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Accenture clocks up $2 billion in generative AI sales so far this year - with more to come, according to CEO Julie Sweet

Stuart Lauchlan Profile picture for user slauchlan June 21, 2024
Summary:
The services giant is reaping rewards from the gen AI revolution, but it's still early days.

Accenture CEO
Julie Sweet

Just how quickly is generative AI turning into bottom line earnings for vendors? For Accenture, the answer is pretty fast, according to CEO Julie Sweet, who noted yesterday:

With over $900 million in new gen AI bookings this quarter, we now have $2 billion in gen AI sales year-to-date, and we have also achieved $500 million in revenue year-to-date. This compares to approximately $300 million in sales and roughly $100 million in revenue from gen AI in FY 2023.

Two important caveats here - that’s impressive growth, but gen AI revenues are still a drop in the ocean when placed against Accenture’s quarterly total of $16.47 billion. The other point to note in terms of shaping future growth expectations is that those numbers are coming from “smaller projects as our clients primarily are in experimentation mode”.

There are other factors in play, added Sweet:

It is important to remember that while there is a near universal recognition now of the importance of AI, which is at the heart of re-invention, the ability to use gen AI at scale varies widely with clients on a continuum. With those which have strong digital cores genuinely seeking to move more quickly, while most clients are coming to the realization of the investments needed to truly implement AI across the enterprise, starting with a strong digital core from migrating applications and data to the cloud, building a new cognitive layer, implementing modern ERP and applications across the enterprise to a strong security layer.

And nearly all clients are finding it difficult to scale gen AI projects because the AI technology is a small part of what is needed. To re-invent using technology, data, and AI, you must also change your processes and ways of working, rescale and upscale your people, and build new capabilities around responsible AI, all with a deep understanding of industry, function, and technology to unlock the value. And many clients need to first find more efficiencies to enable scaled investment in their digital cores and all these capabilities, particularly in data foundations.

That means new business for the like of Accenture, she argued:

In short, gen AI is acting as a catalyst for companies to more aggressively go after cost, build the digital core, and truly change the ways they work, which creates significant opportunity for us. And this is why clients are coming to us. We are able to help our clients with this AI rotation because of our broad services across strategy and consulting technology and operations.

As the current smaller experimentation programs scale up, there will be be revenue acceleration, predicted Sweet:

We are very uniquely positioned in this market to be able to do these large-scale transformations because they require the combination of services, everything from the ability to help them move faster through our managed services, our industry expertise. Everyone wants to do that with the eye towards gen AI, so even though the transformations are often in preparation for gen AI, they want to work with the partner who really understands gen AI.

Exemplars

Sweet cited some examples of client work already underway around gen AI:

We are helping a leading global food and beverage company who already built a strong digital core as part of its re-invention journey to now leverage the power of generative AI to create new value. Together, we developed a digital shelf console pilot, a gen AI engine that accelerates content creation for e-commerce and optimizes it to drive sales. The engine empowers marketers to audit and customize content at scale, expected to reduce time to deliver one year's worth of content to just eight working days and save costs of up to 80% quickly and effectively. Once they scale, this enables the company to produce more targeted content with significant time and cost efficiency, increase sales, and transform customer experiences.

Another keynote project is underway with National Australia Bank. Sweet explained:

We have partnered…to strategically implement and scale generative AI to create material value at speed, enhance relationship-driven customer service, and drive operational efficiencies. We worked on a methodical build of a secure and robust gen AI platform built within the bank's existing strategic data platform with the creation of 200 generative AI use cases in backlog. To date, over 20 use cases have been tested across the bank with eight of these enterprise-grade pilots underway and a number of those scaling and already delivering value.

We also co-created a methodology for delivering GenAI projects from experiments to scalable deployment, ensuring each stage delivers tangible business benefits. While doing so, National Australia Bank and Accenture are putting safety at the core of the approach through responsible AI and risk policies alongside developing in-house AI expertise and literacy.

Customer Experience transformation is also a ripe area for clients to tap into generative AI capabilities with Sweet citing a new digital platform at Saudi Airlines as a case in point:

Powered by GenAI, the platform will provide a one-stop solution enabling customers to seamlessly plan their journeys, book flights, and modify their trips in just a few words, all while providing a personalized and conversational experience. The platform is continuously evolving and will integrate more services over time. This modernization will support Saudia Airlines' vision of redefining the standards of travel in a digital world.

Accenture itself is readying for more gen AI demand. Sweet said:

As a learning organization and talent creator, we continue to invest in our people with approximately 13 million training hours this quarter. This averages 19 hours per person, representing an increase predominantly due to gen AI as we continue to prepare our workforce for the infusion of gen AI across our business in the coming years. We also continue to steadily increase our data and AI workforce, reaching approximately 55,000 skilled data and AI practitioners against our goal of doubling our data and AI workforce from 40,000 to 80,000 by the end of FY 2026.

My take

You're now doing a transformation. It may not be gen AI, but you have to understand gen AI.

All roads lead to generative AI…and to new business for Accenture. 

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