Chapter 4: Creating Value across the Enterprise – Running IT Like a Business: A Step-by-Step Guide to Accenture's Internal IT

CHAPTER 4: CREATING VALUE ACROSS THE ENTERPRISE

We have explored several related dimensions of what it means to run IT like a business. Beginning with IT strategy and governance, we looked at the necessary foundations for a business-like approach to IT. A look into the managed-services mindset helped us to begin thinking about our internal customers and their needs. We saw that performance measurements supply a source of credible information and a vital measure of accountability.

All these activities are necessary in themselves, but something more is required in order for your IT function to complete its transformation from cost center into value center. We have reached that point in a transformational journey where our basic operations are effective, we are meeting the needs of our customers, and we are measuring our performance. We are now ready to go beyond meeting the specific requirements of internal clients, and begin searching for opportunities to add value to the wider enterprise.

This pursuit of higher-level value creation initiatives enables the IT function to become a true strategic partner for the enterprise by solving problems and creating solutions that extend well beyond the function’s menu of managed services.

In this chapter, we will explore the many avenues of value creation open to the IT function. We will also discuss how to communicate the value once you have created it. I believe that every corporate function, and particularly IT, needs to be absolutely clear in communicating the value they provide to their corporation, their organization, or their government department. If we are not clear about the value that IT delivers, how can we expect executive leadership to estimate our value accurately, or to continue to allocate the investments required to keep our IT business healthy? If other people in the enterprise are not clear, they will eventually wonder whether the function should even exist. So communicating the value created is, in a very practical sense, as important as the value itself.

Let’s begin by examining the surprising number of ways in which IT can create value for the enterprise. Even though not every option discussed here will be appropriate or relevant for every organization, what is important is for you to begin looking for and taking advantage of the opportunities available to your IT function in your organizational setting.

Doing more for less

Ask yourself and your IT colleagues this simple question: how can we do what we do better, faster and cheaper next year than we did last year?

Many IT executives might consider such a question suicidal. “Why try doing things cheaper? We should be asking for budget increases, not reductions.” Given the astonishing power of IT, such a question is not dangerous, but entirely doable, and not just this year, but year after year.

To note that many IT people do not share this mindset is not an indictment, but an honest recognition that people go into IT because they are technologists before they are business people. Technical capability is always going to be more important to a technologist than operating efficiency. But our experience at Accenture demonstrates that, when you focus on value creation, you actually can have both the best technology and the most efficient technology operation. In fact, excellent technology fuels efficient technology, and vice versa. By taking advantage of new technology developments, you accelerate the process of change, and so are able to provide things better, faster and cheaper than you ever considered possible.

The examples of this are so plentiful that we need cite only a few obvious cases. Consider how network bandwidth has changed over the past 10 years alone, turning videoconferencing from an executive-level luxury into a staff-level commonplace. Who imagined in the year 2000 that we would be running enterprise-wide applications on our cell phones? SharePoint® capabilities in many enterprises now allow a virtual team, collaborating across great distances and many time zones, to acquire a shared internal workspace, populate it, and start using it in minutes – all without intervention or support from IT. How about the explosion in sourcing and alternative delivery methods? Every year there is something so new and so innovative that you are forced to wonder where it will all end. But it never does end, as the cycle of innovation keeps renewing itself.

Technology professionals love the “next new thing”, but we also have to live with our stable-state predisposition, in which change is the great unspoken threat. Injecting change increases risk, and the last thing in the world we as IT professionals want to see is downtime or systemic problems initiated by our own changes. Nevertheless, change we must, because not wanting to change and failing to adapt will itself cause changes, even in the short term. The minute you stop changing, you are losing ground, if for no other reason than because competitors are making changes all the time.

So where should you look inside your function if you want to do things better, faster and cheaper? Here are eight separate areas you may want to explore:

Centralize, standardize, consolidate: Many IT professionals believe that they need best-of-breed solutions in each major area of operations. Our experience shows that, while the best-of-breed philosophy is at first attractive, it imposes complexity and reduces flexibility over time. This is why we strive for the Theme of One in every area of IT operations. Less is always more, and one is always preferred. Accenture’s entire enterprise operates on a single global platform, from desktop through data center. We may make minor sacrifices in capability and performance here and there, but we gain in many other ways, simplifying everything.

Smart sourcing: Are you taking advantage of all the available sources and your lowest-cost resources for your technology force? Despite our world-class in-house technology team, Accenture’s internal IT function actually outsources significant blocks of our operation . . . to other parts of Accenture! In a global team of approximately 4,000 IT professionals, slightly less than 500 are part of the formal CIO Organization; the rest come from various other parts of the company. Some 2,000 professionals are drawn from Accenture’s Global Delivery Network. Virtually all our infrastructure operations are outsourced to the Accenture Infrastructure Outsourcing Unit. At any given point in time, several hundred other professionals are seconded from Accenture’s consulting practice. With variable resources making up as much as 85% of our global IT team, we can ramp up or down as workloads fluctuate, without sacrificing 24/7 coverage.

Rationalize applications: Proliferation of applications afflicts every enterprise these days, so Accenture’s experience may be instructive. The process of rationalizing applications is no more glamorous than unstacking bricks: eliminate redundant applications, drop applications that are near the end of their useful lives and, wherever possible, drive applications to standardized architectures and platforms. Reducing the number of applications simplifies the environment, enabling lower costs and greater speed in delivering new capabilities. A hidden benefit of application rationalization is that the enterprise, in many situations, will regain a single source of the truth, as opposed to having multiple applications with different data. The result is better decision making all around.

Consolidate and virtualize data centers: Your data center operations could become a gold mine for better, faster and cheaper improvements. In 2001, Accenture data centers were spread across as many as 40 locations worldwide. Today, five data centers with half the space are saving the company 60% of 2001 costs. New server, database and storage software technologies are now turning the consolidation effort into a full-scale virtualization project. As thin provisioning and other techniques allow multiple applications and databases to use shared hardware, the days of having one server for each application are history. More than 80% of Accenture data centers are already virtualized, and this number continues to climb.

Transform your network: Driven by new technology capabilities and the opportunity to reduce costs, Accenture completely redid its global communications network. The change, including implementation of MPLS across the network enabled data and voice traffic to flow through the same channels, reducing costs by approximately 20%, or US$25 million annually. Equally significant, the revamped network enabled a spectrum of new collaboration technologies and tools, including one of the world’s largest high-definition videoconferencing networks.

Re-engineer processes: This type of re-engineering can be as basic as rebuilding a global print capability, so that any professional in your enterprise can print a document on any printer in the world with just a few clicks. It could be as expansive as re-engineering the entire technology support function to create self-support capabilities. When we made the switch to self-service IT support, we found that we could handle more than 65% of all incidents at a cost of less than 10% of a physical visit.

Consolidate suppliers and contracts: It is basic business sense to 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 US$50-60 million annually.

 

This list of ideas hardly exhausts the possibilities for value creation. Once you embrace the “less can be more” mindset, you will find yourself scrutinizing every corner of your IT function for overlooked inefficiencies and taken-for-granted redundancies.

Help others be more productive

IT is not the only departmental function that adds value to an enterprise. How effective would many organizations be without capable human resources, finance, or legal functions? IT frequently can leverage the power of technology to enable these other corporate departments to execute their work more effectively. Adding value by helping other functions become more productive is yet another way in which the IT operation can create value for the enterprise.

Here are just a few instances in which Accenture’s CIO Organization has helped colleagues in other areas of Accenture do their jobs better, faster and cheaper:

Recruiting: Accenture’s most valuable assets are clearly its people. Long before Accenture’s global workforce passed the 200,000 mark, we recognized that we required a more technologically advanced approach than the company’s home-grown systems. At one time, 45 highly localized staff-recruiting systems, often relying on manual data entry, had to process roughly one million résumés a year for review. In 2006, the CIO Organization collaborated with Accenture’s human resources function to design and build an innovative new talent-acquisition system to keep pace with our aggressive growth. The new Accenture talent acquisition system – an automated, Web-based solution that runs in a software-as-a-service (SaaS) model with one, global data repository – made the recruiting process more consistent worldwide, and brought significant cost savings. It dramatically increased the efficiency and effectiveness of Accenture’s recruiters and reduced the time between application and job offer, allowing us to attract talent faster, better serve our clients, and stay ahead of the competition.

Solution delivery: Accenture delivers a bewildering array of business solutions and services to clients all over the world. Despite this diversity, many Accenture engagements begin the same way: once we agree on the scope of a project with our client, we must mobilize and organize a vast global team to deliver the solutions or services required quickly, efficiently and effectively. In the past, organizing these complex engagements depended almost entirely on experienced Accenture executives, who did not always have the tools to match the task – sometimes nothing more sophisticated than a spreadsheet. Our CIO Organization saw an opportunity to help our client delivery teams through technology, and we got to work. A new tool we created – “Manage my Engagements” – was deployed in 2010 to help Accenture executives launch engagements more rapidly, and manage them with consistency and predictability. For the first time, capabilities for work and time, contracts, financials and resource management have been integrated in a single-instance global application. Instead of spreadsheets, the solution gives our executives common tools to break down complex work, source and manage resources, view metrics, monitor finances, and track costs. Previously, executives had to enter data manually; the new solution pulls accurate data directly from Accenture’s master repository. Engagements once had work plans, forecasts and charge codes that were not linked; the new application helps our team leaders set up the work in the way they want to manage it, and then uses the same structures for budgeting and financial reporting. Clients are seeing new levels of accountability as Accenture teams more accurately track commitments. The new solution also lets Accenture report financial data the way clients need it. Accenture professionals gain from reduced administrative chores, freeing up more people to deliver greater value. Accenture’s corporate performance is aided by more accurate financial reporting, better business intelligence, and enhanced risk management.

Help the entire enterprise

Going beyond point solutions, the IT function is uniquely positioned to help the entire organization become more productive. Take the explosion of collaboration technologies as a case in point. Today’s social networking communities and Web 2.0 tools have captured the attention of enterprises everywhere. Advances in technologies and breakthroughs in collaboration promise easy connections, informal interaction, and help when you need it – classic small-office benefits on a global scale. Yet where do you start, how do you proceed, and when or where is the real pay-off?

Accenture has already made significant investments in these new technologies over the last several years, and is in the advanced stages of a pioneering implementation of communication and collaboration technologies for Accenture’s entire global workforce. Launched in 2007, the program is ambitious in scale and approach, and focused on changing the way people work across Accenture and with clients around the world. Dubbed the “collaboration program”, this effort is Accenture’s response to a variety of trends at work in every global organization, beginning with a new generation of tech-savvy, mobile workers. Intent on finding solutions fast, today’s workers expect access to the same networking tools at the office that they have at home. Our program is designed to make Accenture people more productive by providing comparable business capabilities and other innovative ways to connect and communicate with colleagues.

Here are just a few of the program’s major features:

  • Accenture now operates one of the world’s largest private networks for high-definition videoconferencing. With more than 70 installations, and still expanding, Accenture’s global network also provides direct access to clients and other companies using this technology.
  • Virtually everyone in Accenture now has access to personal communication and collaboration tools, enabling our professionals to turn computers into phones, instantly see who is available and how best to reach them, and launch free and secure audio or video conference calls or desktop sharing with one-click, drag-and-drop ease.
  • Business networking tools are rapidly spreading across Accenture, as users embrace affinity-style groups, microblogging and blogging as new online channels to enable swift and seamless global collaboration.

The immediate returns on these investments have been clear and convincing. More than 37 million minutes each month of peer-to-peer and conference audio calls within Accenture are now conducted fee-free via a voice over Internet protocol (VOIP) enabled personal communication interface. Over 5,000 hours of videoconferencing usage each month is also helping Accenture save millions of dollars in travel costs. Less quantifiable, but no less real, are the intangible benefits: gains in work-life balance experienced by Accenture professionals who travel less, and so can spend more time with their families without sacrificing on-the-job performance; increased efficiency, as people effectively pick the brains of their brightest colleagues through business networking tools; the overall advance in effectiveness resulting from greater collaboration across silos and geographies; and the growth of a more cohesive global organization with shared global values.

Reduce risk

For many corporations, the global financial crisis dramatized the importance of banks for operational survival. Corporate executives suddenly woke to the fact that banking relationships could turn into liabilities if their principal banks were unable to sustain normal activities. Payrolls could not be processed, hedging activities would be crimped, and the myriad other daily transactions required to keep companies funded and functioning might grind to a halt.

Exposure to this systemic risk was compounded by the proprietary technology systems linking bank and customer. These proprietary platforms made it difficult, if not impossible, for corporations to switch banks quickly or smoothly in a crunch. Companies now recognize the value of being able to change banks quickly, and of being less dependent on banking partners for daily cash needs.

Our IT team has helped Accenture manage these risks by collaborating with our treasury colleagues on the Accenture treasury transformation initiative, which does four things:

  • Replace bank “plumbing” – the proprietary platforms that enable transactions – with more flexible solutions, so that Accenture can work with more banks more easily, and change banks quickly by moving to the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
  • Move more transactions off proprietary banking platforms and onto the company’s own financial systems, so that if a company uses SAP as its primary financial platform, vital treasury processes will also leverage the same solution.
  • Move analytical tools, trading platforms and foreign exchange hedging capabilities inside the treasury function, so that corporate treasurers can execute these valuable strategies without the support of banks.
  • Move to a streamlined settlement process among the various entities found in a typical global enterprise.

This initiative has already demonstrated its value inside Accenture. Would other companies be interested in the solution we have crafted? What would we need to do in order to commercialize the application we have developed? These are the types of questions we are exploring inside Accenture, and are the same questions IT functions in every enterprise should ask whenever they create something with marketable value.

Enable growth

Is your enterprise active in the financial services area? Few industries are more heavily dependent on IT. If manufacturing is your field, what large-scale enterprise is not directly reliant on IT-enabled shop floor automation? Whatever business sector your company is in, the chances are that IT can play an integral part in enabling or accelerating top-line enterprise growth and bottom-line profitability.

As Accenture grew from 75,000 to more than 215,000 employees over the past decade, the IT function was continually challenged to implement the new technology required to support it. A dramatically larger company – with more people, more diversification, and revenues that nearly doubled – placed enormous demands on our infrastructure. More and different types of businesses required new and different technology, and the scaling of existing technology to accommodate larger transaction volumes. The network transformation initiative discussed earlier, when Accenture completely redid its global communications network, was one example of the growth-enabling tools that IT brings to the table.

Inside Accenture, our internal IT function is continually collaborating with other parts of the business in evaluating new growth opportunities in areas such as business analytics and software development. Every year, Accenture’s CIO Organization designs, builds and runs entirely new applications or adapts out-of-the-box applications to serve our internal business needs. In some instances, the solution we create for internal customers may also meet an important marketplace need.

Make smart value judgments

There is no shortage of areas in which value creation opportunities are readily found. Look no further than cloud computing, or device convergence among PCs, smart phones and netbooks. But before making a value-based investment decision on any given opportunity, you have to first make a smart value judgment.

For example, at Accenture we believe that it is strategically smarter to add value by focusing on entirely new capabilities than by tweaking existing ones. You can spend – and waste – a lot of money making minor revisions and enhancements to existing capabilities. The newly released and “enhanced” tool or application may run a little bit better, but is it so improved as to justify the investment, and is the incremental improvement starving other investments of quantum-leap capabilities? At the risk of generalizing, extensive releases of the same basic tool may add useful improvements, but are not likely to deliver a step-function change. You eventually reach a point at which the only serious strategic option is to step back, tear down what exists, and start from scratch. Making a smart value judgment about when you have arrived at that point is the essence of IT management.

When we look at technology investments inside Accenture’s CIO Organization, we strive to examine upfront whether or not our investment can be justified by a return in hard-dollar benefits, or whether the rationale for our investment will be framed in more strategic terms. Tempting though it may be to insist always on the monetary return, there are certain types of investments that cannot be justified by short-term return on investment (ROI) calculations, but will yield valuable strategic gains over the long haul.

Our experience with the re-platforming of Accenture’s internal portal illustrates the difference between incremental improvements and categorical gains. Several years ago, Accenture, like many enterprises, introduced the Accenture portal as a central source of information for our global workforce. Since its launch, continuing advances in web technology now make it feasible to support a totally customizable portal environment – one in which the user gets to decide what information they need, and then choose the information organization and display that best meets their individual working style.

In evaluating the next stage of the Accenture portal, we could have stayed with what we had, making only minor improvements. But Accenture’s human resources department, in collaboration with the CIO Organization, concluded that the new, fully personal portal would make our people more productive by making it easier for them to find information and manage their tasks and schedules. Even though it was difficult to put a hard-dollar value on the savings of five or ten minutes worth of employee time a day, we felt that the step-change migration to a totally personalized platform made sense, and so we went ahead.

Communicate the value you create

It is always a good thing to create value for your enterprise. So why not share the good news with all of IT’s key stakeholders? It amazes me to realize how many IT professionals I encounter who do a magnificent job with value creation, but when it comes to value communication fail to make their case as completely and persuasively as they could. After you have exploited every opportunity to do things better, faster and cheaper, and then gone on to exploit many of the other value opportunities we have discussed, you should seal the deal for your IT function by letting the world know about your success.

Perhaps the explanation for such an obvious yet mysterious lapse is the simple fact that people do not automatically think they need to communicate when it comes to IT. Our experience inside Accenture suggests exactly the opposite. High-performance IT is all about changing the way people work, for the better. Wherever people and change are involved, the communications discipline must be central to the process. Therefore, each of our IT initiatives within Accenture is not complete without carefully planned communications and change management support.

We begin with the basics: who are our key audiences, what are our key messages, and how will we effectively convey those messages to our targets? Whether the message concerns a service outage or the deployment of new capabilities, we make the standard tools and techniques of communications and change management an integral part of every implementation. When we introduce new tools and applications, rather than simply putting a new tool out there and waiting for word-of-mouth to spread the news, we actively promote user adoption with all the means at our disposal: dedicated microsites filled with support information, podcasts and webcasts, custom-created communications targeting specific user groups, promotional videos featuring satisfied user testimonials, and every other technique in the marketing communications toolkit.

The collaboration program described earlier in this chapter exemplifies the vital role that communications plays whenever you are talking about using IT to change the way people work together. With more than 15 distinct tools in the collaboration initiative, we invested as much time and effort driving user adoption of the tools as we did launching them in the first place. A critical component in our approach to change management was the recognition that changing the ways people communicate and connect with one another on a daily basis is as complex an assignment as any change management challenge.

Not surprisingly, the “selling” of the collaboration program involved a great deal of collaboration in itself. Colleagues in change management, internal communications, marketing communications and IT worked together to create a dedicated internal Accenture microsite that was the central promotional focus for information. With this microsite as a clearinghouse for news, the team sponsored community meetings, placed hundreds of articles in internal Accenture publications and websites, and sustained a high profile for the effort through monthly company-wide e-mails, adoption “competitions” among organization units, viral videos and promotional videos.

Here are some of the lessons learned in communications and change management that may be of use for other enterprises considering a similar journey:

  • Sponsorship support should be secured at the highest possible levels within affected business units, so the change is not an IT initiative, but rather a business initiative.
  • IT, change management, internal communications and marketing professionals should be brought together to create a unified change effort.
  • An integrated and consistently branded communications strategy should be employed for the overall program, rather than launching many individual vehicles.
  • Distinctive launch communications and comprehensive training needs to be created.
  • Specific use cases for collaboration tools should be developed to encourage adoption, and early adopters should be identified as your change agents.
  • Collaboration tools need to be integrated into existing business processes and functions.
  • The adoption of tools and technologies should be tracked, and additional support delivered wherever variances suggest obstacles to adoption.

Moving beyond deployment and adoption to strategic communications, we continually seek to inform executive leadership and other key audiences about new capabilities, client success stories, user testimonials, and the tangible value being created for the enterprise through effective investment in IT. We, of course, report on a scheduled basis to Accenture’s senior leadership, using such tools as our IT strategic performance scorecard (see Figure 14 in Chapter 3).

The important point to note is that reporting and accountability do not simply travel upward to our superiors. Since we also view our internal customers as the “boss,” we believe we have a responsibility to let them know how we are performing. Communications specialists – who are an integral part of the IT organization – design message architectures that segment our audiences, and tailor the messages to be conveyed to each distinct group. The emphasis, throughout, is always on the substantive measures of performance achieved and value delivered, rather than mere promotion. The communications effort extends to the development of an annual report on IT programs, this created for both our internal customers and for Accenture’s external customers who are interested in how we are going about the business of IT.