Charif Zahrane University Of San Francisco MSIS 625

Case Analysis

Strategic IT Transformation at Accenture

Presented to Dr. Helmut Buehler April 3th, 2013

Executive Summary Arthur Andersen accounting firm was founded in 1913 to help other businesses adapt to new FRS tax regulations. The firm quickly expanded globally and started offering financial consulting in addition to accounting audit. In late 80s Arthur Andersen was divided into two entities, Andersen and Andersen Consulting. High demand over the consulting branch of the company have brought attentions to separate from the mother firm and in 2001 an agreement have been reached to allow Andersen Consulting to become an independent company and Accenture journey begins. Accenture had the right to use Andersen IT systems for one year so a decision needed to be made within the organization to find a good exit strategy from Andersen IT. Problem (Issue) Statement Andersen was branched globally and had offices in all four corners of the world . Each office or branch had its own IT infrastructure and platform that did not interface with other branches . Remote access to databases was near impossible . Accenture inherited this mess of IT and the short period of time it was given the right to use Anderson's IT platform was a good opportunity to start thinking about building a new, state of the art IT infrastructure. The first major problem Accenture faced was attitude toward IT inheritance . Andersen used to view its IT as a cost center where a budget had to be assigned to it every year . Given the fact that there are branches all over the world and every branch had its own platform, it was hard to budget for IT and many IT project were prioritized by their sponsors, the louder / higher in rank the sponsor is, the more chance the project would have to get

approved. Challenges were not only present in Pre-Accenture but also postAccenture. Accenture came to life in 2001, right at the cot-com bubble and only few months prior to 9/11. C-officers would pressure everyone to cut costs and of course IT had its share too. Proposal Having experienced Andersen IT challenges first hand, Accenture had a better idea on how to architect its IT infrastructure. First, they wanted to change IT perspective and take it from a cost center to a business within a business. Instead of budgeting IT expenditures every year Accenture IT management would change the way they do business and charge every office a certain amount for every service call they make. As far as the IT platform, Accenture was debating between two types of platforms : best-of-breed or one-platform. Each approach had its strengths and drawbacks. Best of breed would make it possible to chose the best of the best where it comes to applications. It would allow them to have a variety of applications that would best fit their needs. The issue with that is having to deal with a large amount of vendors and the cost associated with that . A one-platform approach would allow Accenture to chose one global vendor to meet its applications needs. This approach would make it feasible for all business units and global offices to communicate more efficiently since a single-vendor applications are more likely able to interface with each other. The other advantage is cost, Accenture would be able to negotiate deeper discounts in implementation, licensing and support fees. At the end Accenture decided to go with the one-platform approach and chose Microsoft and SAP as partners because of their global presence and their ability to interface with

each other. As far as hardware Accenture partnered with HP for their end-user units and servers and with Cisco for their networking equipment. Amid this restructuring, Accenture was still considering outsourcing alternatives. To make a decision on what to outsource easier for Accenture, it divided its activities into three different categories : processes that provided a differentiating competitive role, processes involving highly confidential information, and repetitive and common processes. It was then easier to decide to outsource all of its common and repetitive processes as data-center management, storage and few other practices. Where it comes to enterprise applications, Accenture decided to use SAP's business technology as a single-instance approach which have resulted in reduced technology costs and better integration across global financial environment. Data Analysis Accenture started out with $11 Billion in annual revenue , 75000 employees and more than fifty offices around the globe. Before implementing the new IT platform IT was considered a cost unit and needed to be budgeted for every year. During harsh economic times IT execs were asked to reduce their IT expenditures throughout the year by millions of dollars. Their proposed new IT infrastructure not only needed to meet their high end customers expectations but also reduce IT costs inherited from Andersen. Their approach to take IT from a Cost unit to a business within a business unit would allow to generate revenue . For instance they implemented call centers as a 24/7 help desk source where they would charge $20

per help desk call or $100 for personalized service. They would also charge for email accounts that could vary between 50 MB and 500 MB based on users needs. Recommendations (or Accenture Now) Since Accenture birth day , CIO Frank Modruson was very aggressive about IT decision making. He had transformed Accenture IT dramatically and still does today. Since the implementation of the new platform the firm went from 11.1 Billion in revenue to $15.5 Billion in revenue , but also cut 30% in IT spending. As a percent of revenue that was cut in half over that time. (Rosmarin). He kept introducing new technologies like integrating HR processes and tech processes so new employees get enables as soon as they get hired. new desktop image for every system in the world, Voice-Over-IP telephone technology and much more (Rosmarin).

Citations: Rosmarin, Rachel. "Accenture CIO Frank Modruson." Forbes. N.p., 02 06 2006. Web. 3 Apr 2013. .

Strategic IT Transformation at Accenture. Mark Jeffery. Kellogg School of Management. Product Number KEL471