Key
Problem
In
the Accenture study, Andersen Consulting separated themselves from Arthur
Andersen, their parent company, in 2001. Andersen Consulting changed their name
to Accenture and rebranded their organization. It was clear that Accenture
needed to rebrand their IT infrastructure and that Accenture was allowed to use
Andersen’s technology for only one year. There was a bigger problem as Andersen’s
technology had several issues: 1) a legacy system that didn’t interconnect well
with each site, 2) obsolete software platforms and 3) no global infrastructure
with accounting and human resources software systems. Overall, the key problem
was Andersen’s technology was obsolete and it required Accenture to create a
new IT infrastructure in a short amount of time.
Assessment
of the Three Alternatives
The first alternative is to use the
old legacy systems and software system programs that Andersen was using. Each
country would use its own platform and to continue to have difficulties with compiling
data in a timely fashion. It is evident that archaic software system would only
continue to hurt the business due to its complex solution. Overall, this
approach of using Andersen’s product is the least attractive method and would add
no value to the company.
The second alternative is adopting
best-of-breed approach. The best-of-breed approach has several pros: The most
up to date applications and more depth and functionality than peer functionality.
There are several cons for implementing the best-of-breed approach:
The
cost is a major concern as there would be numerous applications that would
require additional headcount in specialists and an increase in training. I
don’t recommend the best-of-breed solution, as it too risky with numerous
applications and high expenses. I am looking for an IT solution that provides a
less complex solution, which is one of your requirements.
The third alternative is a
one-platform approach. The one-platform approach would resolve the problem of
the Pareto effect created by the company’s requirement where there would be
less complexity with multiple solutions.
SAP has the capabilities of having a one-platform that provides
financials and HR applications. It would be accompanied by Microsoft software
and HP and Cisco hardware. Accenture has done a superb job on using Microsoft
Visio with a timeline (See exhibit 3). The visual shows the IT transformation
program timeline for the last ten years and the significant improvements that
were made. There are two options within
a one-platform approach: Cost Center and Running IT like a business. In my
opinion, a cost center is outdated and doesn’t provide value for the company. Also,
the term cost center makes employees in that department feel like a liability
or feel like a “cost” rather than asset. IT running like a business is better
approach as it has advantages especially in its e-mail infrastructure. The new e-mail
infrastructure is a managed service approach and wouldn’t have high costs in
increased storage space and IT staff.
Recommendation
After
reviewing the three Accenture alternatives, I would recommend the one-platform
approach. In my opinion, SAP would be the one-platform worldwide application.
It would be accompanied with Microsoft software and HP and Cisco are the
hardware providers that would enable Accenture to run as one global solution.
SAP would add a significant value in the long run for company that was uncommon
at Andersen. There is a significant
amount of pros: 1) Integration & consolidated financial statements 2)
Global cash flow and 3) Integration of HR applications.
The
first pro is the integration of financials. Andersen’s weakness was integrating
financials, causing headaches for financial users. The integration of
financials creates an easier and time effective workflow for the day to day
users. Andersen had a major challenge to reconcile financial data in a timely
manner and the consolidated financial statements will save a significant amount
of time. The SAP consolidated financial statement will give the CFO and the
finance team a clear understanding of the business (1 P/L and 1 Balance Sheet).
Also, the consolidated statement will give the finance team data to focus on
challenging areas on where the company can improve on expenses globally. The second pro that SAP provides is a global
cash flow, which is imperative for the Treasury department. A global cash flow
will enable Accenture to prepare a global cash forecast, which was too complex
at Andersen. The third pro, the SAP HR
application, gives visibility for entire company. The HR applications solution
will give the HR director and staff a global visual for headcount, timesheets, new
projects, and healthcare benefits.
IT
Governance
I received the memo from the
Accenture Chairman in regards to adopting the Control Objectives for
Information and Related Technologies (COBIT). COBIT’s business framework
provides the governance and management of enterprise IT[1]. COBIT’s
benefits are the following: maintain high-quality
information to support business decisions; achieve strategic goals and realize
the business benefits; achieve operational excellence through reliable,
efficient application of technology; maintain IT-related risk at an acceptable
level; optimize the costs of IT services and technology; and support compliance
with relevant laws, regulations, agreements and policies[2].
Your current practice is projects must be approved through the IT committee
team showing a Return on Investment (ROI) analysis. Once a sponsor’s project is
approved the project has to be audited three times a year. Management has to audit
the projects and they clearly don’t have the time. The manual input and time
from managers is an area where you can approve if you chose COBIT. In Exhibit
7, there is a plethora amount of tedious work that is being done in the
executive level which COBIT can accommodate. COBIT’s global experts support
your goals with the following: information
security, intellectual property protection, compliance assurance, business continuity
and risk management[3].
I can prepare a ROI analysis with more data and resources. The ROI shows the value
and cost savings that Accenture will have. Overall, I recommend COBIT as the
new IT governance, as this will eliminate the manual work that needs to be done
by the business sponsors and managers.
IT
Transformation Results
In
Exhibit 8, the IT transformation results are outstanding. Accenture’s went from
$11 billion in revenue in 2001 to $21 billion in revenue in 2010. The increased
revenue can be contributed not only to the hard work of dedicated employees but
also the IT infrastructure. The percentage of satisfied sponsors went from 67%
to 87%. There are major IT expense reductions in the last ten years that make
the Accenture’s transformation a true success: 1) IT spend reduced by 22%, 2)
IT spend as % of revenue reduced by 59% and IT spend person reduced by
69%. It is unbelievable that Accenture
added 100,000 employees in 10 years and reduced IT spend. This is a truly an
amazing accomplishment and an excellent achievement to add to the CIO’s resume.
It is evident that SAP is the one technology platform that raises the bar for
Accenture’s IT infrastructure. This is impressive and remarkable that a company
can make this progress and cost reduction in ten years. Well done to the
CIO!!!
Final
Thoughts
It’s
imperative for Accenture consultants to have the most updated technology as 75%
of the employees spend time outside of the office and traveling to client
locations. These road warriors need an aggressive advanced technological
platform to meet a high level of customer service. SAP, along with Microsoft as
the software provider and HP and Cisco as the hardware providers, are an
excellent fit for Accenture. The three products meet the companies’
requirements with less complexity. The reductions
in IT costs in the last 10 years are outstanding and the CIO has provided SAP as
the perfect IT fit with a one-platform solution. I wouldn’t look anywhere else,
as SAP has proven itself as the “number one-platform” with an excellent financial
solution, technological service and human resource applications.
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