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C: The Case of Accenture (Management Project)

ABSTRACT

Cloud Computing is heralded as the next big thing in enterprise IT. It will likely have a growing impact on IT and business activities in many organizations. It is changing the way IT departments used to work in order to get competitive advantages and meet the needs of the global economy. Accenture consulting currently has an advantage because they are developing innovation inside and also bringing innovation from outside to its current offer.

What is of particular interest in this research is the impact of new technology such as Cloud Computing to Accenture’s Business Model as a consequence of the maturation of the Internet as an IT platform. Accenture is opening its Business Model, using an approach of Open Innovation, accessing external knowledge in order to support their R&D processes. The firm is using both external and internal ideas to develop new technologies to take them faster to the market, according to the studies of Henry Chesbrough.

The intention of this thesis is to address the following questions; How Accenture focuses on new markets and new businesses (such as Cloud Computing), as well as their current business (such as SAP)? What kind of innovation process is Accenture BM with SAP, according to the description made by Henry Chesbrough? How Accenture by working on Cloud Computing is moving its BM from type 5 to 6 according to the description made by Chesbrough? To answer these questions an exploratory case study approach was taken with the intention to detect patterns and regularities that will help to precise the answers and capture the impact of Cloud Computing to Accenture technology consulting services.

Accenture is passing from a Business Model type 5 where integrates its innovation process connected to its Business Model and where is using IP as a financial asset; to a Business Model type 6 where Accenture is able to change, and is changed by the market, in other words, Accenture is creating a Business Model which is adaptive and where its innovation process identify new Business Models, using its IP as an strategic asset.

Even though Cloud Computing is at a nascent stage; to be successful organizations should take small, incremental steps toward this new environment so can obtain early benefits for applicable business situations, and learn how to deal with the associated issues and risks. While cloud computing still has a long way to go before proving its full value, Accenture is moving fast to make it a vital part of its value proposition and its Business Model.

BACKGROUND AND RESEARCH CONTEXT

Introduction

This thesis will discuss the capabilities of Cloud Computing, both today and into the future, and how Accenture consulting integrates its current activities like SAP implementations with new business activities and innovations like the cloud into its Business Model, offering new services to its clients.

Cloud Computing is heralded as the next big thing in enterprise IT. It will likely have a growing impact on IT and business activities in many organizations. CIO’s are looking beyond to see what opportunities and challenges lay in the cloud and how it can be use to promote the organization’s strategy. Cloud Computing is real now because of the maturation of the Internet as an IT platform. It allows companies to consider services such as, virtualization, standardization, and open source software to be integrated into their products or services. It allows not only enhancing their services, but it allows the users of those Internet based products to be brought into the ecosystem of a consulting company.

KEY CONCEPTS: BUSINESS MODEL, OPEN INNOVATION AND ALLIANCES

Business Model

In order to analyze Accenture’s Business Model, I would like to start by clarifying the concept of Business Model (BM). It describes how an organization creates, delivers, and captures value (economic, social, or other forms of value). It fulfills two critical functions: it creates value for the business offering to the value chain that the focal firm seeks to serve (the firm’s suppliers, customers, distribution, partners), and it enables the firm to capture a portion of the value created for it self4. In other words is “How a Company intends to make money out of their ideas, resources and technologies.

TECHNOLOGIES INVOLVED ON THE ANALYSIS OF ACCENTURE BM: WHAT IS SAP AND WHAT IS CLOUD COMPUTING?

Figure 1. SAP R3 Core Business Processes Modules

Figure 1. SAP R3 Core Business Processes Modules.

SAP is an Enterprise Resource Planning (ERP) software product capable of integrating multiple businesses applications representing a specific business area, these applications update and process transactions in real time mode. SAP has the ability to be configured to meets business needs.

ACCENTURE BUSINESS MODEL, THE CASE OF SAP

This chapter will discuss Accenture’s BM first with its general services and then exemplified with a current business technology such as SAP. Also I will explain how this BM lies in type 5 according to the description and characteristics given by Henry Chesbrough.

Figure 2. Graphic description of Accenture’s Business Model (type 5)

Figure 2. Graphic description of Accenture’s Business Model (type 5).

The main components I will use in order to describe Accenture BM are: Offer (value proposition), Infrastructure (capabilities, partners, key processes), Customer (relationship, channels, segments) and Finance (cost, revenues profits).

Figure 3. Accenture’s Operating and Industry Groups, Source: Fact Sheet Q1 Fiscal 2010

Figure 3. Accenture’s Operating and Industry Groups, Source: Fact Sheet Q1 Fiscal 2010.

With SAP, Accenture divides his customers in three areas: by subject, by industry and by geography. (Already mentioned above). As an example of Accenture’s SAP customer I would like to mention Nordic Investment Bank, Subject: Financial Management, Industry: Banking; Financial Services and Geography: Norway, where Accenture implemented a SAP Banking Solution.

MOVING TO A NEW BM WITH OPEN INNOVATION, THE CASE OF CLOUD COMPUTING

Figure 5. Graphic description of Accenture’s Business Model (type 6)

Figure 5. Graphic description of Accenture’s Business Model (type 6).

In order to describe Accenture’s Business Model with the incorporation of Cloud Computing, I identified two possible scenarios: A) Accenture develops its own cloud technologies, offering new services to his clients and B) Accenture makes alliances with Cloud Computing providers (as other technologies), developing new offers and services, in a continuous innovation process, helping clients by capitalizing cloud computing potential and also utilizing external clouds for its own infrastructure.

RECOMMENDATIONS AND CONCLUSIONS

Accenture, as one of the most important technology consulting service providers around the globe is doing all kind of efforts to stay ahead of technology trends. They are opening its Business Model and using an approach of Open Innovation with the aim not only to share and offer to third parties its internal innovations, but also receiving and using new technologies and products from outside, complementing suppliers and customer’s requirements; also its own value proposition.

Accenture has created a repeatable and convincing process by developing an autostrengthen process full with training, continuous methodology improvement, creation and sharing ideas, and constant application of these components across industries and regions. Within the consulting industry, this is a key differentiator, and the company’s CMMI certification is often leveraged during the sales cycle to gain competitive advantages. Accenture’s success in this area go further than discussing previous credentials with new clients by providing tangible facts that similar success will be achieved in future assignments, because it is the process and methodology itself that creates value and deliver successful projects.

Accenture is passing from a BM type 5 where integrates its innovation process connected with its BM and where they use IP as a financial asset to a BM type 6 where Accenture is able to change, and is changed by the market, in other words, Accenture is creating a BM which is adaptive and where its innovation process identify new business models and also use IP as an strategic asset.

Source: BTH
Authors: Jordi Isse

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