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Case Study - Accenture

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Case Study – Accenture

MSIS 625

Dr. Buehler

5/4/2016

Case Study - Accenture

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Executive Summary

On January, 1st 2001 01/01/01, Accenture was born out of the ashes of Andersen

Consulting. “Accenture started its new life with an IPO of 12 percent of the company’s equity,

which Accenture raised $1.7 billion” (Jeffery, 2010). “The new Accenture was a large

organization with $11 billion in annual revenues, 75,000 employees, and more than fifty offices

around the world” (Jeffery, 2010).

Because Accenture had just parted ways from Arthur Andersen, Accenture didn’t have its

own IT infrastructure. Their first plan of action was to “create an effective IT infrastructure that

would allow data and information to flow freely across county lines. This infrastructure would

need to be able to allow for timely and accurate transmission of financial information while

meeting the stringent demands of the publicly traded environment” (Jeffery, 2010).

Problem Statement

During the separation Accenture was given access to Andersen’s infrastructure for one

year, which was a very short time to create their own infrastructure. Accenture understood

Andersen’s infrastructure, and knew the gaps. “(1) Andersen’s systems were composed of a

patchwork of legacy applications that did not interconnect readily with each other. (2) Due to

obsolete software platforms on which they ran, key systems and databases could not be accessed

remotely through the internet. Large, expensive private networks were require for this task, and

financial information often had to be manually compiled to aggregate results from different

offices. (3) Andersen’s offices around the world had adopted their own individual accounting

and human resources software systems, making it very complex to get an up-to-date snapshot of

the whole organization’s status at any one time. Accenture clearly needed to resolve these issues

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regarding its own internal practices before it could advise clients on emerging technology”

(Jeffery, 2010).

Data Analysis

The first thing that Accenture did was create an IT steering committee, which was made

up of employees from each division of the organization. Prior to the steering committee “each

division of the organization fought hard to get its own IT projects started and implemented in an

unstructured, often haphazard process. Under the new governance, the steering committee was

chaired by the CIO, and included the chief operating officer of every line of the business. A

formal process was established to present an IT project to the committee. All projects had to

have a senior business sponsor, typically a member of the committee, whose duty was to

convince other members of the business value in the proposal he or she championed” (Jeffery,

2010).

“If a sponsor’s project was approved, he or she took responsibility for extracting the

claimed value from the project, creating a clear ROI analysis, which was thoroughly debated

and, if needed, adjusted. Approved projects are subject to an annual audit for three years. The

audits sough to verify that the projected value effectively had been created to be in line with

Accenture’s IT strategy” (Jeffery, 2010).

Once the steering committee was created, Accenture took a look at what kind of IT

infrastructure would best suit their specific needs. They went for the one-platform approach

which has the advantage of “generating important economies of scale for the company” (Jeffery,

2010). Accenture could “efficiently operate with a lower IT support head count when dealing

with a single platform, reducing training costs for IT specialists, while establishing a global

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support center” (Jeffery, 2010). The most important business related point was that the one-

platform model allows for “applications from the same vendor will talk to each other, allowing

information to flow seamlessly and in real time, without the need to design custom interfaces or

acquire middleware” (Jeffery, 2010).

Accenture’s steering committee did choose a couple of different vendors, but each vendor

brought many applications that were interconnected, and are still big names today. “To run most

of its back-end IT operations, as well as provide basic communication and productivity

application, Accenture chose Microsoft. Accenture chose Microsoft because of the software

giant’s solid financial position, its global presence, and the high degree of integration it offered

in its applications. Microsoft provided Windows NT to run Accenture’s server and network

infrastructure, as well as its SQL databases for all data-related tasks. Accenture also adopted

Microsoft Outlook for its e-mail client, together with other tools from the Office suite products.”

(Jeffery, 2010).

Migrating to this one-platform gave Accenture such large benefits toward both its IT

Operations, and the Business as a whole. “Accenture was able to move from three distinct

directory systems to a unified one, from more than four hundred Novell file servers to fifty

Microsoft servers, and from 440 users per e-mail server to 2,500 users per each Exchange server.

Even now you can see how effective the one-platform strategy can be used. As said previously,

although they went to Microsoft as a vendor, they also went to SAP.

“Accenture chose SAP as its worldwide application provider for financial and human

resources solutions. Select a global provider and a “single-instance platform represented a radical

change for the organization. Under Andersen, it was not uncommon for every office to run its

own financial and HR suite of products” (Jeffery, 2010). This meant that offices around the

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world would not be able to transfer information from one to another. All the applications

immediately forced different offices to become silos, not letting information flow freely. “The

lack of integration also caused headaches for the company’s consulting arm, turning the

consolidation of financial statements, not to mention the global monitoring of cash flow and

other critical tasks, into a complex and time consuming endeavor. Furthermore, a lack of

uniformity in HR applications made decisions difficult when the offices tried to plan how to staff

globally for a pipeline of new projects” (Jeffery, 2010). Lastly, Accenture handpicked HP for its

computers and servers, while hiring Cisco for all network-related equipment.

Now that Accenture had all the IT infrastructure projects in the works, it was time to

work on the actual staff. “One of Accenture’s fundamental initiatives to reduce IT cost was

outsourcing. They went from a company that placed its internal IT staff mainly in the United

states and Europe to one that house 68 percent of its IT personnel in lower-cost regions as India,

Southeast Asia (China, Philippines), and Latin America. By 2010, only 14 percent of

Accenture’s IT staff worked directly for the company as permanent employees, whereas an 86

percent was “borrowed” via the Accenture Global Delivery Network (GDN) and the

Infrastructure Outsourcing (IO) Group” (Jeffery, 2010).

“The GDN comprised of more than 83,000 professionals at more than fifty call centers

worldwide. By applying a systematic approach to processes, methodologies, tools, and

architectures, professionals in the GDN delivered customized IT solutions under an offshore

business mode that “followed the sun” by enabling teams in different parts of the world to work

on a project and, at the end of the work day pass it along to the next team in the global chain.

Accenture had leveraged its GDN not only as a revenue generating service for clients, but also as

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a critical core skill that the organizations used to respond to its own IT needs in a cost-efficient

manner” (Jeffery, 2010).

Recommendations

I agree with the Journal Articles assessment of the organization. Accenture saw an

opportunity to become its own company, and took it. They knew that the current infrastructure,

and way that IT supported the business had to change. The C-level members of the organization

in my opinion, did the right thing by first setting up a steering committee that could not only

drive policy, but create a process that works to better the business as a whole. I believe that in

order for an organization to fully improve their situation, planning must be turned into policy,

then pushed out to the tactical individuals within an organization. Accenture saw its

shortcoming, knowing it only had a year on Andersen’s legacy infrastructure, took the necessary

steps, and created an organization that today is extremely profitable.

References

Jeffrey, Mark (2010) Strategic IT Infrastructure at Accenture. 2010. Kellogg School of

Management. KEL471.