved 11 percent more accurate and payroll projections proved 10 percent more accurate.
Further, Dan Kirner, senior executive and finance capability lead for IT and the Integrated Forecasting Solution initiative, noted: “When we compared the hypothetical with the actuals, we found that we also could cut the standard deviation for financial, supply and demand forecasts in half—with the use of algorithms alone—even before the application of business judgment.”
Additional benefits have surfaced as well. Financial teams that once spent 40 percent of their time assembling data now require just half that time to gather information, while allowing more time for critical analysis and data mining.
The accurate foundation that the solution provides, along with the existing deep business perspective and knowledge within the organization, enables Accenture to improve service delivery by minimizing oversupply situations and overdue roles, boosting client satisfaction while controlling variable costs. A clear understanding of expected new business, and the effect of incremental business on available resources, will assist management with critical resource planning decisions.
In addition to its value as an operational tool, the solution serves as a point of differentiation and competitive advantage for Accenture. “We often speak to clients who are struggling with forecasting financials and headcount. Accenture is in a great position to help such clients, following our own success with Accenture Integrated Forecasting Solution,” says Greg Pilgrim, senior manager in Accenture’s finance organization.
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