Global solution provider Accenture last week unveiled a US$3 billion, three-year commitment to quickly build on its already formidable cloud capabilities to help its customers more quickly move not just applications, but their entire businesses, to the cloud. This is being coordinated via a new Accenture Cloud First initiative, which is starting on Oct. 1 and is slated to bring together 70,000 of the company’s personnel from across a wide swath of its services capabilities into a single cloud focus.
CRN recently spoke with Annette Rippert, Accenture’s group chief executive for strategy and consulting, about the Accenture Cloud First initiative and its plan to spend US$1 billion in each of the next three years to advance its ability to digitally transform customers’ business.
Rippert, who leads the part of Accenture’s business that includes its corporate strategy practice, industry consulting, functional consulting, data analytics and artificial intelligence, and its Industry X.0 digital transformation initiatives, told CRN that while her company has been bringing its global customers to the cloud for years, the new Cloud First initiative is aimed at accelerating that move by uniting so many different parts of its services businesses to better concentrate on the cloud.
Here’s a deep look into the Accenture Cloud First initiative and what it means for Accenture and its customers.
Why did Accenture put together a new initiative called Cloud First? Accenture has been working in the cloud with its customers for a long time, right?
The cloud has been moving fast, and we‘ve been on top of that. We have a business group with every one of the major scaled cloud providers. Our business has been one of the No. 1 integrators across those platforms. So we’ve been in cloud for a long time and are a leader in digital. We’ve been building that market for a very long time.
One of the things that we‘ve seen is that we’re at this big inflection point: Clients have been moving components of their business applications to the cloud. They’ve been moving their data to the cloud. But we’re at a point now [that is] particularly accelerated coming out of the COVID-19 crisis with a momentum this markedly different. And that momentum shift is causing our clients to think about the future of their business strategy and how they’re leveraging cloud in a very differentiated way.
We‘re moving from a position of incremental work to one that is a decision now that’s often in the C-suite of our clients thinking about the core of their business strategy. In the context of the size of the contracts that are being signed for cloud capabilities now, these are big corporate bets of strategy. And we believe that that requires a firm understanding from shareholder value on down, from a corporate strategy standpoint of an understanding of what the cloud can do and how it can help change the nature of clients’ competitive positioning, the nature of the products and services that they offer, and even the changing dimensions of the industry they play in because of capabilities that they can enact. [Accenture Cloud First is] thinking about cloud from the corporate strategy standpoint, creating shareholder value, understanding the economic models that allow us to create new value and invest that back in the business.
So those things can‘t be possible unless you have a firm understanding of how the industry operates, an understanding of value creation within the client’s business. So our industry consulting, our deep relationship together with our clients, our most senior clients around their business functions, is essential to being successful in this space as well.
Isn't that something that Accenture has been doing with clients now for years?
We have. And when we think about the way that the pace of change is coming right now, what we felt was essential was centralising this group across our business because it requires skills from all different segments of our business. ... Now we‘re accelerating that by bringing a cadre of these skills, 70,000 of our people, together in one single cross-functional group that will allow us to be successful and move much more quickly with assembled industry solutions, with assembled solutions around applications and data and, most essential, around human performance.
So when you think about what‘s necessary to innovate at the pace that we’re talking about, the tipping point is that point when 20 percent of workloads have moved into the cloud. And now we see that accelerating through these big deals where significantly more will move into the cloud. And it changes the way that a company is organised around this: new operating models, new ways of developing skills at scale, new ways of measuring and metricing the overall production of agile teams that are working together to be able to move at a pace to create this continuous innovation environment.
What‘s really different is the fact that we’re bringing together all of those disciplines into one group that allows us to be able to move at a much more accelerated pace with assembled solutions that will allow us to address the scale and the pace of what our clients are trying to accomplish.
What kind of new skills will Accenture need to bring its Cloud First initiative together?
We have been investing year over year in the number of certifications that we have on each one of the key [cloud] providers. So we have our Microsoft Business Group, our Avanade business. We have our Accenture Google Business Group, our AWS Business Group, and recently our Ali Baba group that have been formed as well. And each one of those has made major investments in skilling our people. But when you think about the breadth of what‘s happening now, those certifications extend themselves now into data, into [artificial intelligence] and [machine learning] and advanced services around IoT. And so all of that is areas that we’re investing in and building our people quickly and at scale. And those take major investments. You saw that there’s a US$3 billion investment included in this announcement. We are focused on acquisitions that help us significantly increase the scope of our practices for areas around our applied intelligence practice, which is around data, for areas around IoT, and [around] what we would call Industry X.0 [digital transformation], for areas around our human performance and human potential. So those are all key areas that we also look to accelerate with inorganic growth.
Is Accenture currently discussing possible acquisitions to accelerate those skills?
There are many already on the table. As you know, we‘ve been investing in being a leader in cloud for some time, but we’re accelerating the manner in which we’re dedicating our investment capital in order to capture this market.
In addition to acquisitions, what are some other areas that Accenture is looking at in terms of where that US$3-billion investment will be going?
We‘re investing in industry solutions. You would expect that as we innovate at this intersection of business and industry, that is an area that we’ve spent a great deal of time on. And that is something you may be familiar with with some of our announcements in this space. We have a product, for example, in the life sciences space called Intient that we’ve talked about quite a bit in the market. And our industry platforms are essential to the way that we believe cloud must be differentiated because to move from that 20 percent to 80 percent requires specificity around industry solutions. And that’s really where we think we can be a unique driver of growth in this.
Now that the Accenture Cloud First initiative, its US$3 billion investment, and the appointment of Karthik Narain (pictured) to lead it have been announced, what comes next starting Oct.1 when the initiative starts?
Certainly there are a number of larger deals in the pipeline, both from an acquisition standpoint and from working together with our clients. So I would expect that those would be the two most important areas that you will see movement from us within the market.
Given that the cloud is an US$11 billion annual business for Accenture, what does that really encompass for the company?
We earlier talked about the fact that every business will be and is a digital business. We put that notion on the table some time ago. And at that point, we decided to create our Accenture digital business. And one of the key things we did across the enterprise is, we measured our rotation to the new, our rotation to digital. ... As we look to focus on the growth of cloud, here too we will focus on metrics that drive the business, that drive our interactions with our clients, that are measuring the penetration of cloud in our business. And so, if you think about that USUS$11 billion, for us it includes the work that we do across the firm that includes our Software-as-a-Service business, it includes work that we do across something we call our Intelligent Platform business, cloud-native development, etc. And I think that when you look at what we want to [measure] for the business going forward with this initiative, what you‘ll see is that same type of internal metrics, reporting of metrics, on cloud penetration.