Accenture drives digi-innovations via worker seed funds, small acquisitions

The IT major has received 13,700 ideas from employees at its Indian technology delivery centres

Global information technology major Accenture Plc has started funding innovative ideas from employees on emerging technologies to drive faster growth in the digital segment. Aggressive innovation moves such as $2,000 for best ideas can outweigh Indian peers in gaining digital revenue.

The IT major has received 13,700 ideas from employees of its Indian technology delivery centres on digital technologies such as design thinking, machine learning (ML) and the best ones are being implemented for its customers across India and global markets. The two key themes for these ideas were disruptive businesses and Digital India.

Accenture has started offering $2,000 for 40-50 shortlisted ideas to turn them into prototypes.

Accenture, which is aggressively looking at technology-led growth through acquisition of small firms, spent nearly $900 million in the past two years in employee education and driving innovation in emerging technology, said Mohan Sekhar, senior managing director, Accenture Technology Services.

The company currently generates nearly half of its $35 billion revenue from digital technology services.

"What is really inspiring is the culture of innovation, right from the top to the bottom of the organisation. 13,700 ideas and average 3 people contributing to an idea mean 40,000 people are contributing. Our journey is all about rotating to the new; we define 'new' as digital, security, cloud and they now form 50 per cent of our revenue and to do that, innovation is at the heart and soul," said Sekhar.

While the first year Accenture saw 2,000 ideas coming from employees, last year the number went up to over 13,000 ideas, involving little less than one-third of its Indian workforce.

The digital revenues of Accenture's Indian peers such as Tata Consultancy Services (TCS), Infosys, Wipro et al do not seem to show such faster transformation.

Largest Indian IT services firm TCS, with as strong a headcount as Accenture, has trained nearly 200,000 employees in digital technologies even as the company's digital revenue stands less than 20 per cent.

Vishal Sikka-led Infosys, the country's third largest IT firm, claimed that 140,000 out of little less than 200,000 staff were trained in design thinking. The company's revenue from emerging tech services and software was nearly a billion dollar in two years.

Wipro, having digital revenues similar to TCS at less than 20 per cent, has taken the acquisition route to add people with cloud technology skills apart from training its employees.

What probably keeps Accenture ahead of its Indian peers is the "governance of innovation" apart from infusing a culture. "Senior executives in India are measured based on how much innovation they are driving across their teams," said Sekhar.

Raghavan Iyer, head of Innovation, Accenture Delivery Centers for Technology, said the culture of innovation and pivot to digital is as real as grooming employee ideas with fund and mentorship or taking client problems as a challenge. "We give $2,000 [for] every team (selected ideas) to give life to their ideas... sometimes we bring start-ups to help with prototypes."

Analysts say factors such as deep-rooted culture of innovation, fast mover advantage in digital stream give Accenture an edge.

"This is a good approach. They've taken their training investment and applied some of it towards innovation. The idea is to foster innovation, retention, and also co-creation with their employees," said Ray Wang, principal analyst and founder of Constellation Research.

The greater objective is to empower their employees to come up with innovative ideas and drive a cultural shift, said Rajesh Gupta, India partner at IT consultancy firm ISG. "Indian peers may be doing this innovation at a small scale." 

Peter Bendor-Samuel, chief executive officer, Everest Group, global IT research firm, however, said Accenture's Indian peers are catching up on innovation but the company has stayed ahead by acquiring firms to drive changes.

While Accenture spent more than $1 billion in the acquisition of small firms, last month it announced plans to invest $1.8 billion in acquisition in the following financial year (FY) i.e. FY18. Accenture's FY ends on August 31.

"What sets them (Accenture) apart from their Indian competitors are not the programs, which companies such as Wipro, TCS and Infosys have also adopted and in some instances been even more aggressive, but when the early lead they gained by being the first mover and establishing industry credibility from this early mover role. The second big thing they have done is that they are far more aggressive in buying digital firms, which bring with them the IP and innovations," said Bendor-Samuel.