'The New' is a big thing for Accenture - you're going to be hearing a lot about it.
We’ve noted for several years now that the firm has benefitted tremendously from its early and sustained investment in digital capabilities and offerings. That’s paid off handsomely, with digital services now accounting for 40% of revenues.
What CEO Pierre Nanterme is now pointing to is a desire/need for businesses to pursue 'The New'. It’s essentially digital transformation, but given an Accenture spin. He explains:
As you look at our business and indeed these last few years, all the industries in all the markets are under significant transformation. They want to transform their business and the different industries, what we call, rotate to The New in all the digital spaces. They want as well to improve their operational efficiency and they want to implement new capabilities.
This is driving the shift towards Accenture’s business model moving ever more towards consulting - currently a 14% year-on-year growth rate and making up 55% of overall revenues - rather than outsourcing. Nanterme states:
At the end of the day, if you look at the nature of the transformation of our industries, they are more related to consulting type of services. This is the nature of the demand because of the unique nature of the transformation in the industries.
If you look back a few years ago where outsourcing was going to be stronger, it was absolutely linked to the fact that you had less need for true industry transformation and innovative play. The industries were more looking for straightforward efficiency gains. ATo a great extent, the natural answer we provided at Accenture to straightforward efficiency gain through around the outsourcing arbitrage, more productivity, tackling the cost in operation and in IT.
So I feel this natural shift from a bit of outsourcing, a bit less of outsourcing, to a bit more of consulting, is reflecting the true nature of the transformation in the industries.
As such, the focus now is on operations such as Accenture Interactive and Accenture Strategy, he says:
Through Accenture Interactive, we are bringing our unique combination of design and customer experience capabilities to 70 companies in the Fortune Global 100. In cloud we are focused on building strong platforms for key industries such as our life science cloud for R&D. This truly innovative solution to collect, share and analyze clinical data is now being used by seven top pharma companies, including Pfizer, Merck, GSK and Lilly to accelerate drug development and improve patient outcome.
We continue to see strong demand from clients to help them with their most complex mission-critical issues. In Accenture Strategy, we have developed a unique approach to help clients make sustainable improvements in their enterprise-wide performance. We are now a leader in this space, with a totally new zero-based methodology which we have delivered with excellent results at many consumer goods companies, including Unilever and Mondelez. We are now taking this approach to clients in health care, retail and financial services.
Patently digital
Nanterme also reveals that Accenture is investing to protect its leadership status, with 5000 patents and patent-pending applications in areas such as artificial intelligence, cyber-security, drones, virtual agents and the Internet of Things. He says:
For us, IP is very important. We've been very active from an IP standpoint and especially as, again, we are in a phase of reinvention and in a phase of innovation. Reinvention, innovation, equals intellectual property building.
For us we are building intellectual property in many things. It’s more than products. Sometimes we feel that IP equals software or application product. IP could be behind processes, operating models, methodologies, approaches, part of solutions and this is all what we do.
So we're working on our IP from, again, from a process standpoint, a metallurgy standpoint, from part of solutions standpoint, and of course, in the context of working with our partners.
Such IP might relate to offerings built on top of software partners, he adds:
This is where at Accenture we make the bridge with the software providers. The software providers are all our friends and we're working with the best possible companies. They are coming to Accenture, that's why we are a good partner to bring industry expertise. And this is on the industry wrapper we could build IP.
In our business, we are working with software companies. The job of Accenture for many years has been to bring an industry expertise, an industry wrapper on top of these solutions. And on this wrapper we are bringing, we're working on protecting our own IP when appropriate and when possible.
As for the next steps, Nanterme says there’s a clear corporate mission:
The formula going forward is very simple. We want to grow. That's our goal in life, to grow and to grow more than the market. In order to grow more than the market, we believe at Accenture and this is at the heart of our strategy, that it's going to be by leading in the digital-related services.
We want to make Accenture the leading professional services company in digital-related services. This is what we're working on these last few years and we will continue moving forward. We have evidence that this rotation to 'The New' is happening at big scale.
My take
I’m not too sure about this 'The New' messaging - sounds like an abstract Doctor Who enemy- but other than that, it’s hard to find fault with Accenture’s strategy and execution. It’s embraced a digital destiny with enthusiasm and an understanding of the need to change and adapt its business and operating models.
