Running It as Business

7/31/2019 Running It as Business

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Running IT like a Business Helps

Drive High Performance at Accenture


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As the worlds leadingglobal managementconsulting, technology

services and outsourcingcompany, Accenture hasgrown exponentially in thepast decade. By helpingcompanies and governmentsbecome high-performancebusinesses, Accenturesrevenues have increasedmore than 100% percentsince fiscal year 2002 to$23.39 billion in fiscalyear 2008. The number ofemployees has more thandoubled over the sameperiod to 186,000 in 49countries.

A cornerstone of Accenturessuccess is its technologyleadership. Not only does

the company leverageinformation technology (IT)to help its clients reachstrategic goals, Accentureis leading a revolution inhow organizations planfor, buy and manage ITresources. By shedding thenearly universal approachof managing IT as acost center, AccenturesCIO Organization hasfundamentally improvedthe companys IT efficiencyand effectiveness whilesignificantly lowering IT

costs. Accenture has built arobust growth engine that isa key driver in its own high

performance by running ITas a business.


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Business challengeAs Accenture prepared to spin off from

its parent company in the late 1990s,

it created its own IT organization.

The CIO Organizations first order

of business was to replicate and

populate Accentures IT systems, which

had been managed by the parent

company. While the legacy systems

allowed Accenture to make a smooth

transition to independence and then

shortly thereafter go public, the CIO

Organization felt they fell far short

of what the fast-growing, global

company needed to drive its business.

In 2001, Accentures 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

also were in use. The IT organization

accounted for 4 percent of the

companys workforce, and IT

activities consumed nearly 6 percent

of Accentures net revenues.

Many IT organizations can tell youtheir payroll and depreciation costs

as well as expenses associated with

maintenance contracts. Far fewer

can tell you who their internal

customers are, articulate the services

they provide or quantify the cost

and value of those services. And

we were in the same boat, says

Accenture CIO Frank Modruson.

We knew we needed to move

away from that traditional IT

management approach. We

wanted to create a new model

for delivering value and providing

better support for the growing

Accenture enterprise, he says.

After all, IT is in Accentures DNA.

Since its founding decades ago

as one of the first technology

consultancies, it has been a

technology innovatorand the CIO

Organization wanted to sustain this

distinctive capability. Accordingto 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.

Accentures High Performance

Business research also reinforces the

importance of taking IT operations

to a new level of excellence. High

performers use IT as a strategicasset. They do not see IT 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.


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What Accenture didTo transform its operations,

Accenture formed a small team led

by Robert Kress, senior director-

CIO Organization 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:

1. Develop IT plans tied directly

to Accentures business goals

2. Create an IT governance model

that closely involves Accentures

top business leaders in planning

and aligning IT initiatives

with corporate priorities

3. 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

4. Prove value by establishing

and tracking key metrics

5. Stay close to customers through

regular communication

Kress team then developed amulti-year 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. Stage 2

called for laying the foundation

for Accentures new IT strategy.

The team began building the new

IT plan based on the plans fromAccentures 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 Accentures increasingly mobile

workforce had access to an anywhere,

anytime technology infrastructure that

enables productivity and collaboration

among employees and their clients.

Another was to significantly

improve IT efficiency. A key part

of the efficiency effort has been tostandardize, rationalize and centralize

IT, notes Kress. The CIO Organization

also developed a workforce strategy

that focused on building variable

resources and moving more

operations to low-cost locations.

In the quest for greater efficiency,

the strategic plan called for

moving Accenture to a single

technology platform. Of course,

like the transformation of the CIOOrganization to running IT like a

business, the transition to the sole

Microsoft platform took years and

several implementation phases.

To more tightly link IT to the business,

the CIO Organization formed a new

governance model, with the support

of the companys senior management.

While Accentures CIO and his team

remain responsible for developing

the IT strategy and plan, major ITdecisions are shaped and vetted by

the IT Steering Committee, which

is chaired by Accentures COO and

includes the chief operating officer

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.

As part of the governance model,

Accenture also instituted a benefits-realized review process for all IT

projects. In developing the original

business case, the business sponsor

establishes a baseline for business

benefits, and then reviews the

proposal with the IT Steering

Committee. Once a project is green-

lighted, the CIO Organization monitors

progress and reports on benefits.

In addition, the CIO Organization

commissioned the companys internal

audit group to randomly sample IT

initiatives and assess benefits in the

three years after deployment. The

double scrutiny makes business cases

more rigorous and moves the most

business-focused IT investments

to the top of the IT priority list.

At the same time, Kress and his

group worked to define the CIO

Organizations customers and their

business needs. In the shift to a

managed services approach, they

developed a menu of products and

services at market-competitive

costs so internal users could obtain

the right service at the right level.

For ease of customer use, the CIO

Organization formalized an online

product and service catalog.

As an example, before launching the

new approach, Accenture provided a

one-size-fits-all e-mail service. Under

the managed services model, it rolled

out five e-mail offerings that differ

primarily by storage capacity, with

the bigger capacities costing more. It

also decentralized the e-mail decision

making, shifting to each of Accentures

13 major geographic regions making

the decisions on which e-mail

offerings were needed for their region.

As a result, the average mailbox size

dropped in half to 140 megabytes and

the annual e-mail cost per user fell

76 percent. By offering more choices,

the CIO Organization better met its

customers needs while lowering costs.

Similarly, internal customers nowchoose among various information

technology support options. They

range from using online tutorials

and other e-support that they access

themselves, contacting the global help

desk or relying on in-person support

in the local offices. Customers can


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weigh the seriousness of the issue,

such as resetting a password or

recovering from a hard-drive crash,

then select among these options

each time they need IT support.

To track how IT costs are generated,

the CIO Organization developed

Microsoft-based tools with important

new reporting capabilities. Specifically,

it began producing reports by:

IT product and service

Customer

IT organization structure, which

shows expenses incurred by different

areas within the CIO Organization Natural expense, which focuses on

costs associated with such areas as

payroll and depreciation and feeds

into Accentures corporate financial

reporting process

The new reporting capabilities

allow the CIO Organization to

better align and manage IT spend

with business priorities while at

the same time driving efficiency

and productivity gains.

Beyond these measures, the CIO

Organization established key metrics

aligned with three overarching IT

strategic goals to assess its overall

performance in adding business value:

1. IT contribution to the business,

as measured by business

sponsor satisfaction, customer

satisfaction, market image and

quantifiable business benefits

2. IT operational excellence,evaluated by such measures as IT

cost as a percent of total revenue,

IT workforce as a percent of total

employees, and IT expense per person

3. Best-in-class workplace, assessed

by tracking such metrics as employee

engagement, employee attrition,

attrition of top performers and

percent of training budget spent

To guide day-to-day activities and give

the technology executive team timelyinformation for decision-making, the

CIO Organization built a strategic IT

performance scorecard that reports

on these key measures quarterly.

With these changes in place,

Accenture moved into the stepped-

up execution phase. Kress and his

team defined new job roles for IT

product managers and began active

cost and performance management.

The team set and began managing

to specific product service levels.

It established product-specific

pricing based on actual cost and

benchmarked to industry. In addition,

the CIO Organization streamlined and

centralized its IT procurement process

while adding greater accountability.


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It also began charging its internal

customers for IT services when

it made business sense and will

motivate appropriate behavior

change. E-mail and tech support ischarged to employees geographic

units to motivate the geographies

to select services to meet the

business needs and control demand

for unlimited services. Alternatively,

Accentures wide area network is

used globally so it is provided across

the company as part of Accentures

overall corporate IT costs.

Accenture is now in the strategic

stage of IT management, with asharpened focus on IT effectiveness.

Building on the previous changes, 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.

Our IT strategy continues to evolve

as the business changes and as we

have matured as an IT organization,

notes Kress. We keep finding ways

to add more value to the business.

One of the latest is the recently

launched Accenture People application,

an internal social networking site.

Employees post information about

their work skills and projects, as well

as hobbies and interests. The new

site helps Accenture employees find

resources and experts quickly, as they

prepare new business proposals or

seek help on tough business problems.

One team located an enterprise search

expert in 10 minutes using Accenture

People. At the same time, the team

also tried the only way Accenture

had to track down such people before

launching its social networking

siteusing e-mail to network for

possible experts. This approach took

two days to produce a nameand

it was the same person the team

found through Accenture People.

Another initiative focuses onenhancing collaboration capabilities

so Accenture teams around the

world can work together more

easily. The CIO Organization has

installed high-definition video

conferencing, telepresence, in

multiple offices, with more cities

to be added. One team working

with a large beverage company has

already replaced its monthly client

telephone call with telepresence.

By running IT like a business, we havebecome much more strategic in our decision-making, more efficient and more responsiveto our customers needs, says Kress. Best

of all, because we can accurately monitor

and measure the business value we deliver,we are able to improve our operations tosupport Accentures efforts to sustain its highperformance. At the same time, this enablesus to help our clients to become

high-performance businesses.


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Hardware and network 110,300 workstations deployed

5,464 devices monitored

5,366 servers managed

8,091 megabytes network bandwidth managed

Websites 43,000 unique visitors to Accenture Portal per day

26,200 unique visitors to accenture.com per day

50,000 unique search queries per day

Applications 356 global applications

195 local applications supported

Single instance global SAP ERP

Collaboration 131,000 e-mail accounts

5.9 million e-mail messages per day

4.6 million spam messages blocked

1.3 million clean messages

725 Telepresence hours per month

12,500 SharePoint sites

22,000 mobile devices (Blackberry/Windows)

29.8 million audio conferencing minutes per month

Support 1,098,600 resolved incidents per year through help desk, eSupport, web chat, local support

621,400 eSupport logins

High PerformanceDeliveredBy any measure, Accentures

CIO Organization has achieved a

dramatically improved performance

since it began running IT like a

business. For one, it has made

remarkable improvements in

IT operations, including:

Reducing IT spending by 24 percent

between fiscal 2001 and fiscal 2007

Lowering IT expense per person by

60 percent during the same period,

even as the workforce has grown by

100,000 employees

Halving IT spending as a percent of

net revenues since fiscal 2001

In a comparison of the worlds 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 percent of total employees and

lowest IT expense per employee.

In addition to these valuable gains

in productivity and efficiency, ITcontribution 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

percentstrongly above the projected

value from the original business

cases. Not surprisingly, business

sponsor satisfaction has significantly

increased as well, to 81 percent

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 2007,from 71 percent in fiscal 2000.

Accenture has also made important

strides in building a best-in-class IT

operation. Despite bearing the brunt

of such major change, IT employee

attrition has dropped to 8 percent in

fiscal 2007 from 14 percent in fiscal

2004. Attrition of top performers

has fallen even further, to 3 percent

from 7 percent in fiscal 2004.

Putting in place this innovative IT operating strategy has given the CIO Organization

the essential platform for meeting Accentures complex and expanding technology

requirements. Its scope includes:


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About Accenture

Accenture is a global managementconsulting, technology services and

outsourcing company. Combiningunparalleled experience, comprehensive

capabilities across all industries andbusiness functions, and extensive research

on the world's most successful companies,Accenture collaborates with clients tohelp them become high-performance

businesses and governments. With morethan 186,000 people in 49 countries,

the company generated net revenues ofUS$23.39 billion for the fiscal year endedAug. 31, 2008. Its home page is

www.accenture.com.

Copyright 2008 AccentureAll rights reserved.

Accenture, its logo, and

High Performance Deliveredare trademarks of Accenture.

ACC08-0415

Running It as Business

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