Accenture Business Journal for India Shaping the Future with As-a-Service: Transforming businesses with a new approach to boosting profitability and productivity
For many companies in India, improving business productivity achieving maximum output with minimum input, without compromising on quality is an ongoing effort. With businesses operating across geographic boundaries and serving increasingly diverse customers, efforts to enhance productivity have become more challenging than ever. Digital technologies cloud computing, automation, analytics, artificial intelligence, mobile can help. Thanks to such technologies, executives running major business functions finance, marketing or IT are finding new ways to reduce costs and boost profitability. 2 3
Business executives are also under increasing pressure to show the leadership and shareholders new ways of creating value. Finding cheaper locations for operations is not enough anymore. Executives also need to explore intelligent automation and creative process redesign. These pressures are driving the emergence of what we call the As-a-Service economy. Let s understand why companies need As-a-Service. Figure 1: Why companies need As-a-Service 1. Transforms business services Intelligent Agile Robust 2. Supports new business models Plug in Scale quickly 3. Delivers business outcomes Pay for what you use Innovate faster Drive revenue Reduce costs Through the As-a-Service model, which is supported by analytics, cloud technologies and automation, companies can plug in a required resource such as computing power and scale it up or down quickly, on demand. Organizations can, therefore, gain the agility they need to drive growth and achieve high performance in a fiercely competitive environment. The model can also transform businesses by enabling more intelligent, flexible and robust operations, and by facilitating entirely new business models. But to extract maximum value from As-a-Service, organizations will need to move away from the old, full time equivalent (FTE) operational model as well as the outsourcing approach focused solely on reducing costs and transaction processing. Such models and approach can no longer deliver a long-term competitive advantage and have become mere table stakes. But, most companies continue to adopt them. To establish a longer-lasting advantage, organizations have to shift to a more collaborative and entrepreneurial model one that delivers other forms of value in addition to cost-saving efficiencies. The As-a-Service model can be a step in the right direction, but organizations need to move swiftly to capture its benefits. Big companies that hesitate run the risk of losing out to small enterprises and upstarts such as Netflix, Uber and Airbnb that have come out of nowhere to disrupt established industries and create entirely new ones. Companies need to realize that the distinctive power of As-a-Service lies in the power of AND the whole that s greater than the sum of the parts. It s about the integration of software, infrastructure AND business processes on demand plug-in, modular, scalable AND consumption-based all delivered with a commitment to measurable business outcomes AND ongoing innovation. Adopting As-a-Service requires a strong leadership and major changes in an established organization. Buyer executives must understand and communicate the As-a-Service vision and demand change from stakeholders and decision makers within their organization. They also have to know how to identify the right service providers and forge successful partnerships with them. Some companies are already working with partners and service providers on leveraging As-a-Service to drive business value. For instance, a leading diversified mining company has partnered with Accenture to leverage As-a-Service for itself. The company is moving to a new information system and technology delivery model that will migrate core enterprise information systems and technology to a cloud-based, As-a-Service solution. The model also incorporates pay-for-use pricing. The program will include the modernization of the company s existing enterprise resource planning and information management platforms, and consolidating and hosting these applications in the cloud. Managed via the Accenture Cloud Platform, the solution is guided by a public cloud first policy. The company expects to realize significant cost savings through increased business agility and cost flexibility inherent in cloud services, and from continued lower infrastructure prices in line with cloud economic trend. In another instance, Accenture is helping a leading European bank embrace an As-a-Service vision. The bank is undergoing a procurement transformation, with Accenture providing indirect procurement operations and accounts payable processing services, and also maintaining the bank s procurement IT system. Accenture is further automating the bank s source-to-pay process including invoice processing and contract compliance management and migrating the bank s current on-premise procurement IT platform to an on-demand, cloud-based solution using procurement software from Ariba, SAP. From a service provider perspective, companies need to combine market-leading business processes, applications and platforms, cloud services, security capabilities and infrastructure to design, build and deliver next-generation As-a-Service offerings (see Figure 2). Here s a closer look at these five core components: Business processes. Business processes are optimized through application of business and functional expertise alongside automation and analytics. This results in generation of insights that accelerate innovation and deliver improved business outcomes, such as enhanced profitability from revenue increases and cost reductions. Applications and platforms. Every business process is underpinned by a supporting application or platform. Using new and emerging digital technologies robotic process automation, artificial intelligence and software-as-a-service platforms effective providers help companies standardize, analyze, automate and carry out business processes in ways that generate useful data. Cloud. The connective tissue of digital businesses, cloud technologies give enterprises the agility they need to accelerate innovation by plugging into core business services and scaling them quickly, on demand. Security. Comprehensive, proactive and adaptive threat protection is embedded in the digital service provided. Infrastructure. As-a-Service rests on infrastructure that is always on and always available so that businesses can swiftly deploy the latest digital technologies. 4 5
Companies, on their part, need to go through an As-a-Service checklist while embarking on this journey and selecting a partner to enable this. They need to understand the following key value levers of As-a-Service: Plug-in: Accessing services quickly in days or weeks, not months. Modular design means companies can mobilize and then demobilize rapidly, as required. Scalable: Ramping up and down to match actual business volume needs. Standardized: Moving to a shared services model to standardize and scale processes and delivery. Repeatability is achieved with a multi-client and multi-tenant model. Consumption-based: Payment based on what is used rather than committing to services or functionality that may not be needed. Figure 2: Five components of the As-a-Service model Client Value Plug-in Scale Consumption -based Business outcomes Analytics Business processes Application and platforms Cloud Security Infrastructure Outcome-oriented: Working as part of a relationship where both buyer and provider are committed to specified business outcomes. Vendor agnostic: Providing deep knowledge and experience across multiple provider offerings to assemble just the combination of solutions appropriate to the business outcomes desired. Innovation enabled: Committing to ongoing innovations in business processes, infrastructure and applications. Future protected: Shielding the buyer from the potential disruption of upgrades and future change. Services are always up to date, and buyers have continuous access to innovation, scale and in-depth expertise. Consulting Diverse Workforce Innovative careers beoperations Personal impact If the current or desired mode of service delivery is not hitting the above value levers, companies will not get the full benefit of As-a-Service. So, how can companies move forward briskly and with more confidence to the As-a-Service economy? Here are several factors to bear in mind: Be prepared to encounter resistance and manage change: It is important to make sure that the whole business is aware of the overall strategy and to get people s buy-in. People need to understand the reasons for the change and the new possibilities being created. Learn to buy in new ways: Senior executives will need to be educated about how to buy As-a-Service. Focus on leadership and talent: Digital technologies are disrupting the delivery environment, which puts more burden on both providers and buyers to invest continuously in improving their talent people who can do analytics and automation, be advisors and innovate within the business. The role of the As-a-Service provider will become critical in addressing the talent and capabilities challenge. Blend analytics and automation strategies to deliver intelligent automation: By moving to real-time, automated processes executed on a secure, scalable, cloud-based platform, companies can obtain much a richer and better-quality data. They can also deploy sophisticated, cognitive analytics tools to further improve the quality of insights. Start small, pilot, pivot and then scale: The beauty of the As-a-Service model is that it allows you to start small and scale fast in a way that other models don t. Consider beginning with a function that is less business-critical and then use that success to bring around both the senior leadership and the middle management. Also consider a pilot in one geographic area, and then build on its success to scale As-a-Service capabilities globally. Build a relationship that drives innovation: Providers will need to demonstrate world-class capabilities and then continue to deliver their value each and every day. The best providers are not just transaction engines but consultants always looking for ways to advise, identify and drive additional value to reengineer and even unravel processes, not just incrementally. Companies need to understand that in the ever-challenging drive to enhance business productivity, they cannot afford to ignore As-a-Service. Understanding its advantages and defining components is a critical first step toward incorporating As-a-Service in an enterprise. Such understanding can also help buyer executives identify the best As-a-Service providers for their organization and then establish and sustain a mutually beneficial partnership with them. 6 7
About Accenture Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions underpinned by the world s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 373,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com. Authors Manish Sharma Senior Managing Director - Global Delivery & Solution Development and BPO Sales Lead, Accenture Operations manish.sharma@accenture.com Ramesh L. Krishnan Managing Director and Lead - Accenture Operations Delivery Centers, India and Sri Lanka ramesh.l.krishnan@accenture.com Bhavin S. Shah Managing Director - Accenture Operations, India and Sri Lanka bhavin.s.shah@accenture.com Disclaimer This report has been published for information and illustrative purposes only and is not intended to serve as advice of any nature whatsoever. The information contained and the references made in this report is in good faith, neither Accenture nor any its directors, agents or employees give any warranty of accuracy (whether expressed or implied), nor accepts any liability as a result of reliance upon the content including (but not limited) information, advice, statement or opinion contained in this report. This report also contains certain information available in the public domain, created and maintained by private and public organizations. Accenture does not control or guarantee the accuracy, relevance, timelines or completeness of such information. This report constitutes a view as on the date of publication and is subject to change. Accenture does not warrant or solicit any kind of act or omission based on this report. Scan to access key insights, infographics and videos anytime, anywhere. Copyright 2016 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.