Lessons from Accenture's Digital Transformation Machine

Wondering how to make your company more digital -- and why it's worth it? Learn the inside story from Accenture Digital chief Mike Sutcliff. His 36,000 employees -- and 1,300 data scientists -- are on the front lines of digital transformation in companies worldwide. Gain practical insights from an expert's perspective on disruption, business models, and competing in a digital world.


Jan 13, 2017

Wondering how to make your company more digital -- and why it's worth it? Learn the inside story from Accenture Digital chief Mike Sutcliff. His 36,000 employees -- and 1,300 data scientists -- are on the front lines of digital transformation in companies worldwide. Gain practical insights from an expert's perspective on disruption, business models, and competing in a digital world.

Mike Sutcliff is group chief executive of Accenture Digital, which integrates digital assets, software and services across digital marketing, analytics and mobility to help clients drive growth and create new sources of value.

In this role, Mr. Sutcliff focuses on leveraging the full breadth and scale of Accenture’s cloud, systems integration and enterprise application capabilities—and its global delivery network—to help clients integrate digital into all facets of their organizations to transform their businesses. He oversees a global team that provides a comprehensive portfolio of business and technology services, from developing digital strategies to implementing digital technologies and running digital processes on behalf of clients. Mr. Sutcliff is also a member of Accenture's Global Management Committee.


Michael Krigsman: Welcome to Episode #212 of CXOTalk. I'm Michael Krigsman, an industry analyst and the host of CXOTalk. CXOTalk brings together truly, I mean genuinely the most interesting and innovative people in the world for in-depth conversations, where we talk about the impact of technology on business, on society, on our culture, and these disruptive forces that are taking place. I want to thank Livestream, because Livestream provides our video infrastructure; and they, man, they're really good. The video is enterprise-quality, and it just simply works, and that's about the best thing I can say for them. It's just excellent.

Today's show, we are very fortunate to have with us Mike Sutcliff, who is the group Chief Executive of Accenture Digital. Accenture Digital is a very large organization; it's doing fascinating things. And, Mike Sutcliffe, how are you and thanks for being here!

Mike Sutcliff: I'm great! It's a real pleasure to join you again, and look forward to the discussion.

Michael Krigsman: So Mike, Accenture Digital. We have on our website that Accenture Digital has 36,000 employees, and $9 billion in revenue. But, I guess those numbers are old, because you guys are growing pretty quickly.

Mike Sutcliff: Yeah. I think we gave you the numbers from the beginning of last quarter, but we're up to about 41,000 today. And, really we're just the enigine inside of Accenture. Accenture's got about 400,000 employees around the world. Many of them are doing digital work as well. So it's a big team, and growing constantly.

Michael Krigsman: And, you were recently named the fastest growing, or the largest interactive agency by Advertising Age Magazine. 

Mike Sutcliff: Yup, both actually. We answered the Ad Age survey for the first time two years ago, and then we were the third largest digital marketing agency in the world. We grew at about 40% that year; and so last year, when we answered the survey, that put us into the Number One position in terms of size. I think you've probably seen recently we just announced the Karamarama acquisition in London, which we're very pleased with. We've got a lot going on. It's an exciting time to be in that particular part of the industry, because what the Chief Marketing Officers, and the Chief Digital Officers, and the Business Unit Excecutives want to achieve is changing, and all of the tools that are available to them are changing. So, it's a great time to be in the business we're in, which is helping them figure out what they can do, and how to go make it happen.

Michael Krigsman: So Mike, as we begin this discussion, give us some context, and tell us what are the focal points, or the focal areas for Accenture Digital, this very large, global organization?

Mike Sutcliff: Well I guess the first thing is, we're working with each of our industry chains across Accenture in our business consulting and our strategy practices, to think about how those industries are likely to change. How the participants might change, the economics, the commercial models, and the operating models. And then Accenture Digital tries to bring the depth of skills in three areas, that we need to stitch together to help those industry teams bring digital transformation to life for our clients. 

The first piece of our business is Accenture Interactive, the digital agency that we talked about. And within Accenture Interactive, we've got a team that's world-class at designing experiences, and thinking about how to create fantastic experiences, not just for the end-customer, but for employees and others who are involved in delievering the value for a particular industry. 

We also are world-class around both business and business-to-commerce e-commerce, and multichannel management as people are trying to think about digital not only as a separate channel, but part of a multichannel experience. We've got people who are thinking about what the next wave of commerce is going to look like. The Accenture Interactive team has figured out that one of the big challenges for our clients is in the area of content management: understanding what type of digital assets are needed, how to create those assets, and then how to distribute them, so that you can create a very personalized experience. And, we've got lots more that we're doing to try and move into what we believe the next wave of the digital agency will look like, as clients try to focus on personalization and creating experiences that matter at a more granular level. 

The second part of what we do, is Accenture Analytics. That is a rapidly changing business, but I would say 100% of the jobs we do require skills from our analytics team, whether they're traditional advanced analytics, or some of the emerging artificial intelligence tools and techniques that clients are trying to use, again, to invent what's possible and think about a different future.

And then, the third piece that we focus on traditionally is what we call Accenture Mobility, where of course, we do mobile app development and testing, but we also are very, very active in the world of IoT, both with our own platform and partnering with others like Microsoft, GE, Intel, SAP, etc. And, that has now expanded into kind of a fourth area that we're just launching called IndustryX.O, where we're working with clients to actually build and design physical products, smart products and services, and integrate the world of operational technology and information technology around smart manufacturing. So whether you start with digital marketing, or you go all the way to the other side with manufacturing and distribution and product design, we've got a fairly wide breadth of practice, and it's really interesting, because we're seeing that it's equally interesting to those consumer-facing industries that many people think about when they think about digital. And, it's also interesting to the oil and gas companies, the chemical companies, the utilities, and many of the other industries that traditionally are thought of as directly consumer-facing. 

Michael Krigsman: Mike, when you talk about the central aspects of digital experience, and e-commerce, and personalization, and the use of data, and the use of analytics, this, as you said, goes far beyond marketing, and your customers are, in many cases, traditional, well-established organizations. How do you take them through this kind of transformation, which, in many cases, is just so different from what they've done in the past?

Mike Sutcliff: Well the good news is that most of our clients are interested in the topic, they're actively working on it, they're asking good questions, and they're thining with a fairly broad perspective about what's possible. We traditionally start with the conversation around the digital customer channel and market question, asking how their customers are behaving, how digital tools and techniques can enable them, whether there are new digital markets they need to participate in, or whether the digital channels need to be integrated differently into their multichannel experience.

So, when we start on that side of the conversation, they start to imagine a different capability around how they personalize and interact with customers, and then they start to really dive into the experiences, thinking creatively about what's possible in the future about how they're going to serve the customers. Now once they've imagined that, they come up with these fantastic ideas of what the next generation of an experience might look like, they find the reality of the existing operating model is not going to allow them to deliver that at scale, in a very efficient manner, so they then have to turn the table to the digital enterprise, and they have to ask the question, "How are we going to operate the company? What are the basic business processes, the organizations, the technical architectures, how are we going to take advantage of other people's platforms in addition to the ones that we own internally?" And they start asking those questions. When they've gotten both of those questions on the table at the same time, then we know they're really ready for a digital transformation that can work at scale, and also happen at pace. 

Michael Krigsman: So, when you think about, or when you talk about a digital organization, what does that mean for you, and for your customers?

Mike Sutcliff: Yeah, that's a great question, because I think it's different by industry in terms of how it's actually implemented. But, there are some indicators that tell us that people are thinking the right way in embedded digital in their organization. The first is that they think fairly expansively about digital. They don't create a digital sub-unit and think of it as something that's on the side, kind of an experiment over in the corner, they think about digital as something that's going to be pervasive across the business. 

The second thing is they stop thinking about their business as some black box that they're going to design and operate, kind of as an independent entity. And they really start thinking about collaboration with the ecosystem, the platform economy, how they're going to integrate technologies with others, etc. And, when they start thinking in that manner, they start seeing opportunities to create leverage in their business that hasn't existed before. That, then, I think usually leads them to think differently about what's possible in terms of what they can do for their customers, the value propositions they can create, the experiences they can provide, and they start to think about smarter products and smarter services, and different commercial models, as being something that they should move towards as opposed to something they should be afraid of. 

[...] So when you ask what makes an organization digital, it's really they're openness to a more, what I'll call "creative and thoughtful" process about how they're going to create value for their clients, and what the operating models and the tools, and the techniques you're going to need to get there.

Michael Krigsman: So, they're re-thinking, I hesitate to say "from the ground up," but they're re-thinking core principles of what they're selling, how they're selling, what is their relationship to their customers and so-forth.

Mike Sutcliff: Yeah, I hope so! I mean that's the opportunity that digital provides. I mean, you know, from our perspective, the tools and the techniques that we're bringing from the digital markets are just a new set of tools that can enable them to accomplish their mission, whether the mission is providing better healthcare, or better government services, or a better shopping experience, or a better educational experience, whatever that mission is, we believe the digital tools and techniques are going to allow them to create an inflection point that creates a much better outcome for the people that they're trying to serve. And as long as they start with that in mind, and they're open to the fact that the way they've accomplished the mission in the past was based on the tools that were available in the past, and the way that they're going to accomplish it in the future is based on all of these new tools that we think that they're make progress pretty quickly. 

Michael Krigsman: I want to remind everybody we are talking with Mike Sutcliff, who is the Group CEO of Accenture Digital, which is a $9 billion organization with 41,000 employees, talking about digital transformation. And you can tweet right now questions directly to Mike using the hashtag #cxotalk. And Mike, we have a question from Twitter, from Jill Rowley, who is asking can you talk about the impact of digital transformation on business-to-business sales? 

Mike Sutcliff: You know, that's actually a great question. We have that question quite frequently from clients. Going in an assumption that many people have, is that the digital tools and techniques are really useful in our personal lives as we're consumers, but they don't necessarily translate into a business-to-business environment. I would tell you our experiences, they're equally applicable there. 

The first thing that we note, is that the expectations that you have as an individual, in how you use digital tools personally in entertainment, in shopping, in excercising, or other areas of your life, they translate into the business world. And so, into a business-to-business environment, what is still true is that we see a massive amount of work going on through search, through product experimentation, where people are out looking for different products that conserve their needs, for simulations, for all sorts of ways that people can educate themselves on the availability and the capability of different products in the ecosystem. 

But we also see what I would call more industrial connectivity, just being creative through API architectures, as members of the supply chain start to work together in a much more collaborative fashion; as they start opening up their product catalogues, and the metadata associated with their products and services; as they start providing transparency into the supply chain, and the availability of product in different geographies, or different points in time; as they start opening up some of their pricing models to others in the ecosystem to participate, and creating joint solutions together. 

We see all sorts of activity going on in the business-to-business space, that's creating better connectivity, better transparency, faster cycle times, and it's allowing people to collaborate in ways that they haven't in the past. So, we absolutely see clients in the B2B space making massive progress with digital. 

Michael Krigsman: This is amazing. I mean, to think about large industrial companies collaborating, and creating supply chain transparency, through APIs. Can you tell us are there particular industries that you see right now, or particular types of companies, who are facing great disruption, and also who are doing this really well? 

Mike Sutcliff: Well, I guess probably the most well-known case study that people are talking about is what GE has been doing with Predix, right? The underlying assumption that they had when they set out on the journey was that they could introduce new technology into the ecosystem that would allow people to creat digital twins not only for the physical products, but digital twins of the manufacturing processes. I think in the early stages, they were focused on GE equipment and GE products, but now they opened it to a multi-vendor, multi-product environment. And, they're moving across industries. We see them in oil and gas pipeline monitoring, we see them in healthcare claims processing, we see them working with utilities and power generation, and nuclear management. So, they're a great case study of somebody who's out there pushing digital tools into the environment and trying to create connectivity not just between GE and GE's customers, but between GE's customers' ecosystems, and that's making a huge difference.

Now of course, GE is not alone in that. We see SAP going down the same path, you see Snyder Electric, and Siemens, and others in the industrial sector who are very, very rapidle taking advantage of similar tools and capabilities. Of course, the automotive industry has always been a leader, in terms of applying robots to the manufacturing process, working across the supply chain differently, and even today, we see them experimenting and trying lots of new things to try and move the ball forward. So, whether it's power generation, or automotive, or oil and gas systems, there's plenty of activity going on. 

Michael Krigsman: What about the role of technology? You know, it's kind of implicit in this that technology is a key piece, that's what we tend to focus on, but the culture's also a key piece. So, how does technology and culture, tech and business, fit together and intertwine here?

Mike Sutcliff: You know, another great question Michael. The first thing that we would say is the technology is the toolset. It's not the end-goal, it's not the catalyst that's going to be the driver to get the result our clients are looking for. It's just the tool that they use to get there. As I talked earlier about our clients' missions and their ability to go achieve their mission in a different way, that's highly dependent on their workforce, and the creativity of their workforce, the energy of their workforce, their willingness to change the way they work and to do things that maybe haven't been done in the past. 

So, for us, if you look at our tech vision that we produce every year, and you go back to 2013, you remember the very first tech vision that we did that was related to digital. In 2013, we said "every business is a digital business." And people back then were saying, "Well I'm a chemical company. Why would I be a digital business?" But now, they all get that. They understand what we were saying. In 2014, we actually said, "Well, it's actually not about you, it's about the ecosystem. And so, stop thinking of your business and the walls of your business, and start thinking about the ecosystem and understanding how to leverage the other pieces of technology that you didn't create, but you can now take advantage of." In 2015, we actually said, "From disrupted to disruptor," and what we were saying is, "You don't have to wait to be disrupted, you can go become the disruptor." This year, we talk about putting people first. And what we said in our central technology vision was technology is about enabling people. It's about enabling people to do things differently, and accomplish things they haven't been able to accomplish before. So that's really how we think about technology. We think about it as the enabler, that allows the workforce to go do things they weren't able to do last year. 

Michael Krigsman: This creates a very specific challenge, I think, because it means ... See, in the old days, technology was siloed. So, we had the technical experts, and they were inward-looking at that technology. But today, if technology is just the jumping-off point, those technology experts need to be working lockstep, hand-in-hand with the people on the business side. And so, how do you create that kind of cross-silo, cross-departmental organizational thinking and action?

Mike Sutcliff: Well I guess there are couple things that come together. The first things is that most of the IT organizations that we speak with are very conscious of the fact that they have to move past the traditional systems, or [...] systems of control, into the new world of systems of engagement, where they're working with the marketing organization, they're focused on customer engagement, and creating and delivering different experiences. So, they're part of the conversation. 

But, in many cases, they don't have the skills, the assets, the capabilities, or even the funding to do everything that the business wants to accomplish. So at the same time, the internal IT organizations are pivoting to this different world, they're learning new architectures, [and] they're building new capabilities internally, we're also seeing a transfer in many of the cases where a Chief Marketing Officer, or a Business Unit Executive, or a Chief Digital Officer says, "Maybe you don't need to own the technology. Maybe I can rent it. Maybe I can go subscribe to a service that exists in the ecosystem, and I can take that and then mesh it with what we had internally, and I can create what I'm looking for, and I can experiment. And then, if six months from now, it's not maybe in my needs, then maybe I'll go back and build something [...]." But, we are seeing a lot more willingness to subscribe to services, and to mix and match from the technology ecosystem, the capabilities that they need to get a particular capability to deliver for the busienss. And we thing that's healthy. We think the mix-and-match approach and the experimentation that comes with that is allowing clients to move faster. And then, if they decide that it's strategically important that they own something that they build internally, they can always go back and do that, but they've gotten the speed-to-market accomplished without necessarily spending the budget that would have been required to do it from scratch.

Michael Krigsman: What about the role of IT? Where does IT, and the CIO fit into this equation?

Mike Sutcliff: Well, I think they're integral. I mean, you can't accomplish anything that you want to accomplish in terms of creating better experiences, connecting with your customers, and in delivering the experience that you've promised through the marketing organization, without incredibly strong IT. I mean, it's no longer a luxury. IT is a core requirement, not just to run the business, but to actually deliver the experiences that customers are looking for. 

And so, the CIO, in almost all of the client situations that I'm personally aware of, the CIO is not just at the table, but they're driving the conversation in terms of what they can contribute. The difference is: they're now at the table with a lot more people who are all dependent on them to help them get there very quickly. So, it's a bigger conversation, but the CIO is just critical to getting it right.

Michael Krigsman: And what about the relationship between CIO and Chief Digital Officer? How do those pieces fit together?

Mike Sutcliff: Well, that kind of depends. You know, we've seen three different types of Chief Digital Officers that have been named in different industries. In many cases, the Chief Digital Officer comes from a marketing background, and they're really focused on what I would call the digital channel and the digital experience, and in many cases, they're more externally-focused and they're more willing to use external services and kind of move independently from what's happening in the CIO organization. But over time, those usually come together, because you can't really do much for the customer without access to all the customer information, all the product information, pricing information that exists in your legacy environments. 

The second kind of Chief Digital Officer that we see comes from the IT world, right? And they're the people who grew up in IT, and they're trying to figure out how to learn artificial reality, or artificial intelligence, or blockchain, or one of the emerging technology sets, and figure out how that applies to the business. And, those are all rapidly moving spaces, right? When you think about what's happening in the world of mobility, or in industry convergence with manufacturing, or blockchain. Those are not static environments, and so the Chief Digital Officers that are focused on the technology side of the equation are usually working hand-in-hand with the CIO. And what they're trying to figure out is how do we manage the two-speed IT question, right? We've still got to manage the legacy environment, create predictable results, we've got to manage the budgets, and you know, the pace of change on a fairly rapid timeline, but we also need to experiment and be beyond the leading edge, if not the bleeding edge, of some of these technologies, in order to serve the needs of the business.

And then the third kind of Chief Digital Officer that we see are people who are really businesspeople, who are focused on creating a brand new commercial model or disrupting an industry value chain, fundamentally changing the way a particular business is going to execute. And so, for example, if we think about how healthcare is working today, right? What we hope is not that we get some incremental improvements in how delivery is executed in the doctor's office, or in a particular part of the hospital, we're thinking about how we use preventative medicine to avoid a lot of the process that are occurring from the very beginning of the process. And so, that third type of Chief Digital Officer is usually relying on the CIO to answer the question, "What's possible? Can you do this?" 

And, what we're seeing is all three of those types of Chief Digital Officers, over time, become more and more dependent on a very productive, symbiotic relationship with the CIO, in order to get their jobs right.

Michael Krigsman: And I wanted to remind everybody we're talking with Mike Sutcliff, who is the Group CEO of Accenture Digital, and you can ask questions using the hashtag on Twitter, #cxotalk. Hashtag, #cxotalk. 

Mike, you've been talking about placing the customer at the center, and marketing is also dramatically changing as it becomes digital, and is evolving very, very quickly. And you're right in the center of that. So, what do you see is happening to marketing at your most leading-edget clients today?

Mike Sutcliff: Well, I guess the first thing you would say is they're all well down the path of figuring out how to change the balance and the way in their advertising activities between traditional media and digital media. But that took several years for them to figure out how to take advantage of all the different digital markets that existed, how to place ads, and where they're getting value or not getting value. In that particular space, there is a huge transition going on to video. And so, we're seeing an explosion of video. And, what we expect to see in that particular space in the next generation, is the more advanced uses of artificial, virtual, or mixed reality. So, it's a lot of experimentation going on now. There' a lot of excitement about the difference that we get in engagement with customers using video, as opposed to the more traditional tools that they've been using in the past. But, I would say that's the kind of well-understood ground and most people are making very, very rapid progress.

What the Chief Marketing Officers are asking themselves is, "How do I fundamentally change the level of engagement that we have? So I understand how to attract them, I understand how to create a conversation with the, but what I really want to understand is how do I create an experience for them, that sticks, that creates loyalty and predictability, and how I'm going to engage, and hopefully creates a customer experience that they're just not going to get elsewhere?" 

If you look at, for example, what we see AT&T doing today, and the market that they're serving, you know, we see them trying to change the value proposition experience with customers who are all wanting access to video. So we're seeing the launch of DirecTV now, and the promise from AT&T that if you're using the AT&T mobility option, you're not consuming your data. That's a really thoughtful approach in saying, "We're trying to create stickiness in the customer experience that our customers can only get from AT&T." You probably saw the recent announcement we made with Carnival Cruise Lines, where Carnival Crusie Lines is trying to imagine, and then create the best possible experiences for anybody coming on a cruise, from before they've stepped on the boat, when they've thought about what's going to happen on their cruise, what would they enjoy, what activities while their on the boat, what activities while they're in a port; and then while they're actually there, how do we make it seamless and easy? How do you avoid lines; how do you get rid of the frictional experience of trying to pay for things while you're in different environments; and so they're thinking very, very broadly about that customer experience. 

And, that's what we're seeing CMOs focus on, because they're saying, "Creating fantastic customer experiences starts with how do I communicate; how do I sell; how do I engage them, convince them, become them, [in order for them to] consume some of my products and services?" But more importantly, when they're here, do they believe that they're getting something that they can't get elsewhere, that this is the most attractive place for them to come do whatever their intention is. 

And so, for us, the Chief Marketing Officer's focus is shifting from engaging in, and trying to attract attention, to say, "No, we know how to do that. Now let's focus on how do we design and deliver an experience that delivers the promise that this brand stands for? And how do we make that so unique that we create better loyalty, repeat customers, etc. because that's a much more profitable way to run your business." And, that's what we seem focused on today.

Michael Krigsman: So, you unique, personalized experiences that the consumer cannot get elsewhere. So, how are these leading-edge companies creating these personalized experiences?

Mike Sutcliff: Well, first question is do they know their customers, right? So, Step One is really understanding the customers, not necessarily the way they have in the past by segmenting the customers based on their demographics and profiles, but understanding their intentions and their behaviors. One of the concepts that we talk to clients a lot about is living services. Our pure design agency published a paper about 18 months ago on the concept of creating services that continue to learn about how a customer behaves, and then tune the service so it does a better job serving back to their customer.

And so, when we talk to clients about how their going to create these experiences that are so compelling, it starts with, "Well are you listening? Are you watching and understanding how customers behave? And, are you understanding their intentions at a personal level, based on not just their demographics, but their prior behaviors and interactions with you?" And then, if you've figured out how to organize so that you can personalize the response at scale, now that's really hard to do. But, it's easy to do when you're doing a pilot or a proof-of-concept, because you can just use brute force and you can have a small number of customers and say, "Wouldn't it be fantastic if we could do this for every customer?"

The question is, "How do you do that for every customer?" And so, one of the things we're working on right now is the pilot on how to treat patients who have diabetes, and help them manage diabetes over their life, so that they can have a healthier life with fewer side effects, and be treated at a lower cost, so that everybody's happy: the healthcare providers are happier, their family's happier, etc. That's a great example of a living service, because every single patient is in a different place in the disease pattern, and every single patient has a different lifestyle and a different set of preferences. So, it's trying to solve that level of personalization, but be able to do it for every diabetes patient in the world, that's the hard part.

Michael Krigsman: And you employ, inside Accenture Digital, you have something like 1,300 data scientists, and so I have to assume that those folks are playing a key role in what you're just describing now.

Mike Sutcliff: Yeah, and actually, if I said we keep growing and we're now up to about 1,800 data scientists, and they're all over the world. We have them focused in groups that are focused on particular areas of expertise, like machine learning, and we have some that are focused on particular industries and particular problems that they're trying to solve.

But, as I said, one hundred percent of the projects we do require people from Accenture Analytics to get involved, because if you're going to do this at scale, you have to be providing actionable insight that people who are on the front line of serving your customers can actually use in their day jobs. And you have to do it in a way that makes it basically invisible to them. Paul Daughterty, who's our Chief Technology Officer, when he talks about our point of view on artificial intelligence, he says, "Look, we're not trying to make superhumans, we're trying to make humans super." And what that means is, we just want them to do their job in a way that's very intuitive. And we want to provide them the decision support in the insights, in the normal flow of what they're doing, so they can do a better job. And, our data scientists are trying to figure out, "Where can we get the data, not just internally, but externally? Where can we get the data; how can we use it; how can we create insights; and most importantly, how can we get the insight to the person in the business that needs it so they can use it in real-time?"

So, that's the focus of our data science team. Of course we do the traditional business intelligence, and the analytics that describes what's happened in the past, and maybe even it describes why it happened; but we're much more interested in the sets of data science that ask the question, "What's going to happen, and what should I do about it?" And for us, that's kind of the pivot point of where we're focusing our data science technique.

Michael Krigsman: So, on the predictive analytics?

Mike Sutcliff: Exactly.

Michael Krigsman: We have a question from Twitter, and I hope I'm going to pronounce his name correctly, Sohail Sarwar. And Sohail is asking about the changing role of the Chief Financial Officer in supporting the business in a digital and strategic way during this era of digital transformation.

Mike Sutcliff: You know, another really excellent question. One of the things that we see with the introduction of many of these solutions that are enabled by digital tools and techniques is they change the underlying economic model that might have existed in the industry or for particular product and service, and especially when we see new entrants come in disruptively, who are monetizing the customer relationship or the product experience in a completely different way.

So, the obvious answer to this question might be of course the Chief Financial Officer needs to approve the projects, and provide the funding, and probably needs to be part of the decisions on how you shift spend across the different business units, and how do you think about the investments in the digital transformation. But, they won't really be doing that unless they understand and really appreciate the potential disruption to the commercial models, to the pricing algorithms, and to the market share that's existed in the past, when these disruptive solutions get introduced.

I just saw a survey that was published yesterday, that said that one third of the consumers that were surveyed in the United States were asked the question ... They were all asked the question, "If one of the social platform providers like Facebook were to enter the financial services industry, would you transition your financial services relationships to somebody from that world?" And one third of them said, "Yes, we would absolutely do our banking, or get our home loan, or take a credit card from somebody like a Facebook." If you're the Chief Financial Officer, and you're in the financial services industry, and you're thinking about how banks value a credit card customer, that's going to look a lot different when the credit card customer is coming from a different space.

Yesterday, we saw the announcement that Amazon has just launched a credit card that gives you 5% cash back if you order through Amazon. Well, if you're JPMC and you've been offering 2% cash back on physical products, and now Amazon is offering 5% cash back if you're working for Amazon, that's a fundamental disruption in the economics of the market you've been serving.

So the question is: Does the Chief Financial Officer really understand where those disruptions could occur? And how quickly it can evaporate the underlying economics that have supported the business model that you're operating today? If they get that, then they'll be actively funding the investments and the digital transformation program is [to] all understand what's at risk if you don't get this right.

Michael Krigsman: So essentially, this is analogous to the CIO, where you need somebody in that role who has the sophistication to really understand what the levers of future revenue, future business models are going to be?

Mike Sutcliff: Yeah, absolutely.

Michael Krigsman: So, we have another question from Twitter, and this is from Ram Prasad; I hope again I'm pronouncing your name correctly. And, he's asking a great question. I'll ask you to answer it quickly because we're running out of time.

Mike Sutcliff: Oh, boy.

Michael Krigsman: So, he's asking, "What are the digital opportunities for mid-sized services firms?" And I get this question from services companies as well. You know, we've been doing it as well. You know, we've been doing implementation of SAP or whatever, and the world is changing around us. What do we do?

Mike Sutcliff: I guess it depends on what kind of service you're providing. I mean, if you're talking about an IT services firm ...

Michael Krigsman: Sure.

Mike Sutcliff: Yeah. I mean, our business is getting disruptive, and one of the things that Accenture Digital is doing for Accenture is trying to position us for the disruption that's coming to our industry. So, I guess my advice to you would be: Learn as much as you can about the emerging technologies like artificial intelligence, augmented and virtual reality, blockchain, etc., and be relevant to clients in helping them implement those new, and very interesting types of solutions for their industries. I would say if you're in a part of the business that's commoditizing, just expect it's going to commoditize faster, right? So, I think the best advice I can give is: Reposition your team as quickly as possible into the emerging set of technologies that the clients are going to be shifting their spend to in the near future.

Michael Krigsman: And, it has just been tweeted that CXOTalk is trending #50 in the US at the moment.

Mike Sutcliff: Excellent!

Michael Krigsman: So, thanks to everybody who's tweeting. And we have just a couple of minutes left. We're talking with Mike Sutcliffe, who is the Group Chief Executive of Accenture Digital. His organization employs 41,000 people. And Mike in the last few minutes that we have left, 41,000 people, $9 billion of revenue, I can't even imagine. How do you manage that kind of an organization?

Mike Sutcliff: Well, I guess the first thing I would tell you is, we're very lucky to be part of the Accenture organization. If you follow Ellyn Shook, who is our Chief Leadership Officer and our Chief Human Resources Lead, or Julie Sweet, who is our CEO in North America, they're very actively talking about a lot of the employee programs that we're driving. We're not trying to create a single Accenture. We're trying to create a culture of cultures. We're trying to let people be who they are, be authentic in their leadershp style, and work in the kind of work that they're passionate about. And so, yeah we've got 41,000 people that are doing digital, but within that 41,000, we have creative people who are doing experience design in Fiori, and we've got e-commerce experts in Accuity, and we've got the new Karmarama acquisition over in London, which is our first move into the front-end of creative services, and they're different, right? The people in Accenture Analytics think differently than the people who are doing the IoT work. And so, what we're trying to do is allow people to be good at what they're passionate about, and bring to us the expertise in what's the best way to get this done in the part of the business that they're serving?

So, that's what we're trying to accomplish and we're lucky to be part of an Accenture system that allows us to freely move people to the opportunities that they're going to be most passionate about. And, as long as we do that, I'm confident we'll continue to grow successfully. 

Michael Krigsman: How do you ensure that these people are all working towards a common set of goals, a common set of objectives?

Mike Sutcliff: Well, I guess the first thing is it starts with our values as a company, right? We talk a lot about the Accenture mission to help our clients change the way the world works and lives, and improve the way they deliver their missions, and we have a very client-centric orientation, we always want to do what's in the best interests of our clients. So, we spend a lot of time with our people from the day they join the firm talking about our values and what we're trying to achieve for our clients. And, as long as they understand that and are acting on that agenda, everything else falls in place reasonably quickly.

However, we have a lot of training programs. We offer literally thousands of training courses per year for our people, and everyone at Accenture has a coach, who helps them understand what training they're going to take, how to manage their personal careers, and if they have questions, they've got somebody they can turn to, to say, "Why does it work this way, how can I work more effectively, etc." So, we kind of think of it as a team sport, we give the team some clear direction on what we value, and how we expect them to behave, and then we let them go do what they do.

Michael Krigsman: And is this the same pattern that you are observing in your most high-performing clients as well?

Mike Sutcliff: Absolutely. I absolutely think our clients are doing the same. They're recognizing the power of their people. They're open to the fact that it's not a top-down command and control, a process that gets the best out of people, so they're allowing people to bring fresh ideas and new ways of thinking to the table, and then they're willing to experiment; to learn what works, and what doesn't. So, we're spending a lot of time right now, for example, testing internal crowdsourcing and seeing what we can learn from that, and how that compares with what we do with external crowdsourcing. So, we're seeing a lot of clients who are equally interested in finding ways to open their culture and get the best out of their people.

Michael Krigsman: We have literally two minutes left. And, in that two minutes, would you summarize the essence of your distilled wisdom or experience on what makes digital transformation work, and what are the key, say, obstacles or impediments that you've observed?

Mike Sutcliff: Well I guess, what makes it work, as I said earlier, is a wide aperture in your thinking about what's possible, right? The digital technology is just a toolset to work with. The question is what are you trying to do with it? What are you trying to achieve in your core mission, and if you're willing to rethink the operating model that you've used in the past, because these need tools, change the underlying economics of how you can do what you do. We think you're set up for success.

I would tell you the things that are going to create barriers for you, is if you try to do this yourself. I mean, this is an ecosystem support, the people who are winning are open to partnering with others in the ecosystem, and they're not trying to kind of tightly control their corporate boundaries and their corporate walls. They're saying, "Hey, let's really think about being part of a supply chain and ecosystem that serves a set of customers and think about how we partner with others." And so, if we can get clients in that mindset, we think they're set up for success. The clients that we see struggling are the ones that are still kind of trying to tightly control and hold onto the way they worked in the past.

Michael Krigsman: Okay, wow. This has been a very fast 45 minutes. You've just...

Mike Sutcliff: ... Sure, ask!

Michael Krigsman: [Laughter] You have been watching Episode #212 of CXOTalk, and we've been speaking with Mike Sutcliff, who is the Group Chief Executive Officer of Accenture Digital. Mike Sutcliff, thanks again for taking your time and being with us.

Mike Sutcliff: My pleasure, Michael. Thanks for inviting me today.

Michael Krigsman: Everybody, thank you. Next week, our show is on Thursday, because we're going to avoid the inauguration. And, we'll be talking about the future of healthcare, especially focused on AI in healthcare. So, please join us next Thursday, and we'll see you then. Thanks, everybody. Bye-bye!

Published Date: Jan 13, 2017

Author: Michael Krigsman

Episode ID: 410