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3D Printing and the Product Lifecycle

  • Topic: Digital Business
  • |
  • Partner: Accenture Digital
Mary Hamilton, Managing Director, Accenture Technology Labs
Mary Hamilton
Managing Director
Accenture Technology Labs
 

New technologies around 3-D printing are creating great opportunities for manufacturers to produce parts and products on-demand. 3-D printing will reduce inventory costs while increasing production speed, especially as new materials enable 3-D printing to become even more flexible.

Transcript

3-D printing is having a significant impact on product lifecycle management. Manufacturers are looking at using 3-D printing for additive manufacturing and are now able to create unique customized products for their customers.

3-D printing allows a company to build new designs for prototyping, manufacturing, tooling, and custom products that they were not able to do in the past, given this new capability of on-demand printing.

One of the things that we’ve been exploring is looking at how 3-D printing can be used not just in creating end-consumer products, but also creating opportunities for spare parts and maintenance. We’ve created something called the Printability Index, which helps a company understand which of their products could be 3-D printed more cost effectively. That takes into account of things like the size of the product, material out of which the product is made, how often that product is used, and what the holding costs are for that inventory.

When you think about spare parts, companies are now able to evaluate whether or not 3-D printing will be more effective or not. And the same goes for manufacturing customized end consumer products. With something called “ultra-postponement,” manufacturers are now able to postpone the production of a product until a customer places the order. And then they can print these products on demand, precisely the way a customer is looking for that product.

It’s an extremely powerful concept. As the technology matures, it provides increased speed with new materials that we’re able to print in: metals, advanced plastics, even organic materials. As the accuracy of this printing improves, we’ll be able to 3-D print or additive manufacture more and more products.

Some of the challenges that we need to look out for include optimizing for this new manufacturing capability. Being able to decide between traditional manufacturing, and when you should evaluate or use 3-D printing. We’re starting to create models around that take into account the amount of demand that’s coming for the product and the cost of printing, manufacturing, and holding that product, to predict if the company can use 3-D printing.

As the advances in this area continue, we think there’s a tremendous opportunity, and we actually see this as one of the most disruptive technologies in the manufacturing or product lifecycle management areas.

3-D printing is having a significant impact on product lifecycle management. Manufacturers are looking at using 3-D printing for additive manufacturing and are now able to create unique customized products for their customers.

3-D printing allows a company to build new designs for prototyping, manufacturing, tooling, and custom products that they were not able to do in the past, given this new capability of on-demand printing.

One of the things that we’ve been exploring is looking at how 3-D printing can be used not just in creating end-consumer products, but also creating opportunities for spare parts and maintenance. We’ve created something called the Printability Index, which helps a company understand which of their products could be 3-D printed more cost effectively. That takes into account of things like the size of the product, material out of which the product is made, how often that product is used, and what the holding costs are for that inventory.

When you think about spare parts, companies are now able to evaluate whether or not 3-D printing will be more effective or not. And the same goes for manufacturing customized end consumer products. With something called “ultra-postponement,” manufacturers are now able to postpone the production of a product until a customer places the order. And then they can print these products on demand, precisely the way a customer is looking for that product.

It’s an extremely powerful concept. As the technology matures, it provides increased speed with new materials that we’re able to print in: metals, advanced plastics, even organic materials. As the accuracy of this printing improves, we’ll be able to 3-D print or additive manufacture more and more products.

Some of the challenges that we need to look out for include optimizing for this new manufacturing capability. Being able to decide between traditional manufacturing, and when you should evaluate or use 3-D printing. We’re starting to create models around that take into account the amount of demand that’s coming for the product and the cost of printing, manufacturing, and holding that product, to predict if the company can use 3-D printing.

As the advances in this area continue, we think there’s a tremendous opportunity, and we actually see this as one of the most disruptive technologies in the manufacturing or product lifecycle management areas.

How to Crowdsource Your Workforce

  • Topic: Digital Business
  • |
  • Partner: Accenture Digital
Mary Hamilton, Managing Director, Accenture Technology Labs
Mary Hamilton
Managing Director
Accenture Technology Labs
 

Workforce crowdsourcing enables companies to create a dynamic, flexible set of resources to complete project activities. Crowdsourcing is a reasonable alternative for both internal tasks and work based on external labor. Making best use of crowsourced labor requires a shift in how managers think about orchestrating this new form of labor.

Transcript

Workforce crowdsourcing means changing from a mode where a department, project, or even a company, owns a specific set of resources to sourcing a dynamic set of resources needed to get a piece of work done. We’re seeing enterprises start to embrace and explore this new capability as more and more companies offer crowdsourcing capabilities.

Crowdsourcing in the enterprise can be done in several ways. It can be done as an internal crowd. It could be done as a fully external crowd, or it could be done as a combined, curated crowd between the enterprise and external group.

We see a lot of opportunity in this technology, and we’re exploring things like using workers to do micro tasks, where they don’t have very much inflate into the overall project. But we’re also using this technology to go beyond and gain access to very specific skills and talent that we can bring to the enterprise to get larger pieces of work done.

When we think about new areas to explore, we’ve been looking at several different opportunities. We started our testing with something called job-jar, where we’re looking at small pieces of work that need to get done. And we created something called the digital talent broker. With that digital talent broker, we’ve been able to source 15,000 hours of work already in the early stage pilot of this capability. The challenge isn’t so much finding people to take on jobs; it’s finding enough jobs to put in the job-jar to meet demand and the excitement of individuals who want to pick up this additional work. That’s an all-internal opportunity at which we’ve been looking.

But we’re also looking at things like crowd testing and using crowdsourcing to take on activities like software engineering. That’s much more complex so, as you look at projects doing software development, using the crowd becomes much more challenging.

Some of those challenges are around orchestration. This new mode of working requires a new form of project manager, a new kind of program manager, who can orchestrate the full set of work across a very diverse and disparate set of workers.

When we think about crowdsourcing, companies need to consider how do you break up work? How do you find the right person to source that job? Additionally, are your legal and HR policies around this able to tackle finding, capturing, and using the crowdsource talent in the best ways for your enterprise?

Workforce crowdsourcing means changing from a mode where a department, project, or even a company, owns a specific set of resources to sourcing a dynamic set of resources needed to get a piece of work done. We’re seeing enterprises start to embrace and explore this new capability as more and more companies offer crowdsourcing capabilities.

Crowdsourcing in the enterprise can be done in several ways. It can be done as an internal crowd. It could be done as a fully external crowd, or it could be done as a combined, curated crowd between the enterprise and external group.

We see a lot of opportunity in this technology, and we’re exploring things like using workers to do micro tasks, where they don’t have very much inflate into the overall project. But we’re also using this technology to go beyond and gain access to very specific skills and talent that we can bring to the enterprise to get larger pieces of work done.

When we think about new areas to explore, we’ve been looking at several different opportunities. We started our testing with something called job-jar, where we’re looking at small pieces of work that need to get done. And we created something called the digital talent broker. With that digital talent broker, we’ve been able to source 15,000 hours of work already in the early stage pilot of this capability. The challenge isn’t so much finding people to take on jobs; it’s finding enough jobs to put in the job-jar to meet demand and the excitement of individuals who want to pick up this additional work. That’s an all-internal opportunity at which we’ve been looking.

But we’re also looking at things like crowd testing and using crowdsourcing to take on activities like software engineering. That’s much more complex so, as you look at projects doing software development, using the crowd becomes much more challenging.

Some of those challenges are around orchestration. This new mode of working requires a new form of project manager, a new kind of program manager, who can orchestrate the full set of work across a very diverse and disparate set of workers.

When we think about crowdsourcing, companies need to consider how do you break up work? How do you find the right person to source that job? Additionally, are your legal and HR policies around this able to tackle finding, capturing, and using the crowdsource talent in the best ways for your enterprise?

Virtual Reality in the Enterprise

  • Topic: Digital Business
  • |
  • Partner: Accenture Digital
Mary Hamilton, Managing Director, Accenture Technology Labs
Mary Hamilton
Managing Director
Accenture Technology Labs
Michael Krigsman, Founder, CXOTalk
Michael Krigsman
Industry Analyst
CXOTALK
 

Virtual reality in large organizations can provide significant benefits in areas such as training and over-the-shoulder coaching. Early studies have demonstrated the benefit of these new technologies in an enterprise setting. Although challenges remain, virtual reality promises to offer important capabilities in the enterprise.

Transcript

Virtual reality is a new technology that is expanding into the enterprise; we see significant take-up of virtual reality and mixed reality in large organizations.

When I talk about virtual reality, the technology that you put on as a headset, it creates an immersive 3-D environment for the end user. We’re seeing things like virtual reality and also an extension of that called mixed reality, which also uses a headset, but now you can see the real world around you, as an overlay of 3-D digital content on top of that.

These are new areas that we’re exploring in the enterprise space. Obviously, there’s a consumer aspect to it but the enterprise is a kind of new, bold area.

So what are the benefits of using this kind of technology? Because it is so immersive, studies around virtual reality indicate it provides additional benefit beyond traditional training and coaching. Let me give you an example.

Miami’s Children Hospital recently did a study where they used virtual reality to train their employees, and they saw a dramatic difference as compared with traditional training. The retention that they saw was around 20% after one week.

With virtual reality, they saw 80% retention after one year, so you can imagine the impact of this new technology in getting people to understand and internalize new concepts and use them going forward.

There’s a lot of use cases to which we can this. You’ve got the training, things like over the shoulder coaching, so you can train on the job with this new capability. So that give you a sense of the types of resources and capacities you can provide.

This technology is getting there, but there are still some challenges. So the first is user adoption and how people are interacting with this. We’re still seeing some challenges with people getting a little bit sick, some of the devices weight a little bit too much, sometimes they’re tethered.

As the technology develops, I think we’re going to see some of those challenges resolved. And then the other piece is around content development. We must have engaging content to create the immersive worlds that companies need to use this as an enterprise capability.

Virtual reality is a new technology that is expanding into the enterprise; we see significant take-up of virtual reality and mixed reality in large organizations.

When I talk about virtual reality, the technology that you put on as a headset, it creates an immersive 3-D environment for the end user. We’re seeing things like virtual reality and also an extension of that called mixed reality, which also uses a headset, but now you can see the real world around you, as an overlay of 3-D digital content on top of that.

These are new areas that we’re exploring in the enterprise space. Obviously, there’s a consumer aspect to it but the enterprise is a kind of new, bold area.

So what are the benefits of using this kind of technology? Because it is so immersive, studies around virtual reality indicate it provides additional benefit beyond traditional training and coaching. Let me give you an example.

Miami’s Children Hospital recently did a study where they used virtual reality to train their employees, and they saw a dramatic difference as compared with traditional training. The retention that they saw was around 20% after one week.

With virtual reality, they saw 80% retention after one year, so you can imagine the impact of this new technology in getting people to understand and internalize new concepts and use them going forward.

There’s a lot of use cases to which we can this. You’ve got the training, things like over the shoulder coaching, so you can train on the job with this new capability. So that give you a sense of the types of resources and capacities you can provide.

This technology is getting there, but there are still some challenges. So the first is user adoption and how people are interacting with this. We’re still seeing some challenges with people getting a little bit sick, some of the devices weight a little bit too much, sometimes they’re tethered.

As the technology develops, I think we’re going to see some of those challenges resolved. And then the other piece is around content development. We must have engaging content to create the immersive worlds that companies need to use this as an enterprise capability.

Technology, Culture, and Digital Transformation with Paul Daugherty, Chief Technology Officer, Accenture

  • Episode: 172
  • |
  • Topic: Digital Business
  • |
  • Partner: Accenture Digital
Paul Daugherty, Chief Technology Officer, Accenture
Paul Daugherty
Chief Technology Officer
Accenture

Digital transformation involves changes to an organization's business model, corporate culture, processes, and other people-focused activities. Although technology, platforms, and data can enable these changes, the focus remains on defining business goals and achieving outcomes. In this episode, we explore the relationship between technology and gaining the business outcomes associated with digital transformation.

Paul Daugherty is Accenture’s chief technology officer and leads the company’s Technology Innovation & Ecosystem group. He is also a member of Accenture’s Global Management Committee.

In addition to overseeing Accenture’s technology strategy, Mr. Daugherty has responsibility for driving innovation through R&D activities in Accenture’s Technology Labs; maximizing value from the fast-changing and dynamic technology ecosystem; and leveraging emerging technologies to bring the newest innovations to clients globally. He also leads the company’s highly skilled, certified technology architects, who apply new technologies and architectural foundations in building solutions for clients across industries. In addition, Mr. Daugherty is responsible for managing Accenture’s alliances, partnerships and senior-level relationships with leading and emerging technology companies, and runs Accenture’s CIO Council of more than 200 global CIOs.

Before being named chief technology officer in 2012, Mr. Daugherty was Accenture’s chief technology architect, leading more than 17,000 professionals globally who focused on advanced technology solutions. Previously, Mr. Daugherty founded Accenture’s cloud computing business, and led Accenture’s technology business globally for the Resources operating group. He also was instrumental in founding Accenture’s SaaS, big data and open source businesses, and played a key role in the company’s technology business during the major transitions to client/server computing and internet-based computing.

Mr. Daugherty serves as chairman of the board of Avanade, a joint venture of Accenture and Microsoft. He is also on the board of directors for Accenture Global Services Limited. He is a frequent speaker at conferences on industry and technology issues, and has published articles in a variety of publications. He serves on the board of trustees of the Computer History Museum and on the CIO Advisory Board for NPower, which provides IT services to non-profit organizations. Mr. Daugherty also helped found the Advisory Board of the Academy of Information Technology, a non-profit that works to increase IT career opportunities for urban youths.

Transcript

Michael Krigsman:

(00:02) Welcome to episode number 172 of CXOTalk. I am Michael Krigsman and today we are speaking with Paul Daugherty who is the Chief Technology Officer of Accenture. And I want to say thank you to Accenture for presenting this show. And I also want to give a special shout out to Livestream because they are our infrastructure supplier and they are fantastic. So we are going to be talking about the intersection of technology, culture, and digital transformation. Paul how are you today?

Paul Daugherty:

(00:47) I’m doing great. Thanks for having me on the show Michael.

Michael Krigsman

(00:49) Hey it’s so great for you to be here. Paul, tell us about Accenture and tell us about your role as Chief Technology Officer.

Paul Daugherty:         

(00:59) Yeah sure, you know the topics that you talk about mentioned tech culture and digital transformation, and those are just great topics for you know a lot of what we’re doing at Accenture so it’s a great lead in and a great set of topics for the day.

(01:14) So Accenture I assume most people know something about Accenture, but just to give you a real quick story. You know we’re a company of about $32 billion in annual revenue, approaching somewhere in the order of 290,000 people, moving towards 400,000 people. And our business is really about you know brining technology and innovation to businesses and to help businesses achieve their digital transformations by applying the range of services that we have. So that’s what we’re all about which is why I think this is such a great topic that you’ve teed up here Michael.

(01:47) My role at the company is part of our global management committee, working for our CEO Pierre Nanterme. You know asking Pierre what my objectives are it’s really to look at where we’re positioning Accenture and where we’re taking it a few years from now to make sure that what we’re doing, and the services we provide are as relevant and even more relevant with tomorrow’s technologies that they are what todays.

(02:14) So to accomplish that as CTO I’ve a range of responsibilities starting with our research and development our Accenture technology labs, and areas like our Strategic Minority Investment Program, where we invest in some of the smaller companies that we believe our future leaders.

(02:31) I’m also responsible for overall technology, alliances, and partnerships with all the companies that you would expect us to be partnering with, and the traditional leading industry leaders we work with as well as the new emerging companies.

(02:45) And also responsible for emerging technology businesses and the smaller  businesses that are incubating around new technologies, such as wearable technology, virtual technology and things like that, so that’s what I’m up to.

Michael Krigsman:

(03:01) So Paul, Accenture is a $31 billion company. You’re growing at 10% a year. you are a professional services company and yet technology is a core part of what you’re doing including advanced technology. So maybe tell us about that intersection.

Paul Daugherty:

(03:23) Yeah I mean the way I think about Accenture is Accenture really exists at the intersection of technology in business, and I think the DNA of our company is around as you know think of it as that double helix twisting together getting the technology and business impact, and bringing business relevant technology innovation to our clients. So that’s really what we’re all about.

(03:47) So technology really runs through our whole business. So if you look at the five businesses of Accenture, we start with Accenture Strategy and our focus on strategy it’s around the intersection of strategy in technology in businesses is what we focus on in strategy.

(04:06) We have a consulting business that’s very focused on management and technology, consulting and applying these sort of transformation into our businesses with

Michael Krigsman:

(00:02) Welcome to episode number 172 of CXOTalk. I am Michael Krigsman and today we are speaking with Paul Daugherty who is the Chief Technology Officer of Accenture. And I want to say thank you to Accenture for presenting this show. And I also want to give a special shout out to Livestream because they are our infrastructure supplier and they are fantastic. So we are going to be talking about the intersection of technology, culture, and digital transformation. Paul how are you today?

Paul Daugherty:

(00:47) I’m doing great. Thanks for having me on the show Michael.

Michael Krigsman

(00:49) Hey it’s so great for you to be here. Paul, tell us about Accenture and tell us about your role as Chief Technology Officer.

Paul Daugherty:         

(00:59) Yeah sure, you know the topics that you talk about mentioned tech culture and digital transformation, and those are just great topics for you know a lot of what we’re doing at Accenture so it’s a great lead in and a great set of topics for the day.

(01:14) So Accenture I assume most people know something about Accenture, but just to give you a real quick story. You know we’re a company of about $32 billion in annual revenue, approaching somewhere in the order of 290,000 people, moving towards 400,000 people. And our business is really about you know brining technology and innovation to businesses and to help businesses achieve their digital transformations by applying the range of services that we have. So that’s what we’re all about which is why I think this is such a great topic that you’ve teed up here Michael.

(01:47) My role at the company is part of our global management committee, working for our CEO Pierre Nanterme. You know asking Pierre what my objectives are it’s really to look at where we’re positioning Accenture and where we’re taking it a few years from now to make sure that what we’re doing, and the services we provide are as relevant and even more relevant with tomorrow’s technologies that they are what todays.

(02:14) So to accomplish that as CTO I’ve a range of responsibilities starting with our research and development our Accenture technology labs, and areas like our Strategic Minority Investment Program, where we invest in some of the smaller companies that we believe our future leaders.

(02:31) I’m also responsible for overall technology, alliances, and partnerships with all the companies that you would expect us to be partnering with, and the traditional leading industry leaders we work with as well as the new emerging companies.

(02:45) And also responsible for emerging technology businesses and the smaller  businesses that are incubating around new technologies, such as wearable technology, virtual technology and things like that, so that’s what I’m up to.

Michael Krigsman:

(03:01) So Paul, Accenture is a $31 billion company. You’re growing at 10% a year. you are a professional services company and yet technology is a core part of what you’re doing including advanced technology. So maybe tell us about that intersection.

Paul Daugherty:

(03:23) Yeah I mean the way I think about Accenture is Accenture really exists at the intersection of technology in business, and I think the DNA of our company is around as you know think of it as that double helix twisting together getting the technology and business impact, and bringing business relevant technology innovation to our clients. So that’s really what we’re all about.

(03:47) So technology really runs through our whole business. So if you look at the five businesses of Accenture, we start with Accenture Strategy and our focus on strategy it’s around the intersection of strategy in technology in businesses is what we focus on in strategy.

(04:06) We have a consulting business that’s very focused on management and technology, consulting and applying these sort of transformation into our businesses with an industry context.

(04:17) We have Accenture digital, which is all about the digital set of technologies that’s transforming business. Accenture Technology itself which is the delivery of the new technologies but also the technologies deployed to customers. And we have Accenture Operations, where we have the full stack of operations capability from infrastructure to business processing in our technologies again qualifying technology.

(04:38) So technology is the common thread that runs through our whole business. And at Accenture, being a leader in technology and being ahead in technology is what allows us to stay ahead and growing market share and growing our business as you described. 

Michael Krigsman

(04:51) Now digital transformation is of course an important part of what you’re engaged with clients, but at the same time Accenture is part of this digital transformation environment itself; you’re subject as to what’s going on in the world. So when you think about digital transformation as applied to your own company to Accenture, what are some of the implications and how do you think about that?

Paul Daugherty:

(05:22) Yeah that’s something that we think about a lot because we’re in the era of digital transformation that’s the defining change that’s happening in business right now and you see it in every industry in every part of the world.

(05:38) and we recognised this several years ago. In 2013 we came out with a technology vision that talked about the fact that every business is a digital business. And at that time I would be provocative. I’d got to a lot of clients saying, ‘Nah you know we’re not a digital business. We manufacture and we do whatever we do but it was provocative at the time.

(05:56)  But it became an accepted idea and we saw that coming and starting back then we started making some changes in our business so we created Accenture Digital that I talked about a minute ago. We created a different sort of strategy practice fusing together the digital strategy and the technology with it and made a number of changes in our business to position ourselves for the digital transformation. And that’s why if you look at our results, the public results that we talk about we recently talked about our business and talked about rotation and the new rotation to digital cloud and cyber and the new technologies. And we announced that 40% of our revenue, so 40% of our business is in that new set of technologies. And that part of the business is growing, you know well over 20% a year.

(06:46) And so if you look at that what you see happening is you know that fact that we’ve been early in making these transformations that are in businesses has allowed us to do well in the market, gained some market share, and bring the right relevant services to our clients as they are in this era of needing a lot of help to make sure we’re providing the services.

(07:04) And you know that’s what we’re all about and really this idea of digital transformation and continuing to drive the transformation of our own business in being the leader in driving transformation for our clients is really what we think about all the time.

Michael Krigsman:

(07:21) So your business has been changing through the adoption of enabling technologies as well as I’m assuming change to processes, changes to how you relate to your clients. Can you describe the intersection again as the technology as an enabler and the implications for the business and how Accenture people work and how you’re organized and so forth. 

Paul Daugherty:

(7:53) Yeah like you said, the technology is an enabler catalyst, and we are in this period of amazing technology change. You know, it’s a type of exponential change in growth, which is hard for a lot of us to even comprehend, and we are at the early stages of this. So for all the amazing innovations and gadgets, and big innovations that we see every day and every week, it’s the early days. And we’re over the next five and 10 years see an amazing array of new innovation and things that are going to transform the landscape for companies.

(08:26) But the challenge is, and one of the things we talked about in our vision is there is already too much innovation available for companies, and you have far more technology out there, and also they have the ability to digestion and deploy the technology. So we talk about this idea of a digital culture shock, where we see many companies stuck in saying stuck between their legacies, stuck with some cultural changes, and stuck with uncertainty around how to innovate.

(0:56) And that’s what we’re trying to address is how do we unlock this digital culture shock, and really help clients with the technology adoption capabilities that they can take advantage of innovation that’s there. And that’s where the broader set of services that Accenture has that come into play. So we have the strategy group that work with our clients on understanding digital in what’s happening. And if you are in the industrial equipment business, should you decide to become a two sided B2B platform and change your business model, move away from a product orientated business model to a platform-based services model. That’s big questions like that which will shape the future of the companies and shape the winners and the losers of the future, and that’s in strategy.

(09:36) Consulting is what is set around process transformation. There’s an opportunity in front of us now and in front of every company that we haven’t seen since the 90s to really reshape and re-engineer the way the company does business based on the availability of data, machine learning, and machine intelligence etc. wrapped into business processes.

(09:57) And the availability for us employing consulting people who understand different industries and business processes and that can lead that change, and come equipped with the datasets and tools, and the data science to do it is really what is part of that business.

(10:11) In our technology business employing solutions using agile, new techniques, dev ops and continuous integration, delivering in new ways that we call liquid IT. In addition to you know the traditional delivery that’s important for many types of problems that our clients have. And then operations, you know, operating businesses under continual basis for clients, and with digital services kind of wrapping around all of that, so that is a little bit more on how the business works and addressing your question.

Michael Krigsman

(10:39) Paul we have a question from Bilal Zaidi and I hope I’ve pronounced your name correctly and if I haven’t Bilal I apologize. And Bilal says, while many companies know that they need to change but they’re unsure of what to do. So can you offer advice on companies who recognize these changes but they’re just not sure what to do next.

Paul Daugherty:

(11:05) Yeah that’s a great question and a great point. And to prove to the answer and to back up Bilal’s point we did a survey last year with the World Economic Forum, along with some work that we were doing for the forum in digital transformation. And the survey came out with results that said 87%, which is roughly 9/10 executives believed that the digital technologies that were coming would disrupt their company within five years. So 9/10 were saying this was going to disrupt their company’s within five years, a striking you know high number.

(11:42) Only 7%, which is less than one in 10 said they had the road map and understood what to do, and that is just a striking dichotomy that we see of people understanding the nature of the change of disruption. But being uncertain about the road maps, I think that data lies at the heart of the question there.

(11:58) And I think we are in an era where a lot of companies are searching for the answers. I think one thing that certainly is not the right thing to do now is the old school way of looking at a long term strategy forecast and spending a year developing your five-year strategy. I mean those days are gone and what we believe the right approach is, is more of an agile approach to strategy as well and it doesn’t just apply to the system development. So understanding how to you know get a more nimble organization and culture in place, how to get more early experimentation in place, develop the kind of guidelines in what you need to do, and then fail fast using the Internet mantra.

(12:41) An old line that we use for years which still applies, and it applies even more. I think today is this idea of think big about the possibilities, and understand where you might take your business. Think about in my example earlier the B2B business platforms, and big ideas and start small to experiment and get the experience. And be ready to scale fast where you have the success. So think big, start small, scale fast is more relevant today than it ever has been.

Michael Krigsman:

(13:08) I spoke today, this morning with the CIO of a major bank in Europe and we were talking about this issue, and he made the comment that there’s no longer this issue of the appetite of these long multi-year transformation a let’s plan out a three year transformation project. But they’ve adopted as you were saying an agile approach now where everybody involved is a developer and it shifts IT from the mindset of defaulting to know to actually helping contribute to solve problems.

Paul Daugherty:

(13:47) Yeah I think that’s a great attitude to take and I think the CIOs who are leading this change I think are taking that type of view. I think it’s a tremendously challenging time to be a CIO or a technology leader in a company because things are changing so fast. And if you’re the CIO you’re responsible for keeping the business going, keeping the lights running, as well as developing new innovation for the business.

(14:13) And I think those CIOs that are taking on that kind of mindset and look at how do they become the coach to the rest of the organization in understanding the changes in technology, educating the business and being at the forefront of the change are the CIOs who are doing very well in this generation of technology change.

(14:31) I think the CIOs in organizations that are struggling are the ones that are a little bit more in support mode and a little bit stuck. And it’s not that one’s good and one’s bad, it’s just that in this environment, the business is going to move that fast, and the demand for speed is so great. As a CIO the technology I think you have to be in front and be part of the change, rather than you know, waiting for the change to hit you. So taking that kind of approach that you described with the CIO is it is a pattern that we see, and it’s something that I see with our CIO, Andrew Wilson, I know you have talked about and talk to on your show before.

(15:14) A great example of Andrew you know in our business taking a very proactive view in developing a vision, and developing the best digital workplace to support Accenture, and then figuring out how to get the rest of the organization there and that type of mindset I think is really important.

Michael Krigsman

(15:28) Paul on this subject sometimes one hears CIOs and IT in a sense suffering under digital transformation and the risk of IT becoming essentially a almost a commodity supplier of infrastructure services. And yet on the other side there’s this tremendous opportunity and set of possibilities for CIOs, innovative CIOs, digital CIOs, and so you were talking about this but can you elaborate on advice that you have for CIOs in order to take advantage of digital transformation and embody the qualities that you were just describing. What can they do, what should they do?

Paul Daugherty:

(16:13) Yeah it’s a number of things. I think the first thing is around getting on the front foot with it and the CIO actively participating in the dialog the business change and where the business is going and how the technology enables the business change. That varies a lot on companies. In some companies the CIO is in essence the Chief Digital Officer as well and he’s the one the organization goes to for that kind of technology insight. And many other organizations there might be a Chief Digital Officer or somebody else tasked with that kind of role.

(16:49) But regardless the nature of the organization and the degree of responsibility for technology and digital technology I think the CIO needs to make sure they have a seat at the table and are carving out that seat at the table to be part of the change and shaping what’s happening, so that’s the first part of it.

(17:08) The second part of it is what you hinted at with your earlier question with the CIO that you talked to which is making sure as a CIO you’re adapting, you’re developing different speeds in the organization. People talk about two speed It or multi-speed IT or whatever it might be, and I’m not a big fan of just the two speed concept.

(17:26) I think this idea of having a very fast, nimble capability in IT to move at the pace of business is really critical, so that IT can be seen as the enabler and the change agent in that think big, start small kind of program, in addition to scaling fast which is what IT has always been good about. So I think that developing that different kind of approach and mindset and different skillset around new technologies are important.

(17:52) And that then leaves culture and talent issue for a lot of IT organizations, is that if you look at what you have got in the organization across your in-house organization, and the partners that you work with. Do you have the talent in terms of the insight in the strategic thinking, the skills and the right technologies and the knowledges of the cloud architecture and data architecture etc., to take the organisation where you need to. And most organizations are recognizing that they need to go through a talent change as well as the culture change to make sure that IT is operating in this new mindset.

(18:27) And the fourth thing I would highlight is the need to really think about new architecture, because the new world needs to look a lot different than today’s world. So thinking about how you evolve the current architecture. Nobody has got a clean slate and green field, but how do you take the current architecture that you have, and add the APIs and the new approaches to increase and improve the access to the likes of technology. To improve the access to all of your technology to other stakeholders, and think about the right way to embed agile architecture and new types of techniques into the technology that you’re deploying. So those are just some of the things I would highlight Michael.

Michael Krigsman:

(19:03) We’re talking with Paul Daugherty, who is the Chief Technology Officer of Accenture, and if you have questions for Paul right now there’s a Tweet chat going on using hashtag cxotalk, so Tweet your questions in and we’ll see whether we can get Paul Daugherty to answer them. Paul, you were just talking about culture and it seems this is a very important piece, and yet you’re the Chief Technology Officer, and so historically we spoke about technology and there was no discussion of culture. Why is culture so important in this mix today?

Paul Daugherty:

(19:43) I’m just going to tweet myself a question, but that’s a good one. It’s important because most organizations, Accenture included need to shift their culture a bit because of the pace of change that’s coming from a technology perspective.

(20:05) As I said earlier with strategy. The days of top down, multi-year strategy are gone in the same way you know, the era of very ridged fixed organization structures are gone and people need to work differently. The pace of change in innovation is always going to increase, so a leader at the center of the corporation, the leaderships ability to drive the change in the organization just isn’t going to work. Many companies aren’t going to be able to win if that’s what they’re trying to do.

(20:33) So understanding how the culture of the company changes to become more innovative and more adaptive as it goes is really essential. That is something that we are really focused on at Accenture were talking a lot in our company is an innovation led culture. You know, again our purpose is we’ve defined it is to be the leader in bringing innovation into business. And to do that what we need is an innovative culture, and innovative people at every point in our organization and we’re focused on that. And I think that’s not just our company. That’s true of many companies and I would argue that most companies in the digital era, because the pace of change is going to be so extreme you need an organization that can adapt quickly. And that can except change as a new normal rather than something you just do once in a while, and embraces and recognizes innovation and understands how to bring that into the business.

(21:24) There is a line that I love and I’ve read a number of times over the years that says, ‘Culture eats strategy for breakfast’, and I believe that’s really true. In an era where strategy is extremely important and people need to point their companies in a new direction. But the thing that is really going to get you to that strategy is having that culture that is aligned, where the people’s purpose fits your organisation purpose, and you’re moving the same direction.

Michael Krigsman

(21:50) Okay, so we’ve spoken about technology, we’ve spoken about culture and change. now will you layer on top of the the role of business model change and business models in digital transformation.

Paul Daugherty:

(22:08) Yeah you know this is something that’s evolving very rapidly, but I think the reality is the business models are changing very rapidly in lots of different ways. So I talked to you earlier about platforms and the idea of platforms, and we believe the move towards digital platforms is really a profound shift in the way that business will work in many industries, and we’ve seen that happen already.

(22:36) So the platforms started with you know, Amazon with e-commerce platform, iTunes with the music platform etc. But if you look at the analyst forecasts and if we look at what is happening in the industry we expect dozens if not hundreds of different industries platforms to develop. So that’s things like GEs Predix platform that they are using with their technology, but it’s the businesses and the new way they are approaching healthcare around those businesses which we had an announcement yesterday in something we are doing together in healthcare.

(23:09) If you look at what Phillips is doing with HealthSuite, they have platform for connecting patient, providers, and physicians. If you look at many other cases like that you see the emergence of platforms which are changing the business models. For GE back to them as an example, you can listen to Jeff Immelt and Bill Ruh, you know the GE digital leadership that’s about changing from product to a services model where the services are able to deliver to a platform. And what’s important about the platform is that it allows you to deliver services from an ecosystem of partners to deliver greater value to your customers. And that kind of change is what’s really going define the future of many industries where you see that happening already and lodging Airbnb and things like that moving many many industries.

(23:57) So platforms are a key part of the change. I think the other thing that will affect change with business models is some of the changes that technology brings into the way that you think about your own business. You know, and some of this gets into stretching the boundaries on your thinking, but if you look at what’s going to happen to the insurance business as you have more autonomous vehicles. As an example the CEO of Volvo came out recently and said when they introduce their self-driving cars in several years, there autonomous vehicles they’re going to self-ensure as a way to get their purchases, and passengers for the self-driving cars more comfortable. So what happens to the insurance in that type of world?

(24:37) There is many many other impacts where you know, the boundaries between the industries blur and shift a little and causes you to rethink where your focus is. And how you need to compete and we see that happening in many many cases.

Michael Krigsman

(24:50) We have an interesting question from Steve Massi on Twitter, and Steve is saying innovation and culture without the right type of underlying vision can lead to chaos. And so how can companies ensure that as these changes are taking place that they’re focused, that they’re coordinated, that they’re going in the right direction.

Paul Daugherty:

(25:16) I completely agree and you can’t have undirected innovation and you know very distributed culture can lead to you know it’s like an explosion with a lot of collateral damage and a lot of chaos as Steve says.

(25:32) So I think that’s a good point and that’s why all this starts with a vision. You know a company needs to have a sense of where it’s going. I’ve told you what our vision is which is different from what it was several years ago, but it is the vision that we have and it’s been successful in the market as we see it evolving. So I think it starts with that clear vision as the organization can get aligned. But then the change to the organisation, the culture, and creating more of an innovation it’s going to be very important for most companies in dealing with that new vision that they’re setting. So it’s a good question and absolutely right, you need the driving vision to align things but then you need more flexible mechanisms to help develop it.

Michael Krigsman

(26:19) So you mentioned innovation and you’ve spoken about innovation as one of the important pillars at Accenture, so how do you innovate, and also what is your relationship to startups and to smaller organizations who may be developing interesting new technologies.

Paul Daugherty:

(26:38) That’s a very rich question there and so I will give you a few perspectives and not make it too long. You know the way I think about it, so if you think about our business. As I said earlier 30 billion in revenue, and we are approaching 400,000 people and 40% of our business is in digital technology. So those sound like interesting numbers, but if you look at the other side of that what does that mean every year. That means every year we have to add 3 billion of revenue, profitable revenue. We don’t have the luxury of what some start-ups that can generate growth on profit.

(27:15) So in essence we have to add 100,000 people every year and that is what we hire every year with new skills that generate profitable growth equivalent to 3 unicorns of revenue. In technology generally that didn’t exist four or five years ago, that’s defined by the rotation to the news. So it’s the need for innovation in our business and create a few unicorns a year, and as it all in a profitable way to our business and simply transition and continue to grow our workforce.

(27:41) So that’s the way we see the business, and to make that happen. We need to have a lot of innovation mechanisms in our business. And it’s also changing our view, and I would argue, 10 years ago it was fine to be a fast follower in technology, because the cycles moved slower. If you are a little late at client server technology or the gold ERP wave you can still catch up a few years late and still catch the meet of the curve. You know the meet of the transition.

(28:09) The technology moves so fast today that if you are not at the forefront with the important technologies you’ll miss the key part of the positioning and growth, and in our industry you certainly will. As an example block chain, two years ago wouldn’t have been singled out by many people as an important technology for us to focus on. In just two years it’s been important for us to have a block chain practice. We’ve invested in a couple of block chain startups, so we work with them more closely to drive the change. And we’ve got block chain R&D going on and we have got block chain work going on with clients across different industry groups. Not just in financial services, but in many different areas of financial services. That’s just in a couple of years, and that’s the type of speed in which the technology is moving. And it’s moving that fast; artificial intelligence with many many other technologies.

(28:58) So back to your question, how do we make that work. So we have something we call our innovation path, which is how we make innovation work. It starts with research. We have Accenture research which generates thought leadership and provocative points of view on such on trends, the game changing trends like our technology vision. That’s Accenture Research.

(29:18) Then we have Accenture Labs, which is a major R&D investment in seven labs that we have around the world with researchers and Ph.D.’s, who are driving hands-on applied research with those trends in those technologies. We have the hands-on experience to drive those as they take off.

(29:33) And then we have Accenture Ventures, which is where we invest and we reach out and work with start-ups, VCs and entrepreneurs to build that innovation through an open innovation approach that we run. Then we take investments in companies where we believe we can create a kind of a special relationship and create a good way to grow their business and our business, you know, together going forward.

(29:56) And then we have something we call Accenture Studios, which is where we bring our clients to ideate and co-innovate together in an environment that combines everything from designs thinking, to experiential hands-on technology, to new development techniques like extreme programming and agile development as such that you can quickly ideate and build solutions. Then that skill gets into our global delivery network and all of the businesses of Accenture. So we are investing increasingly in that, and if you look at our business we’re again 30 billion in revenue, and we invest about 3 billion a year in improving our capability, about 10% of our revenue. It’s about a billion in internal investment and about a billion in acquisitions and about a billion in people in training. And that for a company of our size in our industry that is a lot of investment to make, but we believe that’s what’s required to keep moving the organisation at pace.

(30:52) And I can come back around to this, but to round out one point that I mentioned acquisitions. We have acquired over 40 companies in the last 36 months, and bringing in that new capability to accelerate this kind of rotation is a key part of the strategy as well.

Michael Krigsman

(31:05) From an innovation standpoint one thing that I find that is quite interesting at Accenture, recently I spoke with Mary Hambleton who works at Accenture Labs and she was talking about things such as virtual reality, augmented reality, 3-D printing, workforce crowdsourcing, a whole bunch of new technologies and new ideas. But as she was talking about it wasn’t just abstract, pie-in-the-sky. It was always connected to very specific use cases with enterprise ROI. So when you’re thinking about innovation and the connection to RIO use cases maybe talk a little bit about that.

Paul Daugherty:

(31:53) Yeah, that’s fantastic and that’s what gets us really excited. Yo can get anybody excited at Accenture when you talk about the accommodation of innovation and business value. That’s exactly the way which we look at it. Even start on that innovation path, even starting at the research stage we’re looking at what’s the potential.

(32:08) So when we started working with drones a number of years ago, it was what was the applications, and we started working with oil and gas companies around pipelines inspections using drones. We just deployed an application using drones for a very very large agricultural producer in Asia to use drones to dramatically improve their agricultural productivity etc.

(32:31) So we’re looking for those combinations of the technology and the use case, with virtual reality as a great example. One of the really exciting things that we did their last year was work with a manufacturer to apply, augmented reality in the manufacturing setting. So an assembly worker using augmented reality, with laser guided precision and the machine intelligence and the machine learning built into the software could operate at a far more skilled level using augmented technology and make that person a better worker, a safer worker, a more productive worker and better quality products. A win win win for the worker, you know and for the company.

(33:10) And those kind of scenarios get as excited and you know it goes across many domains. We do a lot of work now in artificial intelligence, which we believe is going to be you know define the next big wave of innovation around digital and what’s happening. And artificial intelligence, we believe is going to have a massive impact, and it’s one of the biggest impacts that we’ve seen and how we work among all the technologies today.

(33:36) And that’s why we’re working with technologies like IPsoft at Amelia that we announced a relationship earlier this week, and we announced the creation of Amelia practice to take the deep learning, you know cognitive learning agent Amelia and apply it into the business scenarios. So one of the things we did this week at the Sapphire conference, I think you might have been Michael is we demoed Amelia using SAP and learning how to use SAP to perform business processes and transactions in a very compelling way. Thereby the off loader augments work that people were doing, so that’s an example of a time directed value there. So we’re obsessed with this idea of looking at the technology and then saying okay, how can we generate some procurement with that technology.

Michael Krigsman

(34:25) So obviously you’re not focused on pure R&D. your focus is on the application of new technologies to business in order to provide some specific measurable concrete value to that business.

Paul Daugherty:

(34:41) I’d say that’s true, but one of the directions we’re pushing is we’re pushing and stretching out at the boundaries of our R&D a little further, and the line is blurring between you know pure research and applied research. The example I gave you, is we are doing work in quantum computing right now. We are not doing quantum computing hardware, but we are very interested in quantum computing software. And we submitted our first ever quantum computing problems to be solved recently, and why would we do that. If we looked at that a few years ago we would say why would Accenture be doing that.

(35:15) The reason is that we believe that there is a high probability that there’s a narrow range of problems that will be solved in a very compelling way in a very short term using quantum computing, and thereby we want to be a leader in bringing that technology to our clients. So we need to get a little earlier on the innovation and research then we normally would.

(35:35) So your point is generally true, although with the pace of which technology is moving every technology coming into this is quicker. And we need to push a little bit more into research, and the phrase I use is the latency between innovation and market impact is shrinking like it’s never shrunk before. And that means that if you don’t have the ability to sense and pick up on these early stages of innovations. As I said earlier, you will be a fast follower isn’t good enough in many cases and you may miss the opportunity.

Michael Krigsman

(36:04) So what what does this mean for managers of established companies, and sometimes we hear the phrase ‘legacy companies’ it’s not a very nice phrase. What does this mean for established businesses who are running an existing business and have an existing model, and yet it’s not enough to be a fast follower. What are the implications for them?

Paul Daugherty:

(36:30) Yeah, that’s something we spend a lot of time on and it’s a hard question, it’s a really tough question because people have got a business to run and if you are a public company quarterly earnings, and you need to move the business along as you invent the new business. So there are a lot of pressures along the way.

(36:49) I was with the top leadership of a fortune 100 company this week talking about this very issue and the kind of dialogue we had is and the way we need to think about it which is what are the assets that you have. I mean every company has got great assets, and I wouldn’t call them legacy companies you know they are the incumbent leading companies of today. And the question is what assets are going to hold you back and may become the anchor, and what assets are going to be assets that you leverage into the new world.

(37:18) And we look at our technology vision and the things that we talk about that are important in digital world. We talk about things like these platform economies which involve building these complex ecosystems. If you look at the idea of digital trust which is the trust that you have with your customers. If you look at this idea of intelligent automation and really understanding deeply understanding how business processes and people work, and how information flows.

(37:42) A lot of the incumbent companies are very good at a lot of those things in addition to having scale, supply chains, value chains, customer relationships etc. and I think the art of it is, how do you take the right assets that you have and look at how to repurposed those for the digital context moving forward and creating that future. And not do it too fast, if you do that too fast, you kill the old business and lose the ability to invest in the new. If you do it too slow you get overtaken. So I think that issue of balance and pace is right. And don’t necessarily look at changing the whole business, it’s what are the key things that you need to get right to be successful in transitioning the business.

Michael Krigsman

(38:21) We hear a lot about startups like Uber and Airbnb, although I wonder if at some point when a startup is valued at so many billions of dollars is it no longer a startup and it’s a global company.

Paul Daugherty:

(38:35) When you’re valued at 80 billion then…

Michael Krigsman

(38:40) So we hear that these companies that are the ones to emulate, but for established companies as you said with scale, as with very successful products with supply chains and so forth, you can’t just magically just turn a switch and become an Uber.

Paul Daugherty:

(38:58) No you can’t and I think the open estate that companies make is trying to be an Uber. I’m a big believer in Sun Tzu Art of War, which is don’t take your enemy on the frontline, figure it out how you attack from a different angle and do something different. And I think too many discussions where we get called in by the senior leadership in the organizations and say tell me how I can be the next Amazon or whatever or the next Uber or the next Airbnb or the next Google and the problem is the questions wrong. You might want to emulate their success. You might want to emulate their speed. You might want to emulate their culture. But what’s the right strategy for your organisation that will be successful in an environment where you have companies like that and more unicorns coming all the time that will help be moresuccessful and looked at it in that way.

(39:48) So again, it comes back to is that you need the attributes of these leading digital companies, and I think every organisation does need to develop those attributes, because that will be a pre-requisite to success. But it’s not emulating their strategy. It’s coming up with a strategy that fits the market position and the assets that the other companies are bringing to the table.

Michael Krigsman

(40:11) So having a clear sense of what their own strength, their own assets are but that also implies they have a clear sense of their own trajectory, and isn’t that the hard part going into the future knowing what to do.

Paul Daugherty:

(40:26) Yeah I think it’s no easy cook book to be able to answer it, but you also have to look at what’s going to be good and differentiating value and going forward, and what’s going to go away and not be differentiating you know if you believe block chain is going to be an architecture which you know kind of transforms the way a lot of transactions work and eliminates intermediary organizations in a lot of cases which I believe it will. Then if you depend on a party of business on that make sure the business model that you either embrace it and become a leader and deploying the block chain to enable architecture, or you move away from that and identify a different way to provide value in the marketplace. So I think it’s all about looking at you know what you can’t do or don’t want to do and what’s threatened and what you can do and navigate the course as best as you can and again revisiting it continuously because the environments changing fast.

Michael Krigsman

(41:24)Paul we only have a few minutes left, but we haven’t spoken much about changes in talent and workforce capabilities and what are the implications on workforce when digital transformation starts to take hold inside a company.

Paul Daugherty:

(41:44) Yeah, that’s a massive topic and I think it’s really interesting and it’s something we think about a lot in the number of employees we have. We really believe and convinced that this liquid workforce is the right way to build a workforce in the future. And the liquid workforce looks much different than today’s workforce in many ways.

(42:06) You know one of the things we did recently that attracted a lot of attention was our CEO and our Chief Human Resource Officer Ellen Schuck announced the elimination of the annual performance reviews in the traditional fashion and moved to something called performance achievement because we believe that people need to be coached and managed to be successful in a very different way in a digital economy than they were in the industrial economy. And sort of moving away from the old way in doing things to a new way of doing things that I think is critical, so that’s one example.

(42:33) I think the constitution of the workforce is different. The surveys would tell you that in the US up to 50% of the workforce will be contingently contract labor within a few years. What that means is that the expertise you want may not work for your employees and they may not work for you as employees. So understanding how to use models like crowdsourcing or crowd talent models may be critical to you. I would argue for most companies there going to be something you do where you’re going to need that different crowd, you know capability going forward.

(43:06) For us we look at that in many ways. We look at processes like testing; you know the testing business where you test big systems for clients. That’s going to be automated, that’s going to be crowdsourced. That’s going to look very differently in a very short period of time, which is why we’re doing a lot of work around crowdsourced innovation and how we leveraged that and built that within our business.  So there’s different ways of managing employees. Different mechanisms like to take advantage like how do you get skills to take it to marketplace like cloud and crowd models are critical

(43:34) The other thing I think is key with the millennial and Gen-Z populations that are coming in develop very rapidly is providing a digital workplace allows them to excel. What I hear time and time again from employees at a lot of companies is that the employees come in and they’re frustrated that their technology at work is so awful compared to the technology they use in their personal lives.

(43:57) And we need to close that gap as technology leaders to make sure that people have the best technology to enable. And for the digital generation coming into the workplace we are allowing them to be as effective as possible. And those organizations that have their infrastructure of the digital workplace has to happen or I can’t imagine in going forward.

Michael Krigsman:

(44:18) Well I’ve just been informed that CXOTalk is trending number 46 in the US. So thank you to everybody for watching and we have just a minute or two left. So Paul Daugherty you’re the CTO of Accenture, one of the largest professional services companies in the world, one of the largest companies in the world. When you think about digital transformation, what advice, what is the distilled essence of your advice that you can boil down to offer people who are listening, who are facing this very difficult challenging transition environment.

Paul Daugherty:

(45:02) That’s three things I boil it down to and the first is learn. If you’re not learning everyday you’re going to find yourself in a tough spot. So individual that as leaders we need to learn every day. I wake up every morning and the first thing I look at is what happened last night, what happened overnight, what new tech innovations and new announcements that is happening because it’s moving that fast and we need to figure out how to continually reinvent ourselves so learning is the first thing.

(45:32) Second thing is you know imagination; we’ve got to think differently. Just because something didn’t work yesterday doesn’t mean it won’t work tomorrow because we’ll have new ways of doing things. Imagination becomes more important as an attribute to individuals in organizations.

(45:49) And the third thing I would say is a phase I’ve been using I heard a little while ago I like is ‘Hack the future’. If we could all hack the future and bring the future to the present in very different ways, the technology is very accessible; you can go out there and be hands on. Anybody can go out there and be an amazon (unclear 46:06) or innovate using technology and understanding how do you hack the future and bring the future to the present is within our grasp and it’s something we all need to think about.

Michael Krigsman:

(46:19) Okay, well thank you so much, we have been talking with Paul Daugherty, who is the Chief Technology Officer of Accenture and you have been watching episode number 172 of CXOTalk. Paul Daugherty thank you so much for taking the time today.

Paul Daugherty:

(46:37) It was a pleasure, thanks Michael.

Michael Krigsman:

(46:38) And everybody next week is Memorial Day in the US so we won’t be here, but we’ll be back the following week and please join us again and thanks so much, bye bye everybody.

 

Companies mentioned on today’s show:

Accenture                                www.accenture.com

Airbnb                                     www.airbnb.com

Amazon                                   www.amazon.com

CXOTalk Twitter chat              https://twitter.com/hashtag/CXOTalk

GE                                            www.ge.com

IPsoft/ Amelia                         www.ipsoft.com/amelia/

iTunes                                      www.itunes.com

Livestream                              www.livestream.com

Twitter                                    www.twitter.com

Uber                                        www.uber.com

 

Paul Daugherty:

Twitter                        https://twitter.com/pauldaugh

LinkedIn                       https://www.linkedin.com/in/paul-daugherty-22101414

Bridgemakers: Guiding Enterprise Disruption through Open Innovation

  • Partner: Accenture Digital
Jitendra Kavathekar, Managing Director - Open Innovation, Accenture
Jitendra Kavathekar
Managing Director - Open Innovation
Accenture

Accenture DigitalThank you to Accenture Digital for underwriting CXOTALK.

Enterprises today are embracing new ways of doing business to reimagine and reinvent themselves in an increasingly technology-driven world. They are becoming “digital businesses,” using new technology to provide customers with better products and services, more relevant information, and personalized and seamless experiences. They are also developing new technology and leveraging the advancements of others to disrupt existing markets and penetrate new ones.

This trend toward digitalization has raised customer expectations across every industry, with enterprises increasingly influenced by and interconnected with innovations outside their traditional industry. Companies are seeking many different partners to create innovative solutions and together position themselves at the forefront of this new market. In other words, they are participating in Open Innovation. Open Innovation is a model in which organizations utilize external technology, solutions, knowledge capital and resources early in their innovation processes. In many cases, organizations will partner with a range of players in a global ecosystem to jointly develop new platforms and applications, enhance core offerings, or expand into new markets. This concept allows enterprises to look beyond their four walls to bring in ideas more quickly and frequently in order to enhance their operations—and also save time and money. Rather than using their own budget in research and development, enterprises can leverage the investments of venture capitalists and integrate a technology solution in an accelerated time frame.

To download this paper, click the PDF icon:

Accenture Open Innovation

The Era of Living Services

  • Partner: Accenture Digital
Mark Curtis, Chief Client Officer and Co-Founder Fjord, Accenture
Mark Curtis
Fjord, Design and Innovation
Accenture Interactive

Accenture DigitalThank you to Accenture Digital for underwriting CXOTALK.

What are Living Services?

Living Services are the result of two powerful forces: the digitization of everything and ‘liquid’ consumer expectations.

Living Services respond by wrapping around us, constantly learning more about our needs, intents  and  preferences, so that they can flex and adapt to make themselves more relevant, engaging and useful. Consumers demand this now as the standards are being set by the best of breed across the entirety of their experiences, not restricted by sector—hence liquid expectations.

This is an incredibly exciting time, as we are on the cusp of the next major wave of transformative digital services. We are already seeing the integration of smart digital technology into many inanimate objects, devices and machines. Just like the previous two waves— the desktop Web in the 1990s and mobile in the 2000s—this will  be truly transformative for business and society alike. Some call it the ‘Internet of Things,’ but in our view this does not accurately describe the inherent benefits this age will bring and its key characteristics. We think this is the era of Living Services.

Over the next five years, sensors, the cloud, connected smart devices and realtime analytics will combine to deliver a new layer of connected intelligence that will revolutionize the ability of brands and organizations to offer interesting and increasingly indispensable digital services to consumers.

Living Services are highly sophisticated and able to constantly learn and evolve, almost as if they are alive. They will transform and improve the way we live, both by removing mundane tasks and offering services that surprise and delight us. By being physically close to us and wrapping themselves around the everyday things we do, Living Services will intuitively learn our habits, likes and dislikes and become tailored to our individual and changing needs. The result is digital services that are contextually aware and able to react in realtime to changes in the environment or our patterns of behavior—creating once unimaginable engaging experiences.

A defining characteristic of Living Services is that they will be designed around the needs of individuals, as opposed to generic services defined by an organization for  mass  consumption.

To download this paper, click the PDF icon:

Accenture Fjord Living Services

Digital Business Era: Security Implications

  • Partner: Accenture Digital
Lisa O'Conner, Managing Director - Security, Accenture
Lisa O'Conner
Managing Director - Security Practice
Accenture

Accenture DigitalThank you to Accenture Digital for underwriting CXOTALK.

The Accenture Technology Vision 2015 outlines how leading businesses are stretching their boundaries in the digital era—and beginning to create the fabric connecting customers, services and devices through the Internet of Things. In the process, they are striving to disrupt and reshape entire markets. Most importantly, they are looking to collaborate in the “We Economy” to tackle global challenges that transcend business and industry borders.

Operating in this broad digital ecosystem promises great opportunity for the leaders of tomorrow.

It also brings new security implications that businesses need to address proactively in order to succeed. This year, Accenture found that security is a central tenet across all of the trends described in the Vision 2015. Specifically, security is a top priority to:

  • Protect connected Internet of Things edge devices that businesses use to deliver results in the Outcome Economy, while assuring data integrity to enable decision making at the edge.
  • Ensure businesses can ingest, process and generate insights from big, diverse data as they leverage digital platforms and share data through the Platform (R)evolution.
  • Transform into Intelligent Enterprises that rely on smart software (automation, machine learning and cognitive computing), and a collaborative model of humans and machines in a Workforce Reimagined.
  • Build customer trust as businesses deliver highly personalized products and targeted services in the Internet of Me era.

Since security is the foundation for these trends, we are focusing this year’s Security Implications of the Accenture Technology Vision on five themes that will help prepare businesses to stretch their digital boundaries:

  • Enabling Autonomous Devices at the Edge
  • Making Data-Driven Decisions at Internet of Things Scale
  • Securing the Three Vs (Volume, Variety and Velocity) of Big Data
  • Maximizing Protection across Digital Ecosystem Platforms
  • Building Customer Trust in a Digital Economy

I invite you to read the paper and contact Accenture to discuss innovative ways to secure the new digital ecosystem, expand the fabric of our connectedness, and enable a rich and trusted customer experience in our shared digital future.

To download this paper, click the PDF icon:

Accenture Digital Business Era: Security Implications

Mike Sutcliff, Group Chief Executive, Accenture Digital

  • Episode: 96
  • |
  • Topic: Leadership
  • |
  • Partner: Accenture Digital
Mike Sutcliff, Group Chief Executive, Accenture Digital
Mike Sutcliff
Group Chief Executive
Accenture Digital

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.

Prior to assuming his current role, Mr. Sutcliff was senior managing director of Accenture’s Financial Services business in North America, with broad responsibility for the group’s strategy, client relationships and financial performance. Between 2000 and 2005, he led Accenture’s Finance & Performance Management global service line.

Mr. Sutcliff joined Accenture in 1987 and was named a partner in 1999. He holds a bachelor’s degree in electrical/computer engineering and a master of science degree in business from the Georgia Institute of Technology.

Transcript

Michael:         (00:04) Hello, welcome to episode number 96 of CXOTalk. I am Michael Krigsman with my – I don’t know how to say – Vala you know it’s like I want to praise you to the sky. To praise to the sky worthy co-host, who willingly gave up a seat to the Super Bowl Vala Afshar, hey Vala how are you?

Vala:               (00:29) Michael what a great intro. I’m doing great and I love the fact that we’re going to end the week with one of the top thought leaders in terms of digital as our guest. So please with the introductions Michael.

Michael:         (00:44) Well we’re joined this week – we are going to talk about digital transformation, and we’re joined this week by Mike Sutcliffe, who is the group chief executive for Accenture Digital. Mike how are you?

Mike:               (00:58) I’m great and I’m pleased to be here, so thank you so much for inviting me it’s nice to spend time with you.

Michael:         (01:05) Great Vala, why don’t you jump in with the first question

Vala:               (01:08) Michael please, could you give us a brief background and introduce yourself to our audience.

Mike:               (01:14) Hi, first of all, a fantastic job that I’ve got here at Accenture Digital. Our role is to help all of Accenture to work across industries, across geographies to think about how we combine technologies. And those technologies may be around digital marketing, collaboration, e-commerce engines, it may include mobility, our analytics capabilities, our cloud capabilities.

                        (01:38) Our job is to take all of those technologies and use them to try and solve problems for our clients in new and unique ways. So it’s a lot of fun, and I get to work across all of the industries, all the geographies and I get to learn from our clients what works and what doesn’t.

Vala:               (01:54) How big is the group Michael, your group.

Mike:               (01:56) Well we are about $5 billion in revenues, about 28,000 people that are specific to Accenture Digital, But we work more in the context of more than 300,000 people at Accenture and our goal is to help them all go digital at the same time.

Michael:         (02:15) Mike, we hear the term digital transformation name thrown around a lot, and I think it’s become one of the big buzzwords of our time, so what does it actually mean?

Mike:               (02:27) Well, the way we think about it is providing better outcomes and experiences. So whether that is a better learning experience for a student or health outcome for a patient, a better interaction with the government, for a citizen, or better digital commerce transaction, or an interaction for business to business or business to consumer perspective.

                        (02:50) We’re trying to take a broad view about first of all, doing things differently, but then in some cases it’s all about doing different things. It’s about changing your objectives, your operating models, the way that you engage so that you can actually provide a better experience or a better outcome. That’s the way we think of digital transformation. It’s truly changing the way the world works and lives

Michael:         (03:13) So digital transformation is changing but it’s always on digital data.

Mike:               (03:19) Well for us it’s a lot of things. It’s a lot of different technologies and some of those are engagement technologies, the ability to reach out and communicate and interact with somebody. Sometimes it’s about mobility, the ability to allow somebody to beat mobile whether it’s a device or a person.

                        (03:35) And it’s also analytics, it’s letting analytics in a way that’s intuitive and easy to understand for people and objects in different environments. So for us, the definition of digital is a combination of communication, computing, storage, bandwidth etc. in a way that allows people

Michael:         (00:04) Hello, welcome to episode number 96 of CXOTalk. I am Michael Krigsman with my – I don’t know how to say – Vala you know it’s like I want to praise you to the sky. To praise to the sky worthy co-host, who willingly gave up a seat to the Super Bowl Vala Afshar, hey Vala how are you?

Vala:               (00:29) Michael what a great intro. I’m doing great and I love the fact that we’re going to end the week with one of the top thought leaders in terms of digital as our guest. So please with the introductions Michael.

Michael:         (00:44) Well we’re joined this week – we are going to talk about digital transformation, and we’re joined this week by Mike Sutcliffe, who is the group chief executive for Accenture Digital. Mike how are you?

Mike:               (00:58) I’m great and I’m pleased to be here, so thank you so much for inviting me it’s nice to spend time with you.

Michael:         (01:05) Great Vala, why don’t you jump in with the first question

Vala:               (01:08) Michael please, could you give us a brief background and introduce yourself to our audience.

Mike:               (01:14) Hi, first of all, a fantastic job that I’ve got here at Accenture Digital. Our role is to help all of Accenture to work across industries, across geographies to think about how we combine technologies. And those technologies may be around digital marketing, collaboration, e-commerce engines, it may include mobility, our analytics capabilities, our cloud capabilities.

                        (01:38) Our job is to take all of those technologies and use them to try and solve problems for our clients in new and unique ways. So it’s a lot of fun, and I get to work across all of the industries, all the geographies and I get to learn from our clients what works and what doesn’t.

Vala:               (01:54) How big is the group Michael, your group.

Mike:               (01:56) Well we are about $5 billion in revenues, about 28,000 people that are specific to Accenture Digital, But we work more in the context of more than 300,000 people at Accenture and our goal is to help them all go digital at the same time.

Michael:         (02:15) Mike, we hear the term digital transformation name thrown around a lot, and I think it’s become one of the big buzzwords of our time, so what does it actually mean?

Mike:               (02:27) Well, the way we think about it is providing better outcomes and experiences. So whether that is a better learning experience for a student or health outcome for a patient, a better interaction with the government, for a citizen, or better digital commerce transaction, or an interaction for business to business or business to consumer perspective.

                        (02:50) We’re trying to take a broad view about first of all, doing things differently, but then in some cases it’s all about doing different things. It’s about changing your objectives, your operating models, the way that you engage so that you can actually provide a better experience or a better outcome. That’s the way we think of digital transformation. It’s truly changing the way the world works and lives

Michael:         (03:13) So digital transformation is changing but it’s always on digital data.

Mike:               (03:19) Well for us it’s a lot of things. It’s a lot of different technologies and some of those are engagement technologies, the ability to reach out and communicate and interact with somebody. Sometimes it’s about mobility, the ability to allow somebody to beat mobile whether it’s a device or a person.

                        (03:35) And it’s also analytics, it’s letting analytics in a way that’s intuitive and easy to understand for people and objects in different environments. So for us, the definition of digital is a combination of communication, computing, storage, bandwidth etc. in a way that allows people to do things differently.

Vala:               (03:57) So this week Michael we’ve had Apple selling four a half million iPhones, which equates to if I do the math on a 90 day period of about 570 phones per minute. Google and android claim they have sold over you know 1 billion android smart devices, smart phones in 2014. And Facebook comes out and says, they’ve got about 800 million mobile only active users – daily users. So clearly, when you’ve got Facebook, Google, and Apple talking about mobile revolution – it may not beat mobile’s first, it may be mobile only trend that we are heading. So I’m guessing mobile is one of the – and you talk about collaboration, analytics, mobile, social, cloud, analytics. Are these the driving forces behind digital transformation and ultimately potential business disruption.

Mike:               (04:50) Absolutely, I mean we’re looking at mobility as one of the primary factors and how people think about changing the way they are working. And many of our clients have said, yes we’re designing for a mobile first world, and sometimes a mobile only world.

                        (05:09) And so mobility is absolutely going to explode. If you think about where we are today, we’ve got 6 billion-ish people on the planet, and let’s say that 4 billion have some kind of mobile technology that’s connecting them. And I think we’ve got between five and 7 billion things that are connected as well. And all of those numbers will explode over the next couple of years. I think we might add 9 billion in new connections to the Internet next year.

                        (05:37) And that’s all about mobility. It’s about providing the ability to communicate and to move, and for people to take advantage of the power computing and storage and science from elsewhere. So whether we’re talking about edge computing at the edge of the cloud, or whether we are talking about the computing that’s available through the cloud technologies. I think we are going to see a massive shift in hot the technology enables us to do over the next 12 to 18 months.

Michael:         (06:03) Mike what are the underlying on (unclear 06:05) that are driving these types of transformations and how is digital transformation distinct from a business transformation as we’ve known it for many many years.

Mike:               (06:19) Well I don’t think digital transformation is distinct from business transformation. From our perspective those to fit together like a hand in glove. What we’re trying to do with business transformation is understand how to deliver a better product or service. And when we think about digital, digital is just a set of tools and techniques that we use to get that done.

                        (06:39) From our perspective digital is you know a very unique in the advances in technology and the economics that are associated with those advances in dramatic drops of the cost of storage in the cost to compute, and the ability to communicate and have bandwidth spread and devices available in so many places around the world.

                        (07:05) So for us, the underlying factor is not one thing, it’s not Moore’s Law in computing power or the ability for storage to drop its price by 90% last year on a global basis. But also in addition to storage and compute, it’s the ability to connect and to have devices that are active and available in so many places and are truly at this point ubiquitous.

Vala:               (07:30) Is all of this ultimately about a competitive advantage or is it bigger than that, is something else.

Mike:               (07:37) Well I think it’s both, a short-term competitive advantage in that if you’re willing to test the waters to experiment and to define a new way of working, certainly you can gain a competitive advantage. But frankly it’s also about keeping up, because even if you’re not the one doing that, then other people in your industry are.

                        (07:57) And earlier we were talking about the fact that in the world of marketing, people are getting down to much more discreet capabilities and marketing the segments of smaller populations and in some cases segments of one. And to understanding the personas and behaviors, but even those personas and behaviors are changing over time.

                        (08:18) So from our perspective yes, it’s about short-term competitive advantage, and absolutely we’re seeing lots of people will do that. But it’s also about restructuring industries and keeping up with the blurring boundaries between industries and the new products and services to (unclear 08:33)

Michael:         (08:35) Mike, when we think of digital transformation, people very often tend to think about marketing. How does digital transformation actually affect the core operations of an organization?

Mike:               (08:51) Well so we agree with people when they think about marketing as one of the early uses of digital technology. It is all about providing better interactions and better experiences with the people you’re engaged with. And digital has done a huge huge service to organizations that are trying to create better engagement with the experiences for the individuals that they deal with.

                        (09:14) That’s where a lot of attention was for the last several years, and what we’re seeing today is an equally explosive opportunity around the way the enterprise is managed, and around the way that operations are actually executed.

                        (09:29) So we see the digital enterprise and digital operations as being a massive areas of change in terms of how supply chains work, how products are designed. How products and services are combining to create new features and experiences.

                        (09:45) So we actually see digital customer continuing to expand and explode and the interaction around a multichannel experience would be very very interesting. But when you start looking at how the products themselves are designed and the features that are wrapped around them with new services. And then how the operations of the companies change their manufacturing and supply chain, and the way that they actually work with other members of the ecosystem. We see the next generation of business and the next generation of healthcare, and the next generation of vegetation all being able to be fundamentally re-taught. And it allows our client to ask the question, what could I do in a fundamentally different way next year, as compared to what I’ve done in the past?

Vala:               (10:29) So you know given that extensive knowledge you have at (past? 10:34) industries and certainly of various personas, who is leading the digital transformation and revolution? Is it the CEO, is it CIO, are they some new titles. I mean I think LinkedIn has about 1600 chief digital officers, where two years ago there was probably 100’s. So is there an emerging C-suite that’s leading the effort and based on your client benchmark experience?

Mike:               (11:04) Well first of all we have a huge immense respect for the role of the CIO, and we believe that the CIO as in many industries are continuing to lead in terms of their thinking, there experimentation, the capabilities they’re developing. But whereas historically the businesses have thought about IT as their systems of record, and they thought about their VRP platform’s and those kind of things as kind of the core IT assets of the firm.

                        (11:30) Today they’re starting to understand that technology can enable the business in the systems of engagement, and that may be actually more important than the systems of record in terms of gaining a competitive advantage, or enabling a completely new way of interfacing with their customers, and providing the products and services that those customers are looking for.

                        (11:50) Is that part of the business, those systems of engagement become more important, we’re starting to see the buyer move outside of the CIO suite. And frankly many of the more interesting and earlier adopting kind of use cases we saw were coming from the Chief Marketing Officer. Because the Chief Marketing Officer was thinking about how to engage with customers and how to provide better products and services that those customers would be. Because they found more value in the way the products and services were being combined.

                        (12:22) We did see a lot of Chief Digital Officers get amounts, and in many cases the Chief Digital Officers came from a marketing background, and that I think goes back to the thing we talked about a minute ago about the interactive side of the digital world being an early adopter of space. But we’re also seeing now, many of the Chief Digital Officers backgrounds being more operational asset intensive in especially the industries that find that as the key value lever for where digital is going to impact their business.

                        (12:53) We think the Chief Digital Officer is being asked to represent a broad coalition across the leadership team, so it’s not just the CIO agenda or the CMO agenda. But it’s also understanding what the business units are trying to achieve, and how the new products are going to be developed. And how do you bring all of that together in a way that actually substantially changes the results of the company moving forward.

                        (13:19) That’s why we believe this is a C-suite agenda. It’s not just for the CEO, CIO, or COO, or CMO. It’s how they all work together and the really challenging thing for the CIOs is that while they’re being engaged in this exciting new space, they actually still have to keep track of the legacy environments that run the shop that exist for the systems of record. That is a a lot of work to get done in a very short amount of time.

                        (13:49) And that’s why we see a whole raft of new services available where clients are buying things as a service. And so when you look at (discussionary? 13:58) that the IT spend and you say how is it being spent. In the old world where the CIO wasn’t in control of that discussionary budget and it was kind of doled out to the business, we’ve seen that change where the businesses can just go and buy things as a service. They can buying digital services that enable them and then integrate that back into the corporate environment.

                        (14:16) So we see this as a C-suite issue that is going to continue to engage everybody in the C-suite. We think that’s a really healthy dynamic because we don’t view digital as being a technology issue. We view digital as an enabler to the whole business.

Michael:         (14:34) Mike, if this is a C-suite agenda that extends through the operations throughout the organization, then that also implies that it’s an agenda that encompasses operations and encompasses people at every level inside the organization, wouldn’t that be the case?

Mike:               (14:56) we think there is a ton of innovation to come, that may come from the manufacturing space, the supply chain space, the broader operation designs, and in fact as we start to see the blurring between industries we can see industries learning from and taking advantage of tools and techniques that have been developed elsewhere.

                        (15:17) So we absolutely agree with that point of view that this is going to be a major enabler to the next generation of the way healthcare is delivered, or learning services are delivered, or citizen services are delivered, or corporate and commercial services.

Vala:               (15:34) We have a question from Twitter from Zachary Genes, and he asks, are we in the adolescent stage of digital security or just infants in info exec

Mike:               (15:47) Great question, great question. I would say the infant stage of digital security. We know a lot of tools and techniques that could be added to the picture and still be added to the picture in the short line to address some of the immediate challenges that we face. But make no mistake, this is a multiplayer game with lots of different people who will try and insert themselves into the environment, and many of those will have malicious intent.

                        (16:17) And so you know we absolutely believe that we’re in the very very early stages of understanding and reacting to all of the challenges that will exist as digital becomes embedded in almost everything that we’re doing.

Michael:         (16:32) Mike, given the kind of pervasive nature of digital transformation across so many parts of the organization, how do you implement these programs and how do you begin to get concept of measuring the success? What are the metrics that you can use?

Mike:               (16:50) Well you know what we try and do with clients is start with the value map to understand what matters in their particular organization. So if it’s a healthcare organization and their mission is to provide better health care, then we really start to understand the key drivers of that and we say let’s measure those outcomes. Let’s talk about patient experience and the special outcomes that you’re trying to deliver so if it’s lowering the rate of occurrence in a particular disease pattern, then that is the measure and that should be what you’re going after.

                        This What we try not to do you know, let’s measure eyes that we have on a network, or how many people we have coming to you know a collaboration site. To us, activity is and what we’re trying to measure, it’s outcome. And so sometimes that’s financial outcome, sometimes it’s learning outcome or health outcome. Sometimes it’s the engagement of citizens and political process.

                        (17:46) But what we rarely try and do is to say let’s focus on what and matters and measure that, and let’s also make sure that is that we are thinking about the world of digital and what’s possible. We separate what’s possible and what we could do from what’s important and what we should do.

                        (18:04) And it’s very easy to do something digital because it sounds interesting and it make sure look good,’ I’ve done this cool thing. I built this really cool mobile app.’ Well you know, you can create a mobile app in about a week. But creating a mobile app that engages and delivers a substantial change in terms for the experience of your customer or how your employee actually executes the work. That doesn’t take a week, that takes a bit longer, it takes a bit more work and a bit more thinking, but actually generates a completely different outcome.

                        (18:34) So we try and segregate what could you do from what should you do, and then think about how to do it most effectively.

Vala:               (18:42) When you think about the (unclear 18:46) versus you know just the challenge of keeping up with these trends that are just disrupting the the way businesses grow market share and delight customers. Mobile, social, cloud, apps we’ve touched. We haven’t talked about Internet of things and big data and analytics. What are the impediments of transformation, is it skillset is it culture, is it vision and foresight, is it innovators dilemma? What are some of the big impediments?

Mike:               (19:19) Well I think that changes actually by company, depending on the industries and the geographies that they compete in, and also the positions that they hold in an industry. So certainly we see some leading competitors that are early adopters, and in fact are gaining competitive advantage using digital. But we see others that are saying you know, I can wait and see and become a fast follower.

                        (19:42) And so the first impediment is just to understand what’s happening and do you really truly understand the pace of change, and whether or not there might be a disruptive change coming at you that’s not easy to predict, right.

                        (19:55) And so we have these discussions you always hear people talk about BnB and Uber being complete disrupters to industries that weren’t expecting them, and certainly that’s true. But what we expect to see in most industries is that the people that make the most disruptive change are actually already incumbent in the industry. They’re just willing to rethink what it is that they’re going to do to create value in the industry. And then there going to leveraged their assets, their customer relationships, they‘re really deep insights in how the industry works today to think about what it might look like tomorrow.

                        (20:30) So if you can get past that stage you’re really thinking about the strategies and what would be creating significant new value, then the disruptors usually move to skills. It’s not technology, because the technology exists and it’s easy to buy. You can buy it, rent it, have it as a service if you want, but do you have the people in the organization that know how to use it and apply it perfectly. And that’s true in terms of whether you can get enough data scientists, or whether or not you can get people who really understand how to use design skills to do service design work effectively.

                        (21:02) And we see a lot of clients struggling because frankly there are a lot of gaps in the talent markets. And specifically, you know if you don’t happen to live in the right geography would be in one of the industries that was an early adopter. If you’re looking in the traditional places that you might recruit from they’re not developing the skills that you are looking for. And so, once you have passed the strategic issues we actually see talent as one of the big challenges.

Michael:         (21:27) What about the intersection of analytics, mobile, interactive cloud – and by the way, I’ll just mention parenthetically that we’re talking about technology as a foundation even although you just said, technology itself is not the thing – it’s not the main thing, but technology is certainly a critical component of it. So again, analytics, mobile, interactive cloud, what’s the intersection there and the role?

Mike:               (21:57) Well you know we look at this as I said, it’s a combination of changing in their technology capability, whether that is computing power or sensor capabilities, or communication capabilities, storage and bandwidth capabilities. It’s knowing how to take advantage of all of those things to do something that actually is going to make a difference for you.

                        (22:19) And one of the challenges in the IT stake try now, is the way that we train people to do development work over the past 30 years, it’s fundamentally different than what we need to do to create liquid application and really take advantage of the open source libraries, the API datasets and the STK’s that are out there.

                        (22:41) And so if you look at a company like Apigy, who is in the API space, right they spend a lot of time trying to educate the big IT shops, on what is possible in terms of exposing their legacy environments in a way that could be taken advantage of by developers that might sit outside the company.

                        (23:01) Or it might be vice versa, how their developers inside the company might use those API’s and SDK’s to take advantage of open source libraries. And so when we look at this evolving set of technologies, and you start to think about the advances and cognition engines or artificial intelligence, or advanced analytics, and asked whether or not the traditional IT teams know how to do that.

                        (23:25) the answers – probably not, and so there’s a lot to be done in terms of educating and working out how these technologies can work together and then doing that at a fairly rapid pace. So for us it’s a big challenge for most of the members of the ecosystem, to keep up with that pace of change because it is moving dramatically quickly.

Vala:               (23:49) Does that talent extend to the C-suite. I mean we talked briefly about chief digital officers, can you talk a little bit about – and when I mean extending to the C-suite, we have CIOs and traditional CIOs/CMO’s who are able to you know address some of these megatrends and drive transformation, and is it lack of talent that is leading to you know a CDO coming in and really leading the transformation efforts.

Mike:               (24:20) Well I’m not sure that I would describe it as a lack of talent. I think we have a lot of very talented CIOs that are doing just that, that are leading the change, that are being innovative and kind of redesigning what it is that the CIO organization brings to the rest of the business.

                        (24:36) But remember as I said earlier they still have the heavy lifting to do to maintain the legacy environments that have been built up over the you know past 20 or 30 years, and figure out how to continue to be more operationally efficient and effective in that space, while they are also being innovative.

                        (24:52) Chief Marketing Officers in the same way right, Chief Marketing Officers think about the tools and techniques that they use them as, and they find that those tools and techniques haven’t nearly been effective as they had been. They have got to learn a whole host of new things.

                        (25:06) So there’s a lot of change going on at every level, whether you’re COO, CMO, CIO, and especially if you’re a CEO to really grasp that concept that technology is not something that happens underneath the covers of the business. But technology has got to be core to how you design a product how do you think about the services that you wrap around the product. How do you think about enabling that with the community of people that make find value, how do you partner with others and in ways that you might not have felt comfortable with in the past. Because, I think ecosystem relationships are massive massive accelerators to what a lot of people are going to need to accomplish.

                        (25:46) So having that CEO mindset that is not just kind of, I’m running the company that we’re competing as a company. But, I’m running a company that exist as an ecosystem that plays a multiplayer game, and can take advantage of all of these technologies to very rapidly redefine our products and services, and the value that we create. To me that’s the question, how many of those have got the mindset?

 

Michael:         (26:09) Mike we have a question from Twitter from Arsalan Khan, who asks, what about specific industries that Accenture is hoping to learn from.

Mike:               (26:24) Well the early adopters of digital technology consumer facing industries, whether that was a consumer products goods and retail or whether it was retail financial services, or even communications to high-tech. So we saw a lot of early adoption there and we’ve learned a ton from those companies, because they were out experimenting, they were doing things that we could all learn from and then take across other industries.

                        (26:51) What I’m expecting to see as we move forward is to learn from a lot of the industries that are a lot more asset intensive or operational intensive, as they start thinking about how the industrial Internet can be used. You know, we’ve had people who’ve spent 20 years thinking about the automation about the industrial environments. That’s massively changed in a very rapid rate, and I think we can learn from many of those, you know the people that are out there experimenting.

                        (27:21) We certainly respect what GE has done with their Predix platform, and we look at the joint ventures we’ve done with GE around the airlines industry or the natural gas pipeline industry, or the oil and gas pipeline industry, and we say gosh, there were lessons that we saw there that we didn’t expect.

                        (27:41) And so I think what we’re going to see is the industrial sector is going to start teaching us things about how this digital technology can be used, that frankly may lead them back over into some of those consumer faced industries that were the original early adopters.

                        (27:56) Something I would see as bit of balancing in terms of where we see the innovation and where we take lessons across industries.

Vala:               (28:04) Mike, (unclear 28:05) analytics and the role and importance of analytics and perhaps the intersection of mobile and social analytics and the role it plays in terms of successfully transforming the business to delight customers grow revenue and reduce expenses through digital initiatives.

Mike:               (28:30)… Business it is absolutely the backbone of our belief to do this. So I talked about mobility and mobile first, every single one of our client assignments includes mobility. It just does, right, we’re already at that point.

                        (28:47) But beyond that, every single one of our client assignments also includes some level of analytics. Now, a lot of the analytics was early stage business intelligence where we were just trying to provide scorecards, and you know give people at least and instrumentation panel that tells them what’s going on and how they can react to it.

                        (29:06) But that’s not what I considered to be analytics, that’s business intelligent and it’s got a lot of value that we can create. But when we start talking about analytics, we’re talking about using advanced analytic techniques and things like machine learning and have mission engines, that enable us to take very complex science and make it available at the point of need in a way that’s very simple for somebody to understand.

                        (29:29) So, if I’m talking about a call centre rep who’s talking to a customer in the middle of a conversation, I can actually use machine learning cognition engines to tell them how to do a better job resolving that particular problem, and make it so intuitive and easy for them to understand that they don’t have to understand the science that’s already occurred to get them to that particular answer.

                        (29:52) We look at analytics and we say, whereas many people think about analytics for the corporate centre, or analytics that are designed for a kind of a power user. We’re looking at the opposite; we’re saying how can we take analytics and make it available everywhere in all the points of need in the organization, where people are trying to make better decisions.

                        (30:14) Sometimes it’s not people, sometimes it’s machines. So we’re trying to provide analytics in a machine to machine world, so that machines can do a better job at interacting with each other and predicting way where failures are going to occur, predicting when a better solution could actually be executed on behalf of some other process that is going on.

                        (30:35) So for us analytics is absolutely core to all of this.

Vala:               (30:40) So in process transactional based real-time delivery of analytics to either speed up the execution velocity and overall improve the service quality, whether it’s using machines, people you know, any node in your ecosystem that can provide you insight?

Mike:               (30:58) Yeah, so generally our discussion around analytics is what we call, insight to action. Sometimes the insight is a power user, somebody who is looking at a macro level set of data and trying to understand the big trends and how they should act to those trends. Sometimes it’s strategic where we’re trying to decide what market and how how to change a product attribute. So sure, there’s tons of analytics that exist at that level

                        (31:26) But in addition to that, we also believe that we want analytics to enable action as you said, in real time operational environment, whether that’s machine to machine or machine to person – or in many cases person to person.

Michael:         (31:41) Mike, what about the role of culture and getting people inside the organisation to understand, how to make most effective use of the data that is out there and of the analytics that’s available to help them interpret their work.

Mike:               (31:57) Well you know one of the things that recent fewer trends document that just came out is making sure that you’ve got humans inserted into the process. So we don’t view this as an environment where we’re trying to eliminate the human factor.

                        (32:14) And in some cases we have seen that, where people go too far and try to make it a technology solution. What we’re trying to do is enable humans to do a better job at the things that they do well right, of understanding context of reacting to complex situations of delivering empathy and solutions where those things are needed. And so where we see culture go wrong is when we try and take analytics and have that supersede the human element as opposed to enable the human element.

                        (32:51) And when that happens and of course humans are resistive, they say, I don’t believe those analytics or, you’re telling me those analytics are outweighing my gut instinct of the understanding of the industry.

                        (33:02) So what we’re trying to do is provide a balance to say, we’re going to give you insight and we’re going to help you make decisions but do that in the context of understanding the human element, and the importance of the human element in providing the experience that your clients are looking for.

Michael:         (33:19) So that culture change, do you see it as a primarily top-down or a bottom up effort.

Mike:               (33:27) Will certainly both. I think top-down is about setting the context that being inclusive in leverage in all of these different technology capabilities that we called digital. It’s imperative – it’s absolutely not optional, you just have to be open to the fact that these digital technologies these are going to change the way we work.

(33:52) And so if a leadership team in a company believes that, and then gives their people the digital technology that will allow them to redefine their industry and redefine the way they work, generally that gives the environment that you’re looking for for effective change to happen. But that by itself won’t make it happen.

(34:14) You also have to have the bottom up part of the cultural change, where the individual person being impacted actually believes that this is going to give them the ability to do a better job. It’s going to give them the ability to succeed at the things that they think are important in doing their daily work.

(34:30) And so I see these big introductions of digital technology at a very low take-up rates, but what we’ve usually seen is the top-down work has been done. But the change management and human element work hasn’t been done two make sure that the workers don’t just take it as a new tool that is disruptive to what they‘re doing. But they understand that it’s a new tool that enables what they’re doing.

(34:55) And if we can get that balance right of the top-down and bottom up, that’s where we see the massive adoption of change occurring.

Vala:               (35:01) You mentioned GE and industrial Internet of things GE engines and sensors and machine to machine communication, and machine to people. Are there specific industries that are you know, particularly innovative in terms of not just IOT, but just digital transformation in general?

Mike:               (35:21) I wouldn’t say there are actually. You know, when we look at what GE is doing, certainly they work across multiple industries with their platform. But they compete with companies like APD and Siemens, Snyder Electric and others who all have their own versions of what GE is doing, across multiple industries and geographies.

                        (35:42) So I wouldn’t say that I would hold out a particular industry as being too far ahead or frankly even too far behind. I think we’re seeing change across all the industries and certainly within Accenture Digital, our demand is consistent. It’s across industries, it’s across geographies and there’s not a single geography that I can point to where we don’t have demand organically in that country for significant change. And there’s not a single industry that I can think of that isn’t actively thinking about not having to disrupt what they’re doing to do it more effectively.

                        (36:16) So I wouldn’t hold anybody out as a big leader, and I wouldn’t hold anybody out as a big lagger. Although certainly the early adopters have got a much more rapid pace of change going, and some of the people who are slow on the take-up and who are just out of the gates have gotten more work to do to catch up in terms of enabling a faster pace of change.

Michael:         (36:38) Mike, obviously there’s a clear connection between innovation and digital transformation efforts, in fact, I think one could say that the two are inextricably linked. What about the idea of using start-ups as an extension of corporate innovation efforts. What do you think about that?

Mike:               (37:01) Well first of all we see a lot of it and we think it’s very healthy. We do it and we have an innovation programme at Accenture at our central labs organization that Accenture Digital that are actively engaged with the incubator for venture capitalists and private equity firms and entire start-up communities.

                        (37:19) But we’re also dealing with the labs at the universities, we are dealing with the labs at companies like Microsoft, SAP and Oracle, Cisco, and Intel, and (unclear 37:27) and lots of others, where we’re trying to understand how to take those early stage innovations to where they are going to make a difference.

                        (37:38) And any of our corporate clients are doing the same thing. Many of them have their own labs, and many of them have got their own incubation program’s where they are bringing that incubation in. We do something with financial services called (Pin-tech? 37:49) where in New York, London, Asia we actually invite companies to come in who are all early-stage start-ups. They get evaluated by our clients, by the private equity investors and by Accenture.

                        (38:04) We pick 12 of them and host them in our offices for the summer, and each of the 12 goes out and does a pilot program with one of our clients. And we work together in the summer with our clients and the start-ups to help both of them go through that learning curve to work with each other.

                        (38:21) That program has been immensely successful, and we’re now replicating it in other parts of our business. So we believe it’s absolutely healthy to have start-ups as part of the incubation and innovation process.

                        (38:34) Having said that, on balance, one of the things that a lot of our clients are struggling with which is, where does innovation occur? And our point of view is that you know it’s easy to read all of the stories in the press about what’s happening in Silicon Valley, and he in Israel, London, or other places around the world that are known as kind of digital hubs. But we are seeing just as much innovation occur in the large companies.

                        (39:03) Right if you look under the covers of a company like JPMC or British Petroleum, or shell or ABB, there’s a ton of innovation going on in those companies. And that’s true across industries, so I just hold them out as examples because they’ve all got case studies that you can read about in the press on interesting innovations that they’re working on.

                        (39:25) But we think there’s an absolute ton of innovation that goes on in these large companies is going to make a huge huge difference in how they operate. And our perspective is when clients come to us and say, I want to run an innovation programme. We usually ask them if they’re sure that that’s what they want to do. Because we don’t think innovation for innovation sake is a good use of their time. What we ask is what problems are you trying to solve.

                        (39:50) And who can be most helpful in solving those problems. Sometimes it’s members of another start-up community. Sometimes they’re right there in your own staff. Sometimes their members of the ecosystem who you already partner with in another part of the business. Where you could be bringing their assets and your assets and capabilities together, you could do something really interesting.

                        (40:07) So what we say is less not talk about innovation for the sake of innovation. Let’s talk about specific problems and then think about how you solve those problems.

Vala:               (40:16) Mike can you give me and my peer CMO’s advice in terms of you know how we can successfully lead or actively participate in terms of you know business digital transformation

Mike:               (40:32) Well I guess the first advice that I would give to leadership teams is listen to their people. Because there are lots of people in your organization who have got fantastic ideas, and they have the energy to make a change.

                        (40:46) In many organizations aren’t well structured to take that input and act on, right because they’ve got the process and the management structures in place to create predictable results. What they don’t have in place is the management structure and processes that allow the organization to take the great ideas that exist with their customers, with their employees and with their business partners and do something about them.

                        (41:10) So that ability to take that input from the ecosystem that you are already part of, whether it’s a business partner, employee, or customer and then go and do something with it. To me that is the biggest missing piece of the puzzle. It’s not a lack of knowledge about what’s possible, it’s frankly that most organizations that are set up to try and generate predictable results, are not thinking about how they enable that disruption in the sustained management structures and processes that exist inside the company.

Michael:         (41:40) Mike we only have a few minutes left, but I know that you have some interesting ideas, innovative ideas on the use of data and analytics in the government, and that’s been a topic that we’ve explored on CXOTalk quite a bit. So maybe can we close out by you sharing some of those thoughts on what you’ve seen out there?

Mike:               (42:00) Yeah, so absolutely, first of all we supplied a lot of the government’s around the world that are actively working on understanding the data that they collect and making that available as a public asset that others can use. And we’ve seen that now as you know, a very successful early stage activity, where the governments are really actively generating very valuable datasets and making them available for others to use.

                        (42:26) The other thing that governments are starting to do is to allow other people outside of the government to give them ideas on how to take advantage of data, not only from the government, but that exists elsewhere to do a better job of running their governments. As an example, you have all probably heard of the app that you can have on your phone that allows you to record where the potholes are in the city automatically as you’re driving around. And have all of that information flow into the city so they know where the potholes are, and how many people a day are hitting each pothole, so they know which potholes to go and fix first right. Taking advantage of that external dataset that the government didn’t generate but somebody else did and using it to do a better job running the city, absolutely one of the things that they’re getting smarter about.

                        (43:14) But another thing that we’ve seen in government is the ability to use social networks in the data that you can get through social networks, to do a better job of writing legislation. Because as opposed to only having the staff from a particular government entity involved in drafting the legislation, they can actually open drafts of the legislation out and asked people, what are the unintended consequences that would occur if we pass this particular form of legislation. And you as the public can give us input into alternative versions of this legislation that might give us more effective results as we continue to create the solutions that the citizens are looking for.

                        (43:56) And you know I think as we think about managing the datasets, taking advantage of external datasets, taking advantage of collaboration and input from lots of different places, the governments are finding that they can do lots of interesting things, that fundamentally change the way that they execute their mission. And we think that they are literally in the early infant stage of understanding how powerful analytics can be, and actually affecting the change that they’re trying to impact.

Vala:               (44:33) Mike, you’re dropping some major science on us. I can barely keep up with Twitter and I’m looking forward to about 3000 word blog summary of 45 minutes. Thank you so much.

Mike:               (44:48) It’s been nice thank you so much and it’s just a fantastic time to be doing what we do at Accenture digital, because as I said we get to work with clients across every industry, every geography. We get to experiment and learn together with our partners and ecosystem. And frankly we get to work on interesting projects that really do change the way the world is going to work and live. So it’s been fantastic to be here with you. I enjoy your blog and I look forward to learning from the others that you have on the program. So thanks a lot.

Michael:         (45:20) Well thank you so much. You’ve been watching episode number 96 of CXOTalk and we’ve been talking with Mike Sutcliff, who is the Group Chief Executive of Accenture Digital. And Mike, you’ve given us and education in digital transformation, so thank you so much and I hope that you’ll come back and join us another time.

Mike:               (45:45) I would absolutely, it would be my pleasure. Thanks guys, it’s been a blast being here today and I’ll look forward to our future conversations.

Michael:         (45:52) And everybody watching thank you so much for participating. Next week we have a great show, which is a panel on corporate innovation and start-ups and accelerators and incubators. So tune in next week at the same time and I hope everybody has a great weekend. And again, thanks to Mike Sutcliff, and Vala as always it’s a pleasure and it’s the highlight of my week to do this CXOTalk with you.

Vala:               (46:21) Mine as well, thank you very much. I hope you enjoy the Super Bowl. We have to customers competing for the Super Bowl XLIX trophy. This is a great weekend.

Michael:         (46:31) Alright see you later everybody, bye bye.

 

Companies mentioned on today’s show:

 

Accenture Digital:                              www.accenture.com

Uber:                                                   www.uber.com

Apigy:                                                  www.apigy.com

GE:                                                       www.ge.com

APD:                                                    ?

Siemens:                                             www.siemens.com

Schneider Electric:                             www.schneider-electric.com

Microsoft:                                           www.Microsoft.com

Intel:                                                    www.Intel.com

Oracle:                                                www.Oracle.com

SAP                                                      www.sap.com

Cisco:                                                  www.Cisco.com

British Petroleum:                             www.bp.com

Shell:                                                   www.shell.com

JPMC:                                                  www.jpmorganchase.com

ABB:                                                    www.abb.com

Two Accenture CIOs: Frank Modruson and Andrew Wilson

  • Episode: 30
  • |
  • Topic: Leadership
  • |
  • Partner: Accenture Digital
Frank Modruson, Former CIO, Accenture
Frank Modruson
Former CIO
Accenture
Andrew Wilson, CIO, Accenture
Andrew Wilson
CIO
Accenture

Frank B. Modruson, former CIO of Accenture, leads a high-performance global IT organization that directly supports the business goals of a $27.9 billion company. He oversees all business applications and technology infrastructure, enabling more than 266,000 employees to serve clients in more than 120 countries and work anytime, anywhere. Frank has transformed IT into a strategic asset for Accenture. Under his leadership, the IT organization has produced an unparalleled ability to run IT as a business, implemented a comprehensive governance model, streamlined the technology infrastructure and much more. Formerly serving as a client partner, he delivered large, complex IT transformation projects and business solutions that maximized ROI.

As Chief Information Officer for Accenture, Andrew Wilson leads the global IT operations of a $28.6 billion company, including the infrastructure, services and applications that enable Accenture people to work anytime, anywhere to serve clients in more than 120 countries. Mr. Wilson ensures that Accenture is at the forefront of innovation as a digital business—from mission-critical applications to the network, from e-mail and laptops to enterprise social media and collaboration tools. Mr. Wilson is also responsible for end-to-end performance and service operations of Navitaire, a wholly-owned Accenture subsidiary, which works together with Accenture to provide expertise and to deliver services for airlines in key operational and revenue generating areas.

Transcript

Michael:         

(00:02) Hello, welcome to another episode of CXOTalk and this is episode 30. I’d like to thank you for joining us, I’m Michael Krigsman and I’m here with my absolutely wonderful co-host, Mr Vala Afshar, Vala how are you

Vala:   

(00:24) What an honour and pleasure to have episode 30 with not one, but two incredible CIO’s.

Michael:         

(00:31) I know, to very innovative CIOs who are going to tell us a wonderful story. The present CIO of Accenture, Andrew Wilson and the retiring CIO of Accenture, Frank Modruson. Gentlemen thank you I’d like to thank SAP as well for sponsoring this week’s episode, we really really do appreciate that.

(01:04) So gentlemen, Frank and Andrew, why don’t you tell us a little bit about yourself and your roles. Andrew, since you’re the present CIO, maybe we should start with you.

Andrew:

(01:15) Delighted to and thank you for the invite for joining today. I think your programme is very innovative and interesting. I am the new CIO for Accenture, but not new to Accenture. I’ve spent the majority of my career in a technology and business process industry, and most recently I ran Accenture’s infrastructure outsourcing practice serving clients all over the world, running mission-critical production systems.

(01:40) The biggest client of all for us is ourselves, and this challenge is allowing me to take up the baton from Frank, who will in a moment described where he’s been for the last 11 years as CIO.

(01:52)On an agenda of digital transformation for an organisation, which is itself at the heart of technology transformation industry. So I’m delighted to be the CIO and I’m delighted to join you today.

Michael:

(02:04) Great, thank you so much, and Frank tell us a little bit about yourself.

Frank:

(02:10)Well thank you Michael and thank you Andrew. I’m wrapping up 11 years of Accenture’s CIO. I joined Accenture in 1987 and I spent the first chunk of my career serving our clients. And then in 02, I moved over to become the CIO of Accenture. And I’ve had a wonderful ride and we’ve done some really wonderful things with technology, and now I’m passing the baton to Andrew and I couldn’t be more thrilled about it. I think our technology is well positioned, but technology keeps moving and it really is a race to keep in front. So handing the baton to Andrew means he’ll be moving forward, and over time replace everything I’ve done and I’m actually quite excited about that. Because technology just keeps moving, and I was at an event with (Horowitz? 02:55) this week, and somebody asked the question, what enterprise you know technology today is going to exist tomorrow.

(03:05)Actually I think the right answer is probably none of it. It’s pretty amazing how much things will change over time. Over to you Andrew.

Andrew:          

(03:13) I think the nature of what the enterprise of technology is actually changing as well. 10 - 15 years ago, it was all about data centres, networks and everything behind a fire wall and we all know that is now very different. But the actual range and extent of technology which a CIO is actually responsible for – or indirectly responsible for, because there is a lot of Velcroing out into cloud and into managed services, has change the nature of the role significantly.

(03:39) So, we look now at TV studios and social and collaboration media as is important to the traditional back-office core systems, which I think used to typify the role but I think less so and increasingly so today.

Vala:   

(03:53) Question to Frank, Accenture is one of the largest consultant firms in the world, 275,000 employees and considered to be a Fortune 500 company, and you’ve been the CIO for 11 years. What does the role of the CIO encompass for such a massive organisation that’s servicing clients around the globe?

Frank: 

(04:18) Well it encompasses a lot at its simplest level

Michael:         

(00:02) Hello, welcome to another episode of CXOTalk and this is episode 30. I’d like to thank you for joining us, I’m Michael Krigsman and I’m here with my absolutely wonderful co-host, Mr Vala Afshar, Vala how are you

Vala:   

(00:24) What an honour and pleasure to have episode 30 with not one, but two incredible CIO’s.

Michael:         

(00:31) I know, to very innovative CIOs who are going to tell us a wonderful story. The present CIO of Accenture, Andrew Wilson and the retiring CIO of Accenture, Frank Modruson. Gentlemen thank you I’d like to thank SAP as well for sponsoring this week’s episode, we really really do appreciate that.

(01:04) So gentlemen, Frank and Andrew, why don’t you tell us a little bit about yourself and your roles. Andrew, since you’re the present CIO, maybe we should start with you.

Andrew:

(01:15) Delighted to and thank you for the invite for joining today. I think your programme is very innovative and interesting. I am the new CIO for Accenture, but not new to Accenture. I’ve spent the majority of my career in a technology and business process industry, and most recently I ran Accenture’s infrastructure outsourcing practice serving clients all over the world, running mission-critical production systems.

(01:40) The biggest client of all for us is ourselves, and this challenge is allowing me to take up the baton from Frank, who will in a moment described where he’s been for the last 11 years as CIO.

(01:52)On an agenda of digital transformation for an organisation, which is itself at the heart of technology transformation industry. So I’m delighted to be the CIO and I’m delighted to join you today.

Michael:

(02:04) Great, thank you so much, and Frank tell us a little bit about yourself.

Frank:

(02:10)Well thank you Michael and thank you Andrew. I’m wrapping up 11 years of Accenture’s CIO. I joined Accenture in 1987 and I spent the first chunk of my career serving our clients. And then in 02, I moved over to become the CIO of Accenture. And I’ve had a wonderful ride and we’ve done some really wonderful things with technology, and now I’m passing the baton to Andrew and I couldn’t be more thrilled about it. I think our technology is well positioned, but technology keeps moving and it really is a race to keep in front. So handing the baton to Andrew means he’ll be moving forward, and over time replace everything I’ve done and I’m actually quite excited about that. Because technology just keeps moving, and I was at an event with (Horowitz? 02:55) this week, and somebody asked the question, what enterprise you know technology today is going to exist tomorrow.

(03:05)Actually I think the right answer is probably none of it. It’s pretty amazing how much things will change over time. Over to you Andrew.

Andrew:          

(03:13) I think the nature of what the enterprise of technology is actually changing as well. 10 - 15 years ago, it was all about data centres, networks and everything behind a fire wall and we all know that is now very different. But the actual range and extent of technology which a CIO is actually responsible for – or indirectly responsible for, because there is a lot of Velcroing out into cloud and into managed services, has change the nature of the role significantly.

(03:39) So, we look now at TV studios and social and collaboration media as is important to the traditional back-office core systems, which I think used to typify the role but I think less so and increasingly so today.

Vala:   

(03:53) Question to Frank, Accenture is one of the largest consultant firms in the world, 275,000 employees and considered to be a Fortune 500 company, and you’ve been the CIO for 11 years. What does the role of the CIO encompass for such a massive organisation that’s servicing clients around the globe?

Frank: 

(04:18) Well it encompasses a lot at its simplest level and it encompasses all our infrastructure that are our hosting data centers, all that stuff. And then all the applications to really allow the company to operate on a daily basis. But that in a nutshell is our technology, then you break it into operations and investments and we try to buy us as much effort on innovations as possible to drive our self forward into the future.

(04:50) But it’s about transforming Accenture. Transforming how we work, how we interact, and constantly moving the company forward into the future. So IT today, looks nothing like it did in 2011, in fact most of that IT has been all replaced and if you spin forward, I think for Andrew’s leadership it may actually happen faster in the next wave.

Michael:         

(05:14) So you’re going after this constant renewal of IT, and it sounds like your reference point is how can IT play important aspects to the business.

Frank:

(05:29) Correct, absolutely.

Andrew:          

(05:32) Keeping up with the rapidly changing business. Accenture isn’t a single homogenous entity. Itself has transformed, it enables high-performance and it needs to be very nimble. So 10 years ago it was predominantly a client-based mobile workforce, but working in the same locations as its clients and working in the same locations as each other with basic technology enablement, email etc.

(05:56)Now we have global delivery networks. We have large client teams, multi-sourced from many different shared service entities all over the world. We operate in every time zone continuously, and so we do a lot more of our work through virtual enablement than through physically being together.

(06:13) But then on top of that we have an increasingly mobile workforce that needs increasingly sophisticated tools infield to do their job, and bringing all that together and the demand profile is very different from the more classic role if you like.

Vala:   

(06:27 Is mobility the megatrend that’s most impacting the transformation – not just within Accenture but your clients.

Andrew:          

(06:37) The main ability is a megatrend, but an increasingly and equal one is a demand for mission critical always on for services which were not initially perceived to be that mission-critical. It’s easy to see why the back-office finance office will be regarded as you know key.

(06:57) Now, collaboration, which started as aim and basic messaging, is the way we all talk every day for voice, for video, and for virtual meeting enablement on quite a sophisticated scale and on huge scale as well.

(07:12) Now that has changed completely in the last couple of years. The adoption you know breaks all records goes through the roof. We are well over 100 million minutes of activity every month through something which has to be absolutely mission-critical. And frankly, if there is any is destruction to it then it is far more impactful and immediately evident that if the finance system, for instance has an hour-long outage.

(07:36) So we’ve had to completely reimagine the nature of the frontline service interface of that client i.e. all the end users. And then you’re right, you know and by the way they’re on the move, so is not the case of being in a nice quiet room in the studio, they want to access it through mobile tablets, through smart devices as well. And they want to be able to collaborate with their clients through that, which inlayers in security, which I would argue is a third megatrend that we have to deal with as well.

Michael:         

(08:03) Frank, you’ve been CIO for 11 years now and for many CIOs asked the question, how can we be relevant and how can IT be relevant to the business. But it sounds like in your case the issue of relevancy kind of goes away because it seems that you see yourself and you see IT as kinds of intricate with the business and transformation strategy. Is that a correct way for me to look at it.

Frank: 

(08:35)Well it is a very good way to look at it, and I think the key part is to have a very engaging dialogue with the business. We have an IT spearing committee composed of the COO’s of the company, the people that run Accenture on an everyday basis. We spend a lot of time interacting with them, and have over the years they’re the governing body of IT, but they also guide us on what’s best for Accenture. They are the voice of the senior level of what Accenture wants.

(09:07)They help us ferret through all the requests we have, but then we go down into the business to work hand-in-hand with business people, because ultimately IT is here to help Accenture operate better. Whether it’s in our back-office function, in our collaboration, and working with clients. You know, we see the barriers between ourselves and our clients going down and we want more integration across the firewall. We want more integration for our people around the world.

(09:37)As Andrew put it, the people that show up as our clients can be anywhere in the world. Teams are often made of individuals from different parts of the world, coming together both physically and virtually to serve a client. Those teams might be five people, those teams might be 500 people.

(09:56)The technology is what brings it together, but we need to constantly be talking to our end users and getting feedback. In fact we have a project underway right now, where we are actually doing deep dive focus groups to get better information about exactly what the organisation wants in different areas of our technology.

Vala:   

(10:16) Do you have a sense of what percentage of the 275,000 employees are mobile, virtual office telecommuters? I get a sense with this mobile megatrend, social and collaboration and the fact that we live in an economy, and the notion of an office space may overtime go away. How much of that is true within Accenture?

Frank: 

(10:39) Well Accenture well there’s a couple of different parts to Accenture I would say we have about 300 locations of our own around the world. I would say roughly half the people are in our locations and the other half are somewhere else in the world. We know that our people show up every day is about 10,000 different locations, and those locations can be clients, home, airport,Internet café. It can be anywhere

Vala:   

(11:09) That is unbelievable

Michael:         

(11:11) So you’re supporting this infrastructure of 10,000 nondeterministic locations.

Frank: 

(11:19)It makes for an interesting day.

Vala:   

(11:21) That’s unbelievable, so tell us in terms of security and availability, you know how do you ensure the user experience is the same at a client’s location, or on the way to the desired space, or even in the office. That is just fascinating, you would have to have lots of checks and balances monitoring and and really to pulse up the network from 10,000 locations.

Frank:

(11:48)Well there are a couple of things we do. First off its the architecting our solutions to be simple and accessible from anywhere, right. So we’re very much an IT, ATTPS architecture for everything. If you can get a network connection, our technology needs to be able to show up. We cannot control all of the links over the network because often at times people aren’t on the Internet. But as the Internet has gotten better this has become a very viable solution for hours.

(12:18) In fact I was in a discussion with one of our large financial services clients this week. Interesting enough it was over video with some of the people in person, our CEO was actually in Paris, and we were in the Bay area all stitched together. And one of the members of the team that was presenting to the client from our labs group, talked about how they worked with a group in the Philippines and India and that they use some of our high definition video to talk to those teams from home in the evening.

(12:47)And the CEO of the financial services company was frustrated because he said, I can’t get the video to work on my internal network. You’ve got it working on the Internet, internationally, how is that possible? Well, the technology is actually getting pretty good. We do a lot of work to try to enable that and educate our people in what’s necessary for it to work, and then we watch the launch and then work it.

Michael:         

(13:14) Yes pretty extraordinary. Let’s go back to this topic of innovation and transformation. We hear your people use that phrase, IT innovation and IT transformation, business innovation, and business transformation. At Accenture in respect to IT and the relationship to the organisation, what exactly does it mean? And where does the rubber meet the road in practice as opposed to just concepts of buzzwords. Andrew, do you want to take a stab at that one?

Andrew:          

(13:50) Well in my prior role, that was a question clients asked all the time. And I boiled it down to its around ensuring that the technology that you operate isn’t a function of its past to derail its present.

(14:07)So large-scale network are typically built up over a period of time and they can be a function of rapid expansion. They can be a function of acquisition, and the technology is inevitably if not managed in a transformationalist way, going behind the business appetite for communication and collaborations, simplification and clearly costs.

(14:26)So there’s always a combination of cost, availability and tell me what the right innovation is. There’s too much in this ecosystem, too many new ideas, too many swirling things. How on earth do I select something which is going to be around long enough that I can get in place and that I can integrate with the other components that I need to integrate it with.

(14:50)That boiled down is the question most clients have asked me. So a pragmatic transformational agenda is something that brings simplification, remote operation, low cost of operation, standardization. And then an availability to augment it in a rapid way. But to regard it as something that’s going to change completely in a more rapid refresh cycle that it would have done 10 years ago.

(15:15) So if it’s your network that is typically combining voice and data and video, it’s got to have new security protocols, it’s got to have a higher state of availability and resilience. It’s got to be automatically always on and tested as such. Features and factors that if not designed in from the start are typically difficult to add later.

(15:36) So and innovative agenda is how to bring that about more quickly and to deliver benefits in a business case, which then the IT can be run as a business which is one of the things that we want to do.

(15:46) Accenture its business is technology, so to a certain extent the CIO organisation has to be pre-eminent as an example to that, because our clients often want to see us doing it to ourselves in order to prove that we are a safe pair of hands to do it to them as well.

Frank: 

(16:02) Michael, can I add one point to Andrews which I think is important, so I also think as you go to the future, you need to be very cognizant of getting rid of 100% of the past. That’s what actually a lot of organizations trip upon. They move to the new stuff, but they don’t retire everything from the past. They retire most of it, but not all of it and then they have this legacy of little problems that end up popping up and getting in the way of things.

(16:36) So I often think about you know, if you remember the old days of railroad in North America, when they went into parts of the country they would lay the rail in, but since metal was valuable and they went after natural resources like lumber and lay the rail in. When they cut down the trees they wanted, they actually would come back and pick up the rail; they would remove the railroad.

(16:58)They didn’t have to do that it would be hard work right. But getting rid of the old decants of all technology is really hard. It’s incredibly valuable to do it.

Michael:         

(17:09) How do you do it? In an organisation at this scale of Accenture, I mean I can see how small company can do that, but how do you manage that at the scale of which you operate?

Frank: 

(17:24)Aggressive standardization and regular refresh cycles is not as hard as actually you would think. You’ve got to attack a problem the right way and think holistically, but one of the hallmarks of our IT is not only is it brand-new, but it’s the least expensive IT in our industry. Which is a bit of an oxymoron, but you know what, that’s what happens. The new technology is always cheaper than the old technology.

Andrew:

(17:54) Effective governance with your client base as well, again we practice what we set out to do at our external clients, so typically large multinational so scale is something we are used to. We see clients working at 100 operating countries, we’re running business processes for them, we’re running IT enablement is under that.

(18:16)The way it works successfully is when there’s a clear mandate from center, to act and to action and to mandate standard. There’s local enforcement as standard, and then there’s automation and management and monitoring of standard; we do all of those things, and that’s viable from the security agenda that we were touching on earlier.

(18:36) But to allow sufficient flexibility, there is a fine balance and I’m finding it already is as we roll out additional security arrangements that are in our organisation. There is a fine balance between encouraging the creativity and mobility and freedom, which I think the modern generation has grown up with IT. They have an expectation and entitlement to this, at the same time as governing from an enterprise perspective the overall risk, security etc.

(19:04) And that balance is something I think is going to get harder to deliver to a business that feels under pressure to demonstrate cloud and innovation and you know, the newest aspects of go to market.

(19:17)And so CIO has a very careful governance role to ensure that we don’t leap before we’re ready, but then when we do leap we leap progressively and along the way.

Vala:   

(19:26) Staying along the same theme of going into the future and retiring the past. I believe it was earlier in the year, ATOS, a company with nearly 100,000 employees has said that by 2014 they would abandon email completely, and use social collaboration technology to communicate within their enterprise. Can you give an example if you can fast forward to maybe 3 to 5 years or at the end of this decade, what are some of these technologies that you would vision is it email, is it on premise datacenter versus a SAS cloud base solution. What do you envision companies retiring as they transform their business to a more innovative organisation?

Andrew:          

(20:12) I think businesses of the future will use existing platforms differently but migrate through time, so email as an example. Email has been classically used and overused as a communication vehicle, and it’s become progressively less and less effective. Push email of that nature does not fit in which the way individuals now sells data and collaborate.

(20:38) So knowledge exchanges, social collaboration, environments where individuals connect on ideas and threads and follow each other becomes the way to now insert corporate communication and to and to land a bit more effectively in the lines of the user’s, and that’s what we are doing.

(20:54)So I think email will be used less for a less wide range of activities – just as the telephone has been. The telephones do not ring in offices now, because social collaboration indicates who’s on your call, who is available to call, and you call people when they’re available. So voice messaging and things of that nature I think are also becoming a thing of the past as well.

Frank: 

(21:21) I would add specialized devices. I think the phone is a great example of a specialized device that we don’t need any more. I think we are going to see more and more of those things show up on individual your cellphone or your laptop. Software takes over the world and I think that’s been pretty obvious for a long time. So a lot of specialized devices are going to go away, the phone is already is an example Andrew.

Andrew:          

(21:48) Then I think at the other end of the spectrum the expectation of what technology was to offer, so like Facebook and YouTube and Twitter, we are all very familiar with the capabilities that those services offer. The enterprise needs the equivalent but with additional security and containment. And any application service or proposition that I take the business does not have those collaborative components is going to fail. So as an example I would take the communication one a step further.

(22:20)We’re no longer going to broadcast out long emails with, ‘by the way, what’s happening this week.’ We have a channel, which is a TV channel and bite-size chunks of media where we can focus messaging that people can configure and look at as a TV channel. And that’s a way to get the message home to a workforce, who will then draw on that content when they need it, where they need it and through what mechanism they prefer to use it.

Frank: 

(22:47) In effect let me just build on that for a second, because some of the stuff we have we kind of forget we have. So for example we have two soon to be three broadcast centers, where we can plug together any number of locations around the world and also stream to the web at the same time.

(23:11)So our CEO can get in there and speak to a small group, a large group, he can have interactive audience. Other executives can use it and you can really be anywhere in the world to use that and it streams out to the web. And I talk to other CEOs and they are kind of like, wow why don’t other companies have that? The technology is right there.

Andrew:

(23:34) Bringing in yet another dimension of always on, because now we’re TV channel and we’re TV content, generator and broadcaster. And the expectations of the video always working and the TV always being there are very high.

Michael:         

(23:49) Gentlemen, what do you do on the business side because you’re talking about the introduction of technology – again across this very large organisation. And so what are the cultural attributes and the changes that you have to drive to ensure adoption on the business side.

Andrew:          

(24:13) Accenture is a very adoptive culture. It’s demographic, it’s technologists that like technology, so we have that advantage and it can be an overdone advantage because we can have very rapid adoption which is why we find ourselves demonstrating scale in the industry which it is difficult to find other examples of. So we will often be leading edge in terms of scale, performance, and load and proving these technologies are at the scale perhaps beyond which they have been proven before and that is definitely a dynamic.

(24:44)And I think we have a very adoptive leadership culture as well, so we’re not just talking simple internal little broadcasts. So we routinely work with the industry analysts, we routinely work with clients. We introduce clients to our global capability and not by everybody getting on planes, but literally by providing a window to our locations in Asia-Pacific particularly.

(25:10)And all of this is enabled on a backbone which we’re both managing and providing the content. So it requires back to my theme earlier and always on mentality very much like a TV network.

Michael:         

(25:25) I’d like to just invite people who are listening to submit questions. We’re joined today by Andrew Wilson, who is the CIO of Accenture and Frank Modruson, who is the retiring CIO. So if you’re listening, this is just an extraordinary to ask these gentlemen questions, and I also want to very heartily thank SAP for sponsoring this episode.

Vala:   

(25:56) Question to Frank, you know more and more you hear potentially the chief executive in the enterprise that will champion this adoptive culture of what you spoke about at Accenture. Is the chief digital officer, not necessarily CIO all or the CMO, but what appears to be a hybrid role of the two.Whereby this individual is really focused on transforming the business on the mobiles, social, cloud, big data, application economy, and overall user experience. Is there a CDO at Accenture, and if not is it the CIOs role to really champion this adoptive culture that you speak about?

Frank: 

(26:47) First off there is not a defined role as a Chief Digital Officer. We believe every company has become is already or becoming a digital company, a digital business, so I think that’s real.

(26:58) I would tell you that here and in turn our CEO does lots to sponsor the adoption of some technologies, particularly video, desktop communications and he’s out there on blogs, on social etc. But he’s one person. He’s a senior leader but he’s one person. Our group chief executives for our different industry groups do the same thing. Head of technology – same thing. So you can’t get this wrapped up in one person, it’s really the tone from the top, that cascades down to their leadership, which cascades down to their leadership, which cascades down to their members.

(27:36) In fact, one thing we’ve found that is quite interesting or at least to us, is the gamification of adoption of technology. One thing we do, we have a group called our global leadership Council which has the top 150 or so leaders of Accenture.

(27:53)When we get together with them and we do this with other groups as well, we have all these stats of whose blogging and you know posting stuff is how much video minutes – whatever. We have stats, and we put them up. And invariably everyone is curious on the leaderboard of where they stand. They come over and they look at it and like, ‘wait a minute, there is no way I’m behind that person.’ And it becomes like competition and it’s amazing how engaging; they can’t what by the leaderboard and it has everybody’s name on there and they are like, ‘wait a minute they are ahead of me in audio, but and I ahead of them in video’.

(28:40) It’s actually quite interesting and we’ve taken to adding a little ribbons and awards that go around their people’s page if you get over you know, 1000 minutes of audio or video, or 2000, or 3000 – you can see them when you look up people and it’s become kind of important and that’s beyond the hundred and 50. That’s the 275,000.

(29:01)It’s amazing how this happens right, it builds on itself. So if you’re expecting one person to get the job done, it ain’t going to happen.

Vala:   

(29:09) What an amazing…

Frank: 

(29:11)By the way Andrew is a little competitive in this these a – where are you standing Andrew.

Andrew:          

(29:17) I’m currently number three in the company. I’ve just overtaken number four and I’m well ahead of Frank.

Michael:         

(29:26) Just in case anybody was wondering.

Vala:   

(29:29) Well I would have thought just by the number of monitors around you that you would have been in the top three.

Michael:         

(29:35) So Andrew, how many monitors do you have there?

Andrew:          

(29:30) I have six monitors in my home office and I use it for a combination of work, but I also have an interest in broadcast technology in video editing, which goes back to my time in the UK as a student when I worked on radio and in television.

(29:54) And one of the interesting things – and actually one of the things that I like to think has helped me step up to the CIO is that it is a coregent of broadcasting technology and IT technology, which I think will be illustrative success for the next five or 10 years. And it’s another reason why I was very keen to step into Frank shoes.

(30:15) My friends duties me on the number of monitors, but I enjoy them and of course there are three behind me and I’m looking at three in front of me right now.

Vala:   

(30:25) But you must have again it is amazing to me that there is 270,000 employees in a $29 billion company has such a great open transparent culture, where you can gamify you know blogging and social collaboration. Can you tell us when did you introduce gamification, and is it true unless you have a very open, transparent, accountable culture gamification could be damaging to your business if it’s not done right. Is that a fair statement?

Frank: 

(30:57) You need to be careful how you do it, and we dipped our toe in the water – I want to say it’s got to be two years ago may be a little bit more – I’ll defer, I just don’t remember.

(31:11)We’ve been doing it for a while and we kind of rolled it out in kind of little waves. We started it with a small group, put the numbers up and we found out how much people kind of came over to see what it was about and wanted to know about themselves. And we said, wait a minute, they’re interested in this and we kind of built on that, and we don’t try to embarrass anybody. Right, these are the numbers right, you know we’re not trying to make it you know – and we try to focus it on the top end of the numbers.

(31:39) Right if somebody asks where they stand will show that and the stuff we display is high end. The addition has been really focused on what you’ve accomplished not lack of what you’ve done. Right, so we try to make it a positive thing right, focus people on the future, focus on where we’re going and it’s worked out well.

(32:00)You know, these are funny things and you’ve got to be and you know our culture is open to it. It works well we have a very… Go ahead.

Michael:         

(32:10) Sorry I was going to say we have a question from Twitter, our friend Warren Bruxelles, who is a reporter at CIO magazine asks, do you use gamification for employee training?

Frank: 

(32:31)That is a good question and I’m not sure I know the answer, Andrew, do you know – and trying to think if we use it with training or not. I think we do, I think there are some things where we try to get people to adopt stuff and I’m trying to remember the example.

Andrew:          

(32:45) I think it’s in the formative days, I don’t think it’s a major theme of training. There is a lot of technology enablement in training and it’s all done remotely. There are quizzes, and one has to get a score and there is some prompting element there. But I don’t think that’s true gamification in the way that Warren is looking for.

Frank:

(33:06) Yeah, but there is some stuff we did on the portal where you could identify leaders and you had time to do this. I’m trying to remember – I thought there was a training class who picked up on that. Andrew is right, we’re in the early days of exploring it over into training, but we have been pushing on this and actually someone pinged me, about three years.

Andrew:          

(33:26)We’re using modern technologies I think to embed almost higher order concepts than individual training topics. So we have some cognitive way, which comes with certain iconography and including a greater than sign, and once you embed that in the coaches DNA of a company.

(33:46)So what we did is we ran a global photo competition, where photographs could be submitted electronically, and where we have encouraged creativity and innovation and got some beautiful artwork which we could publish internally each year. And by the way we communicate the Accenture way through this process.

(34:05)So at the moment I would say that form of competition and enjoyment is being landed at a higher level of individual training courses.

Frank:

(34:13) Yeah Andrew, I’m getting pinged by some of our guys quite a lot and they have given me examples of where we have used this in training. So you and I need to get caught up.

Michael:         

(34:31) The folks on the ground are not going to let you maligned their training.

Frank:

(34:36) Well, this is the new world; we are doing a live interview right, we’re stumbling around trying to remember where we’ve used it for training. The head of infrastructure has pinged me, one of our guys in performance pinged me, one of our comms - geez I’ve got four or five different people you know, John, Ursula, Vid, Kevin

Andrew:          

(35:02) So it’s clear that Frankie and I need to visit Accenture lab and also play the X factor equivalent of security as well.

Frank:

(35:11) Video game – jeez, they’re all over this. I’m getting the URL to go and do it.

Vala:   

(35:18) You have just earned a ribbon for learning about the training use within the company.

Frank:

(35:24) How about embarrassment – there we go. No but it’s all good right. We got the right information like that, that’s the new world.

Andrew:

(35:32)It’s illustrating a very flat open culture. I’ve got the same windows around Frank, people feel an opportunity to reach out real time, simultaneously and that increases the pace. It increases the pace of our business development work and the work we try and deliver every day and the way that we can refresh ourselves. And yes, it also means it challenges the leaders to enable all the time as well.

Michael:         

(36:02) And I think for folks and organizations who are watching who are you know bound up in silos, silos between IT and marketing and other silos for example, it shows how with the right culture and the right technology together, it can just as you said flatten the organisation and break down those silos to enable what we see – real-time communication – we are seeing it here.

Andrew:          

(36:32) Frank was describing our digital agenda earlier, and I mean to say that just one organisation and our website would be patently ridiculous. We enable the website, the marketing also sets the brand, but that interlock around a business process and activity, which frankly spans the firm is a good example of many.

(36:52) I believe that the CIO’s agenda is going to be richer in that in the future. The CIO will no longer be an audit taker to say give me this functionality and deliver it to a cost and budget within six months time. It will be to be directly there and present in a much more evolving real-time world, and that’s another reason why I think things are going to accelerate and change in the next few years.

Frank: 

(37:17) I would also add to build on a point here, when you think about that some organizations are not open to it, I don’t know how they can’t be. Number one, when you’re at university and you get extra credit for class participation, the reason was it made for a better class.

Michael:         

(37:36) Yeah, but may be time hanging out with the wrong crowd, but the stories that I hear inside some organizations are frightening. The boundaries that exist and the difficulty crossing those boundaries, and the politics that prevent innovation because there’s you know, there’s intellectual hoarding and so forth, which is the antithesis of the kind of real time sharing information that you just demonstrated.

Andrew:          

(38:05) Organizational readiness for change is the number one barrier along with the achievement of business case for getting things done in most of the client organizations I’ve worked with. I was referring earlier to a time when I was in business process evolutions. I mean we were applying change in 100 operating companies at one point, a very global manufacturer of consumer goods and it’s okay for Accenture to decide something. But for 102 operating companies to adopt it often, you know changing things that have grown up as customer practice in that country, and all of the politics of a global world and the few that exist.

(38:47)The actual technology is arguably the easiest bit, but the adoption of the business readiness and then the operational control for that as a real challenge, what makes global transformational change much harder than simply deployment.

Vala:   

(39:05) As we talk about different lines of business, and one certain function that is going through massive transformation, and I know this first hand is the marketing function within the enterprise.

Michael:         

(39:19) Yeah, this guys a CMO so feel free to poke at him

Vala:   

Know, there’s no way.

Michael:         

(39:28) That’s right, that’s what we are talking about.

Vala:   

(39:30) Andrew and Frank have demonstrated in half an hour how collaborative they are, so I’m fairly certain I’m not going to get poked from our CIO all guests today.

(39:37) But Accenture just did a research study in terms of defining best practice related between CIOs and CMO’s. I’m interested Andrew in your new role, how close did you work with the CMO at Accenture, and based on your research on clients is there a tension between CIOs and CMO’s? I keep reading, in fact today in CIO magazine there was an article, where the CIO ultimately reports to the CMO., So talk to us a little bit about both of your relationships with marketing at Accenture.

Andrew:

(40:13)From our perspective the CIO works with the entire business, and it will never be a case that the CIO works with one function. I think that would be a massively retrograde step, because finance and business development and other functions that have huge responsibilities in any agile enterprise in the future.

(40:33) But I think any CIO that thought that the CMO interlock and liaison wasn’t anything other than mission-critical would be to not enrolled that one, particularly in the digital age of today. We do work extremely closely, and actually it’s the marketing function that represents some of the most adoptive of our user base, and demanding our user base because there is a combination of creativity in the technology world and technology organisation.

(41:01) And so it’s unsurprising that a lot of the marketing based events etc. are some of our biggest users and our most stressed users in terms of the technology that we provide.

Frank:

(41:12) Yeah, I would agree with that and I would say over the years they have actually been very demanding, is very articulate about their demands and incredibly fast-paced about what they need. They are very analytical and the technology just fulfils the analytics side of it, so I think there’s been a really wonderful move in marketing over the years, and we have a great caring relationship. But I think as Andrew said, is also correct that we serve everyone.

Vala:   

(41:38) Who runs the web at Accenture? Is it IT, is it marketing, is it a collaborative committee, and I ask specifically about the web because according to Gartner, CMO of 1700 CMO’s, is that the corporate web is the number one spend in terms of digital priorities. So I’m wondering do you agree that the web and the user experience is really driving the spend in marketing. And at Accenture, your whole website is that something that IT owns one marketing, or across the whole group?

Frank: 

(42:14) Andrew do you want me to take that one or do you want to take that one?

Andrew:          

(42:17)By all means.

Frank: 

(42:19) Well basically we only technology and rebuild it working with them. They put the content out there. They are responsible for the content, we’re responsible for the technology, but it’s a collaborative undertaking          . And by the way, one of the things we’ve learned is that they set the bar very high. And in fact Andrew, one thing I was reflecting on we believe that the world, Andrew and I have been talking a lot about how everything has to be always on. You know who asks for always on before everyone else? Marketing.

(22:53)Interestingly enough, they saw the future before we saw it in some regards. So you know I think you have got to have that give and take to really have a successful outcome. We build the technology, but it’s working very closely with them.

Michael:         

(43:09) As we start to wind down the show, which I hate to do because this has been an incredible discussion. Can you give us a sense of – let’s maybe offer advice for CIOs who’s organizations are not how do I say it, not quite as innovative as Accenture, and maybe IT is less of a focus. So for those organizations, what can the CIO do to gain a better understanding of the business, and at the same time help ensure that the business has a greater appreciation for the transformation potential of IT in driving business improvement.

Andrew:          

(44:01) Any CIO needs to understand fundamentally the business that it is serving. And so it’s unsurprising that in fact I’m the business leader who has now stepped into CIO. Because as we’ve said earlier in this broadcast is that every business is a digital business and the CIO needs to make that so and make it clear to his executive colleagues, the value and the benefit it can bring, and how mission-critical it is also how vital it is to stay in business.

(44:31)So the audit taker, back-office, cost centre, I’ll make sure that email that is long gone. So a CIO for today and a CIO for tomorrow is an internal consultant. It’s an orchestrator of the various technologies that integrate. It’s a coach, it’s a consultant bringing innovation and ideas to the business saying, do you realise you can do this? Do you realise that you should do this, do it in this order, and don’t do this because of this pitfall. And I can say that because I’m one of you, but at the same time I have an understanding what the technology ecosystem now can deliver.

(45:08) So how about trying this? Technology will glue businesses together more and more fundamentally in the future, and that place is the CIO which is a hugely powerful and influential role. The question is, does the DNA who has grown up to become today’s generation of CIO. Do they adapt to that, and can they navigate that world? Can they adapt to the social enterprise? I suspect in five years time will be reading books about the success traits of those who did and those who didn’t.

Michael:         

(45:37) And Frank any thoughts, you’ve been CIO at Accenture now for 11 years as you leave that role. Any thoughts on advice that you can offer to CIOs who want to emulate the experience that we’ve been discussing today?

Frank:

(45:54)Well I think the point is that Andrew just made are spot on and if you think about it, the world is constantly changing. You have to change with it, you have to embrace the change. I think we all know the individuals who doesn’t have a cellphone or doesn’t have you know, streaming on demand or doesn’t you know, didn’t move forward with technologies – these are the exceptions.

(46:17)The same thing is happening in business. Can you imagine a business today that doesn’t have a website? They are out there, but if you are not becoming more and more digital, someone is going to come by and the technology software, someway somehow is going to eat you up.

(46:39)You’ve got to keep moving. That’s the beauty of technology. It keeps getting better so we can keep doing more things with it and automating things, and taking friction out of business. When you think about your own experiences as a customer of a business, friction is a pain in the neck. No one likes it.

(46:54)Remember your customers don’t like it. Think about your end customers, think about your own people, your employees. The world is changing. It changes very quickly and I think right now we are on the prophecies’ of a new wave of technology that will revolutionize the enterprise. The last 10 years were more consumer centric. The 10 years before that were more enterprise centric. I think we are on this wave – and we’ve talked about some of them today, it’s all coming together and we are probably only a year or two into it and the landscape is going to look completely different in 10 years.

(47:30) No question about it. Embrace the change. It’s going to be a wonderful ride.

Michael:         

(47:35) Well this has been an extraordinary compensation.

Vala:   

(47:40) That was the fastest 50 minutes I think we’ve had on our show.

Michael:         

(47:41) You know the thing that struck me may be the most is when we were talking about gamification and training, and you talk about real-time information.

Vala:   

(47:53) What I love is the innovative ways at Accenture here that they are empowered enough to send their understanding of the business – the two top executives who are running technology at a 275,000 organisation.

Michael:         

(48:08) And basically say, hey guys here is what we’re doing.

(48:15) Well this has been another fantastic show. Vala as always.

Vala:   

(48:21) Thanks very much and also I would like to say thanks to SAP for sponsoring today’s show and Frank and Andrew, you were brilliant thank you very much for joining us.

Michael:         

(48:29) We been talking with Andrew Wilson, who is the present CIO of Accenture, and Frank Modruson, who is the retiring CIO of Accenture, and who’s been there for 11 years. And gentlemen, we can’t thank you enough for joining us and spending the time today, it’s been a wonderful discussion. And everybody who has been watching, I hope you will tune again next time and we are going to have another great show. Thank you very much and have a wonderful weekend, bye bye.

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