Accenture CEO Gives Strategy for Digital Transformation

I'm joined here by by Pierre Nunn teram he is chairman and CEO of Accenture the global company really that is consulting but so much more so welcome here great to have you Bloomberg good to be here one of the things we hear from every single company we talk to is digital transformation everyone's going through some version of that in some way you're in an unusual situation in that your company Accenture has been going through that and advising other companies how to do it what have you learned from your experience that you can apply to your clients I mean indeed this is very true and by the way a lot of CEOs are calling me to share my experience in term of digital transformation because we started in 2012 so a bit ahead of anyone else when I look at what has been for us very important who first you need to be extremely deliberate and set Stratego for us we wanted to have more than 60 or 70% of our revenues by 2020 in the new coming from less than 10% so we set a very high bar I mean second it's important to do your digital transformation across your different businesses what would be I guess inappropriate would be to set the digital part in a kind of factory where there is the good digital part and the bad core which which is wrong from from my perspective and you need to get the digital transformation pervasive across the different business units and finally it's all about alignment if you want to drive your digital transformation you need to rely first your leadership your board so at the top of the house so they understand what's going to be the game you need them to align your people a lot of communication a lot of big motivation and explanation and align your investments so for us we put under it percent of our investments behind our transformation and not spread your investment across too many things so you start by saying deliberate in forming your strategy how does one be deliberate in this world that is changing so fast I mean every time we open up the newspaper there's some different digital gizmo available to us some different way of approaching it don't you have to adjust a fair amount along the way I mean you need to adjust but by deliberate I mean you need to understand where you are for instance if I'm taking professional services part of our industry was commute izing quite rapidly in terms of services and I'm thinking about the offshoring or some type of technology work so what we figure out is what it is in what kind of business we want to be we don't want to be in any communities in business which is the case for all the industries and we want to pivot to high growth high value areas then we selected very deliberately this hairiness interactive mobility analytics cloud security and we pivot all our investment all our skills all our strategies behind these five digital capabilities and then you need to navigate because the art of leadership for a CEO is navigating around the block so understanding which technology are ready for what I would call climb time and so you need to invest here and now and take the benefits and which technology is going to come in one year or in two years and this is where we are advising all clients so you use a key word invest how do you make sure it's an investment rather than a cost and go back to something you touched upon actually with commoditizing there's a lot of companies that say why don't we find some very inexpensive programmers in Eastern Europe in Asia someplace like that is that a wrong approach it has been a good approach and certainly the name of the game between 2000 and 2010 but then that's something at some point in time it's gonna be hard to find cheaper people if you will the labor arbitrage will get to a limit so when you get into a limit in term of liberal arbitrage what it is you're looking for productivity from technology which could be much more sustainable and much more robust of our cycle so now it's less about labor arbitrage it's much more around productivity efficiency which can be brought by robotic automation artificial intelligence exactly how do you say to a CEO and how did you make sure it was true for you that investing all this money because it's expensive it's not cheap to go digital will actually be an investment in increased productivity reduce costs or increase sales because that's after all you have to have some combination of that to be successful yeah first you need to have clear performance and measurement measurement system so at Accenture we measure everything we measure the return the investments were making and are we making good money out of it and then second it is extraordinarily important to be selective in the investment you're making so you need to look at the opportunities if you will and then understand what we're calling the brilliant basics the kind of technologies you need to apply a right now because they are proving rubbery process automation is part of this in interactive experience website improvement ecommerce you have some proven technologies that going to drive revenue up and cost down and then you have the more pioneering leading-edge cutting edge and this is where you need to be extremely thoughtful certainly work with people like us Oh others in order to understand where these technologies got to be mature enough to drive the benefit you expect so thoughtful and selective to words they use their talk to talk about Accenture Froman because you invest a fair amount you're not you're not sheepish about making investments as I understand a few years ago you for example embraced the cloud turns out you were right you were ahead of other people there right now you're going big in artificial intelligence for example how do you pick the right things to bet on so that you're right because you can easily invest this on like that and it ends up the way of an 8-track stereo yeah I mean we are we are significantly uplifted our research and development department led by Paul Doherty or chief technology and information officer and on the other end Omar about his strategy officer they're walking together in understanding what are these opportunities and then the first and we're investing 700 million dollars in R&D 700 million 700 million dollars in research and development the job of these guys is to understand these technologies and how they're going to impact the business moving forward and then we are incubating we are trying to find a use case because you have a lot of technologies when you don't have still a business use case because they are not prepared already o scalable or having the right or reliable so this is what we've been doing when we selected all the in if we really Accenture interactive is going to be well about six billion dollar and in seven years we created the largest digital experience agency in in the world so by being very selective the same with a cloud the same with the cybersecurity and the same with applied intelligence and analytics and now what we are doing is already anticipating the next wave so we are incubating technologies such as blockchain immersive realities quantum computing we are we string they're not yet ready for the big scale game but probably in the coming two or three years they're going to be very important so it's about being extraordinary focused extraordinary selective and be a bit programmatic around the deployment of this new technology so take all of that you've done Accenture how the translate into benefits to your company in your shareholders and how do you measure it do you look at revenue do you look at profits how do you measure it we have a very clear financial roadmap we are sharing with Dennis that my investor day this morning and we've been sharing which is first we want to grow our revenues more than the market so gaining market share our growth have been if you get the kegger over these last year's in the range of nine percent local currency seven organic to inorganic consistently so we would probably be growing more three times the market than that anything else second is indeed the return we want to expand our margin while keeping enough money to invest in the business so we're returning with a modest margin expansion and we reinvest in the business and then we are returning a lot to our shoulders in form of dividend and share buyback so all of this is extraordinary transparent we are showing that with our investors and I guess so far our investors been pretty clean should say okay appearing on time really great to be with you today he's the chairman and CEO of eccentric

Channel: Bloomberg Markets and Finance

Views: 95,326

Rating: 4.8546777 out of 5

Keywords: Bloomberg

Id: i6nTpuKbSA0

Length: 8min 35sec (515 seconds)

Published: Wed Apr 25 2018