Accenture Looks Set to Bet Big On Disruptive Digital Technology

Growing demand for new technology has set Accenture on a course to invest heavily in digital business, with digital services such as cloud and security accounting for 40% of the company’s revenue in 3Q16.
In a recent conference call with analysts, Accenture’s Chairman and CEO Pierre Nanterme disclosed that he was finding more demand for consulting services than for outsourcing.
To cope with the competition, Accenture has launched its own automation platform called myWizard and is focused on building cloud platforms. The company says one of its cloud platforms – which helps pharma companies collect, share and analyze clinical data – is now being used by seven top pharma companies, including Pfizer, Merck, GSK and Lilly.
Nanterme said more than 200 of his clients were using myWizard to drive productivity improvements, adding that the shift to the disruptive technology is ‘happening at a big scale.’ “The most significant part of our growth will come from digital-related services because this is our strategy, first and second, this is where the demand is.”
During the third quarter, Accenture spent roughly $835 million acquiring as many as 11 companies, bolstering its consulting business. In fact, the company said 54% of its $9.1 billion in new bookings during the quarter were for consulting services.
It bought a majority stake in IMJ Corp., a full-service digital agency based in Japan, and acquired OPS Rules, a small analytics consultancy based in Waltham, Mass. “We acquired OPS Rules to expand our capabilities in machine learning, supply chain and operations analytics,” Nanterme said.
Another of its acquisitions in the quarter was Israel’s Maglan, which boosted the company’s cyber security portfolio.
Accenture hopes that next wave of demand for new digital solutions will come from the financial services industry. “We see a lot of potential in what we’re calling automation to create more automated processes, bringing virtual agents to provide financial advisory services. So that’s the path which is creating some momentum,” Nanterme added.
Geographically, North America has remained the major source of its revenue, but its revenue is rising in emerging markets too. For the third quarter, even its Mexican unit posted what the company called “strong double-digit growth.”
However, Nanterme conceded that the company’s growth in Brazil is slowing down. “We all know what’s happening in Brazil. This country is important for us. We are growing in Brazil, but of course we’re growing less in Brazil than we used to grow in the past,” he said.