Accenture’s 12 actions toward cost-efficient IT

Accenture’s IT journey to valueAccenture’s world-class internal IT has been achieved through years of hard work and transformational change. The journey began back in 2000, when Accenture’s internal IT organization began reducing costs and increasing investments in innovative technologies. The initial stage involved aligning Accenture’s IT operating model with Accenture’s go-to-market strategy and instituting a strong IT governance model. From there the focus was on investing aggressively to build Accenture’s IT infrastructure and rationalize its systems and applications.

Accenture expanded rapidly, entering new markets and enhancing its global delivery capabilities. New joint ventures and affiliate companies needed support from common systems. Accenture’s business model had evolved to include business consulting, technology services and outsourcing, each of which had varying IT requirements. Mobility was becoming increasingly important as employees worked flexibly from office, home or client premises. With so many employees always on the

move, Accenture needed the latest technology solutions and a robust messaging and collaboration platform. Accenture also wanted to achieve greater efficiency by driving down infrastructure costs, managing service levels more productively and improving internal employee satisfaction with IT services.

More than 10 years later, IT produced impressive results: increased efficiencies, stunning cost reductions and a 300+ percent return on Accenture’s transformational IT initiative. The journey since then to present day has made Accenture’s IT organization leaner, stronger and cost-efficient. Despite Accenture’s workforce growth to approximately 400,000 users, IT spend per person has fallen by 77 percent since 2001—a number dramatically below industry figures. The IT foundation laid is today enabling Accenture to add more investment into aggressively

transforming operations to automate and drive further efficiency as Accenture evolves into a digital enterprise.

Looking back, the transformation is a journey that other organizations can learn from. A closer look at the initiatives undertaken and decisions made along Accenture’s IT transformation journey suggest that the path to a cost-efficient IT organization includes at least these 12 actions.

1 Set strategy and governance Having a strong foundation in place is an absolute prerequisite for any IT transformation. “It begins by putting your IT function in order,” explains Merim Becirovic, Managing Director of Accenture Internal IT Governance and Enablement. “For Accenture, that meant having clearly defined strategy, governance processes, management systems, performance measurement, investment prioritization and customer feedback surveys.” Starting with strategy, Accenture’s IT leaders defined an IT strategy that included seven key elements:

• Create a strong, central ITgovernance

• AlignAccenture’sITstrategywiththecompany’s business strategy

• RunITlikeabusinessbasedonamanaged-services approach

• Consolidate,standardizeandcentralize operations

• Focustheworkforcestrategyonvariable resources and low-costlocations

A cornerstone of Accenture’s success is its technology leadership. Not only does the company leverage information technology (IT) to help its clients maximize their performance, Accenture provides leading approaches in how organizations plan for, buy and manage IT resources. By focusing on continuous improvement and business value through 12 actions, Accenture’s internal IT organization has fundamentally improved the company’s IT efficiency and effectiveness while significantly lowering IT costs. In so doing, Accenture laid the foundation for a digital future.

Accenture USERS400,000

77%IT spend per person has fallen since 2001

Accenture's 12 actions toward cost-efficient IT | 1

•ImplementstrongITperformancemeasurement processes

•Communicatesuccessesandbenefits realization at every opportunity

IT established a governance model that closely involves Accenture’s senior business leaders in planning and aligning IT initiatives with company priorities. Overall IT planning, strategy, management and governance reside within the IT organization, and all key decisions are confirmed by an IT Steering Committee,composedofoperationalleaders of Accenture’s businesses. This means that Accenture’s business leaders are closely involved in all key decisions, ensuring that IT is always aligned with business strategy. “Participation has been critical in reaching consensus for investments in differentiating technology as well as for areas to scale back,” notes Becirovic.

2 Run IT like a business Accenture moved away from a traditional IT management approach and created a new model based on being a true service organization that operates like a business within the business. To run IT like a business, IT defined a managed-services model—providing a standard, but flexible, menu of IT products and services to the business at market-competitive cost. Users are charged for products and services consumed. They are treated as “customers” who have the ability to “serve themselves” through direct access to an online IT products and services catalog, boosting productivity and increasing user satisfaction.

To track how IT costs are generated, the IT organization developed tools with important new reporting capabilities. Specifically, IT began producing reports according to four categories. The first is reporting by

IT product and service. The second is by customer. The third is by IT organization structure, which shows expenses incurred by different areas within the IT organization. And the fourth is reporting of natural expense, which focuses on costs associated with areas such as payroll and depreciation and feeds into Accenture’s corporate financial reporting process. The new reporting capabilities allow IT to better align and manage IT spend with business priorities while at the same time driving efficiency and productivity gains.

To guide day-to-day activities and give the technology executive team timely information for decision making, the IT organization built a quarterly IT performance scorecard that has since evolved into a comprehensive visual, digital management dashboard that provides a single source of metrics in near real time.

3 Centralize, standardize, consolidate The IT organization consolidated, centralized and standardized IT operations, simplifying the IT environment and reducing maintenance and support costs by moving Accenture’s vast infrastructure to a single platform, something that had not been done to date by such a large company. Accenture began to apply and continues to insist on a “theme of one” in every area of IT operations, from applications to data centers. Less is more, and one is preferred. The entire Accenture enterprise operates on a single global Microsoft platform—laptop through cloud—simplifying everything from IT skill sets required to ongoing maintenance and support. “Many companies believe that best-of-breed solutions are required in each major area,” says Becirovic. “We respectfully disagree. Selecting best-of-breed in each area immediately adds to your complexity and cuts into your flexibility.” Accenture uses a single

IT businessspend with business strategy

Align

1,200 virtual machines on

84% savings in capital costs

80 physical servers =

Accenture's 12 actions toward cost-efficient IT | 2

global desktop image, simplifying networks, cloud and hosting, and enabling remote global support.

4 Source smarter Internal outsourcing was a key element of the transformation, allowing the internal IT organization to extend its capabilities, standardize delivery and drive rapid, cost-effective implementation. Accenture sourced business application, development and maintenance to the Accenture Global Delivery Network, a network of offshore, near-shore and onshore resources. In addition, Accenture outsourced the delivery of infrastructure services and messaging and collaboration products to Infrastructure Services for Accenture.

5 Rationalize applications In 2001, IT managed more than 600 global applications, and more than 1,500 local applications were in use. The process of rationalizing applications involved eliminating redundant applications, dropping applications that were near the end of their useful life, and wherever possible, driving applications to standardized architectures and platforms. By 2015, Accenture had reduced its number of global applications to 335 and 311localapplications.Reducingthenumber of applications simplifies the environment, enabling lower costs and greater speed to deliver new capabilities. A hidden benefit of application rationalization is that the enterprise in many situations

gains a “single source” of the truth, as opposed to multiple applications with different data. The result is better decision making all around.

6 Manage by portfolio Heavy weighting toward back-office initiatives made it difficult to make the appropriate investments to support Accenture’s growing business, particularly in such areas as improving the productivity of client service delivery personnel. The solution was to take a portfolio management approach to help transition from back office to front office in order to adopt a business and user focus. Taking this approach, IT investments were divided into five portfolios: Accenture-wide capabilities that benefit all personnel, individual business units, corporate functions, IT function, and legal and regulatory mandates. This approach guides Accenture’s IT investment strategically by identifying capabilities that add the most value to the business. Instead of thinking about individual technological investments, IT looks at broader pieces of Accenture’s business, striving to understand what Accenture is spending across the

board, and redirecting investments toward those solutions that deliver the greatest value.

7 Consolidate and virtualize data centers In 2001, Accenture data centers were spread across as many as 40 locations worldwide, with more than 200,000 square feet of space. By 2012, five data centers with half that space were saving Accenture 60 percent of 2001 costs. In addition, the consolidation initiative standardized the underlying infrastructure and processes. Then, as server virtualization technology began to evolve, Accenture recognized the potential and became an early adopter of the technology. A full-scale virtualization project was created with the goal of aggressively implementing the technology from development through production.

Networktransformation at least connectivity savings

30%

25%e-mail platform moved to the cloud

annual savings and 1-year ROI

m

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By January 2016, 88 percent of Accenture servers were virtualized. Some 1,200 virtual machines on 80 physical servers resulted in an 84 percent savings in capital costs. During this time, IT initiated a cloud program to begin building the foundation for cloud usage and data center virtualization. When this architecture was proven, in 2015, IT initiated a three-year program to move the majority of its applications to the cloud in order to deliver a more scalable, robust enterprise IT infrastructure. This capability will enable Accenture to implement digital services and capabilities, maximizing business value and taking advantage of cloud capabilities and scale efficiencies. As of May 2016, Accenture’s cloud adoption was 57 percent, including workloads across two public cloud providers and a wide range of Software-as-a-Service (SaaS) vendors.

8 Transform the network Accenture recognizes its global communications network as business critical. Over the past decade the network has seen two major transformations. In 2006, Accenture completely rebuilt its global network to support voice and video services, laying the foundations required for a spectrum of collaboration technologies and tools including one of the world’s largest Telepresence videoconferencing networks. By merging the voice and data networks, overall telecommunication costs were reduced by 20 percent. More recently in 2015, Accenture embarked on an even more significant network transformation to build a private, carrier-grade, global core network leveraging carrier-neutral facilities. This transformation has enabled Accenture to be optimized for cloud services, take a giant leap in scale and resilience, and drive a minimum of 30 percent savings for office connectivity by increasing choice and adopting

new technologies. Looking ahead, Accenture believes that continuous investment in the network is one of the key requirements to be a truly digital company and support the capacity that it will generate.

9 Migrate to cloud services for e-mail and collaboration In 2011, an internal IT team undertook the large-scale migration of 250,000 Accenture mailboxes and nearly 11,300 shared-services sites to the cloud. The migration of shared sites alone involved more than 40 terabytes of content, which had to be synchronized while in motion. The team needed to address technical complexities, created at-scale migration tools and processes, as well as handle integration challenges between cloud and on-premise environments. By 2012, Accenture’s e-mail platform had been successfully moved to the cloud. The initiative

earned back its investment in just one year and is generating annual savings of 25 percent. The success of this initiative led Accenture to aggressively migrate more. Accenture's cloud footprint increased from nine percent to 57 percent of all business applications by May 2016.

10 Transform processes Since the IT transformation initiative touched so many parts of Accenture operations, it created numerous opportunities to transform and simplify business processes. Transformation ranged from simple changes such as rebuilding a global print capability so that any Accenture professional can print a document on any Accenture printer in the world in five or fewer clicks, to something as expansive as transformation of the entire technology support function to create self-support

9% to 57%

Cloud footprint increased from

of all business applications

40%

Tech Support incidents resolved via self-service

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capabilities. Today approximately 40 percent of all incidents are resolved by users via self-service, about half of which are password resets. IT drove standardization of common tools and processes, including a new myRequestssite,anonline,one-stoptool for employee self-service needs.

11 Consolidate suppliers and contracts This action is based on simple business sense: seek wherever possible to consolidate contracts with multiple suppliers down to one. Instead of automatically renewing licenses, Accenture now subjects every commitment to critique, saving an average of 15 percent annually. IT made a major advance in this area by establishing an Ecosystem Products and Services (EP&S) organization to manage the 360-degree relationships with strategic suppliers, key alliance partners and numerous clients and to manage thousands of third-party IT suppliers Accenture does business with, providers who are necessary to sell and deliver Accenture’s services. EP&S is a highly specialized capability leveraging connections for Accenture itself, its ecosystem and Accenture clients. This organization is enabling Accenture to evolve to a global services integrator as the way the market wants to consume IT products and services shifts dramatically, including increasingly orchestrating everything as a service for Accenture and its clients.

12 Benefits realization Accenture has evolved to a robust benefits realization process. In developing the initial business case, a business sponsor establishes a baseline for business benefits, and then reviews the proposal with the IT SteeringCommittee.ProjectedbenefitshelptheITSteeringCommitteemakean informed decision as to whether to fund an initiative. The benefits realization process closes the loop and determines whether IT achieved the intended benefit. Tangible metrics are used to tell a bigger story of how Accenture internal IT continues to be successful in achieving a return on its investment. The metrics also show senior leadership outside internal IT the value the organization brings to Accenture.

15% Assessment of every license renewal =

savings annually

Because IT realizes benefits for three fiscal years, this time frame gives the organization the opportunity to either re-align the business case to get back on track or adjust its planned benefits for more accuracy in future years.

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The journey continues For many companies, the IT function is a necessary but expensive cost center. Accenture’s internal IT organization has demonstrated that an IT function can simultaneously cut costs and drive high performance. “Our IT strategy continues to evolve as the business changes and as we have matured as an IT organization,” comments Becirovic. “Yet we keep finding ways to add more value to the business.”

By sharpening the IT organization’s focus on effectiveness, IT has become much more strategic in its decision making, more efficient and more responsive to its customers’ needs. In addition, because the IT organization can accurately monitor and measure the business value it delivers, it is able to support Accenture’s efforts to become a more digital business.

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