Business

What Accenture's Q2 FY22 results mean for technology executives

Five things technology executives can learn from Accenture's earnings.

Written by Forrester Research, Contributor March 17, 2022 at 12:51 p.m. PT

No, this is not a plug for Accenture. Rather, it is an analysis of what Accenture's Q2 FY22 results mean for today's technology executive.

Accenture CEO, Julie Sweet, and CFO, KC McClure, announced today that Accenture:

Grew 28% across the board, with double digital growth in every region, industry, and service line.
Has 36 clients with more than $100 million in bookings.
Is charging more to cover higher costs.
Offers outcome-driven pricing, including satisfaction, efficiency, security, and growth (in that order).
Is not changing its aggressive guidance for the rest of the year.

What do these disclosures mean for technology executives?

This high growth rate is a reflection of the ever-expanding role of technology in business. Technology is a game changer for every facet of your business. Tech executives have the responsibility to build for today and build for the future with resilient foundations. They have to replatform workloads to the cloud and be creative in applying technology to every facet of their business. Tech execs: This is your time to shine.

Partners will play an increasingly important role in your success. The environment and ecosystems are complex and vast. Partners are vital to your ability to execute swiftly at scale. Seek providers with the business model shift to be your co-innovation partners that bring solutions, technology partners, and end-to-end expertise.

"Megadeals" place a premium on your partner management skills. It's time to adopt a better "value orchestration" approach to apply systems thinking to your portfolio of providers and coordinate their contributions against business goals. You must ensure you have the right skills to manage these complex arrangements.

Paying more for partner talent should increase the potential for outcome-based pricing. This inflation-neutral result has implications for your own planning and execution. It's better to pay more for high-quality talent that you can swap in and out of a blended delivery team than lowball on pricing for sub-standard labor. To mitigate some of these costs, ask the provider to put 10%-15% of their fees at risk with an outcomes-driven term sheet.

This "call it as we see it" guidance signals that Accenture is not expecting the war or inflation to slow its clients' transformations. Accenture (which shed its Russian business) does not expect the war to disrupt things more than it already has. Technology executives should work through short-term shocks and keep investing for the long-term benefits of the technology foundations of business. Invest in platforms that bring resilience and adaptiveness, expand the practices and skills for continuous innovation, and bring creativity into your organization as an operating principle. Call it you like you see it: Technology changes everything.

This post was written by VP, Principal Analyst Ted Schadler and it originally appeared here.