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Strategic It Transformation at Accenture

In: Computers and Technology

Submitted By bobbyv
Words 646
Pages 3
Abstract: In 2001 Accenture made the very bold decision to separate from its parent company Arthur Andersen. The start-up company faced the same problem of building a new IT infrastructure but it has its bright potential ahead. The main dilemma is to be chosen in between 3 options: to keep using the decentralized approach in which each country chooses its own IT platforms and has autonomy to run them, to try with a mixed approach in which the same standard applications would run throughout the enterprise but would be managed independently by individual offices or to switch to a single firm approach and boldly shoot for a centralized implementation of its most critical systems with all its offices interconnected on the same instance of a software platform.

Case Context:
Accenture has annual revenue of $11 billion, 75000 employees and more than 50 offices available around the world. Furthermore it had the right to use Andersen’s technology for one year. The biggest challenge that Andersen’s system faced, is the interconnectivity of the legacy applications. In addition due to the obsolete software platforms the remote access and control over internet of the key systems and data bases is impossible. Moreover individual accounting and human resource software systems is applicable for different offices.
The IT department was thought as a cost center with an assigned budget, run by technology engineers with less management involvement. The technology priorities had a political component in which the internal stakeholders with the highest ranking were first in line. IT decisions are made at individual levels with offices diffused in different countries. All these offices are operated by their own staff, developing their own software applications. This leads to increased cost of supporting IT infrastructure, difficulties in integrating information and attain economics of scale.

Case problem (situation):
The most strategic topic which came into consideration was to select between the best-of-bred and the one-platform approach. Because of the complexity created by 600 global and 1500 local applications opted for the single vendor approach. Accenture chose Microsoft as a partner to run most of its back end IT operations as well to provide basic communication and productivity applications. The cost effectiveness were significant, for instance Accenture was able to move from the three distinct servers to one, for more than four hundred Novell files to 50 Microsoft servers. As its worldwide application provider for financial and human resource solution was selected SAP, HP for its hardware and CISCO for all network related equipment.
Outsourcing was Accenture’s fundamental initiatives to reduce costs, for what it looked for lower cost regions like India, South Asia and Latin America. In 2010 only 14% of the IT staff worked directly for the company whereas the majority was borrowed by the Global delivery network of Accenture.
The “follow the sun” model was used by the Accenture’s experts to deliver customized IT solutions.

Case Analysis:
To decide which are the most relevant services to be outsourced, Accenture divided its activities into different buckets: processes that provide differentiating competitive core, processes involving highly confidential information and processes involving tasks that were repetitive. Moreover Accenture was open to outsourcing routine IT tasks to capable providers. As outsourcing matured it continued to seek opportunities to leverage economies of scale and location.
In implementing the single instance approach, Accenture indentified two additional approaches. First of all it was important to stay current on mission critical applications. When missions were not mission critical upgrades were analyzed based on “if it needs to be done, and if needs to be done now”. Secondly a project approval process driven by business benefits and return on investments ensured that right process were taken at the right costs.
Accenture was successful in running IT like a business, managing a nimble and flexible IT department with some of the lowest per employee costs in its sector.…...

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