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New Accenture Microsoft Business Group Excited About AI, Vertical Opportunities

Why did Microsoft, Accenture and Avanade form yet another new venture?

Jeffrey Schwartz

March 4, 2019

13 Min Read
Artificial intelligence (AI), machine learning
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The Accenture Microsoft Business Group is the latest evolution of a joint venture created nearly two decades ago with the formation of Avanade, the consulting and technology services provider focused on Microsoft’s core offerings.

Over the years, the three have announced various initiatives, most recently last summer’s effort to offer vertical solutions coming from Accenture’s Applied Intelligence group and Microsoft’s AI portfolio. The move helped springboard Microsoft’s call to action for its broader partner community to build competency in offering AI solutions that can help their customers transform their businesses.

“Business decision makers aren’t interested in APIs or individual services, they want out-of-the-box solutions that simplify and solve their business processes,” Microsoft’s worldwide channel chief Gavriella Schuster noted in last year’s announcement.

Last month’s formation of the new Accenture Microsoft Business Group might make you wonder how this is different than the existing approach Microsoft and Accenture have maintained with Avanade. It builds on the fact that Microsoft is ramping up its emphasis on adding specific vertical industry capabilities to its solutions.

Likewise, Accenture is putting a greater emphasis on its vertical-industry expertise and consulting agenda, focused on working even closer with the lines of business, which means Avanade will power that, according to David Seybold, president of Avanade’s North America business.

“I think what’s going to change is Accenture has a level of forward-looking thought leadership that goes far beyond what we’ve done necessarily in the past, and where clients should be taking their strategies and their digital agendas for the next five to 10 years,” Seybold told Channel Futures.

“With this greater emphasis on the Microsoft partnership, the three clouds of Microsoft, the whole open technology platform, they’re going to introduce more innovative ways for clients to derive value from the Microsoft platform,” Seybold added. “And so I think clients are going to get much more innovative, industry-specific ideas from Accenture on how to make use of the Microsoft technology platform.”

The executive tapped to lead the new Accenture Microsoft Business Group is Emma McGuigan. A 20-year Accenture veteran based in the U.K., McGuigan is stepping into her new role as senior managing director, after most recently serving as group technology officer for Accenture’s communications, media and technology sector. In that role, she oversaw partnerships focused on emerging technologies such as machine learning, AI and cognitive computing solutions delivered to clients in that industry vertical.

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Accenture’s Emma McGuigan

Given Microsoft’s focus on delivering AI across vertical sectors, McGuigan told Channel Futures that she’s ready to hit the ground running. In our interview, condensed and edited for clarity, McGuigan shared her vision for this new group.

Channel Futures: Accenture, Avanade and Microsoft have jointly announced various partnerships, including one as recently as last year, when the three formed an initiative around AI. Does this new group tap into that, or is it actually a separate partnership?

Emma McGuigan: It’s about tapping into the AI work and where we’ve co-invested together around all of the different announcements we’ve made. It’s around pooling all of that to help accelerate the opportunity that sits here. But this is also about …

… pulling Accenture closer in, with that transformation journey to allow greater scale around that co-investment around AI, around cloud [and so on].

CF: Have you changed the equity structure of the partnership as a result of the formation of the Accenture Microsoft Business Group?

EM: Avanade remains unchanged. It remains a joint venture with the same financial structure that it has always had. The business group is really about a collaboration between the organizations so there’s mutual benefit for all. This is about really thinking about how we partner to offer the right kind of constructs for our clients.

CF: How will this new group structure function differently than the way then you’ve gone to market in the past?

EM: We are building a dedicated capability around transformation. What’s new here is we are really elevating the conversation into the C-Suite. Microsoft and Accenture are leveraging our relationship at that level to drive these disruptive plays to have an industry-focused discussion which is powered by Microsoft technology.

CF: As you oversee this group, what learnings from your prior roles at Accenture do you plan to bring to move it forward?

EM: In my previous role as as the CTO for our communications media and technology business, I had the responsibility of managing the ecosystem relationships across all of our alliance partners. And obviously we have some which are very large, and some which are much more nascent, particularly when we’re looking at the relationships we have with startups. The experience I bring is really understanding how, as I rotate out of that specific industry group (we have five global industry groups) into much more of a cross industry capability. I grew up at Accenture as a technology architect, which allowed me to understand how we can really pool the capability that sits within Avanade, pool the relationship that sits within Microsoft and bring that industry-centric lens. I also think because we’ve got this dedicated team, not just from the Avanade perspective but within this consulting capability that sits within the Accenture Microsoft Business Group, we have the ability to turbocharge that conversation right into the into the client lens. So, providing the industry-focused skills that sit in those industry groups, we can supplement that with this core consulting capability around the Microsoft skill set. And then we can really continue to drive delivery through the expertise we have within Avanade.

CF: The announcement mentioned that the new group will have 10,000 Microsoft-focused consultants. What type of specialists will that entail?

EM: Some of it is about growing our capability that sits around things like cloud-native that we have in our intelligent engineering services capability, sitting across all of the major cloud vendors. It’s about taking the guys who are Microsoft-aligned and scaling that capability out. So as our clients make the investment in the migration to cloud solutions, they can really start to experience the full growth of the potential that migration to the cloud opens. This will let them start to think about how they can …

… use techniques like cloud-native and container-based solutions as Azure provides through the Kubernetes framework to really open the acceleration that they need to drive digital transformation today for their businesses and align that rapid development of products and services.

The second place where we really get to focus around really making sure that capability that Microsoft has is within security and our strength and capability within our security business. A third item will be around data and analytics and the investment we’ve already made. It’s about scaling that and leaning into that industry that industry dialogue.

As those workloads get shifted again into the cloud, it opens up the opportunity to think differently about how you can operationalize how an organization works on the insights of digital on the inside. The fourth major pillar for us is around Industry X.0. Our sort of real strength in our Industry X.0 space is to really drive some differentiation using AI and data analytics to really drive maximize value there. And the fifth one is obviously to take the Microsoft Workplace and Office 365 and Teams, and to tie that in to the way we talk about workforce of the future.

CF: Through this new group, to what extent do you see providing managed services versus just pure advice and consulting and integration services?

EM: I don’t think this is as simple as it once was, because if you look at implementing an AI-based solution, because of the very nature that AI is learning, it’s not like you deliver a solution and you either run it, or you hand it back to the client and they run it themselves in some kind of service model. It becomes much more around a continual rotation and a continual learning, and I think we have to go case by case. You end up with a blurring of the lines between what we would have considered previously to be traditional consulting versus traditional outsourcing. It becomes much more of a blended-teams approach around the different types of commercial models as we start to see maturity growing around some of these solutions. We have an expectation over the size of the consulting capability versus the delivery capability, if you will. There is the need to run it, but it is evolutionary in that journey rather than setting targets.

CF: Where do you sense that the needle is moving? Do you see more clients across the board that want you to manage these processes for them, or do they want to run it themselves?

EM: We increasingly see clients are wanting to feel more in control of the content — to really understand how their business is running but wanting support from organizations like ours to really help them really think about how they can run those solutions and processes in new ways that they couldn’t before. So you end up in this in a very collaborative way and working much closer in much more of a partnership than an individual deal-by-deal basis.

For example, the telcos, who are really, really trying to face …

… the challenge, and they’re starting to think of how they’re going to rotate their organization. They need to transform their core. They need to grow that core and they need to scale into new revenue streams, and they need to balance that and do that around a wide pivot. What organizations are not keen to do is just hand over all of the new skills to Accenture. What we’re doing actively with them is standing up scrums or squads where we’ve got our teams working collaboratively together, and as they’re able to grow that capability, we can move people into the next piece of work that needs to be done or their teams are able to take more on.

CF: What is the biggest challenge in bringing AI to clients. Do they want it, are they afraid of it, do they think it’s still a lot of hype? Where can they bring it into their business in a in a way that is demonstrable to their business but also their employees and customers can easily embrace?

EM: I think there [are] a couple of areas and we’re starting to see increased maturity in certain functional capability. I would argue it is much more about automation and it’s using AI to drive improved automation. There has been a relatively good uptick around using AI to drive better automation experiences which drive cost savings.

CF: Speaking of the AI functionalities in Azure, there’s the Microsoft Bot Framework, and of course you have on the front-end Microsoft Teams, which has its bot capabilities. Do you see Teams and its AI functionality serving as an entrée into some of these capabilities?

EM: I think that’s part of the opportunity for us. When we think about workforce transformation, this is more than just helping people be more efficient and working virtually. It’s about properly bringing AI to change the way we manage our workloads and understand where we’re spending our focus time by helping prioritize our inboxes and our calendars. It’s still early days on that journey with Teams, but this is super exciting in terms of the opportunity to bring AI to the employee as a as an assistant in a way that goes well beyond just the natural language-processing benefits that we’ve seen with Siri and Alexa and the like. This is where I think you start to get real value from an employee’s perspective and it’s something we were really working on.

CF: And Accenture is doing this for its own employees. How is that going?

EM: As you are probably aware, Accenture is one of the – if not the – biggest buyers of Microsoft technologies in the enterprise. And the other thing that we’re really thinking about is when we look at the skills and capabilities of our people. If we can use AI to understand and accurately capture the skills that people have, and if we can embed AI into the way we work to understand how they’re spending their day, it’s easier for us to continually offer experiences to our people to help them rotate their own skill sets.

CF: How are you doing it and bringing it to your clients?

EM: We have a program that’s been running within our operations teams, and this is where we’re doing business-process outsourcing. We’ve already automated over 35,000 roles for clients over the past three years, but those people have all been able to reskill by offering them opportunities. Like your role is being automated, but you have all this …

… expertise. You can take a skill and use it to reskill and remain relevant. That requires a human behavior change to think about continually learning, which we’ve been able to encourage and incent — and they get very comfortable with that. But it’s the AI that helps them form the way that can work in a very pragmatic way. And if you can make that retraining incremental to the way somebody is working, it doesn’t become a scary thing in the way we quite often read about, where one job goes away you have to reskill to something completely new. But I think when we look at the AI that’s becoming embedded into how we can work as employees, I think that’s where the opportunity sits for us to move into that capability. But it’s still very early days for that.

CF: As you said, Accenture is one of the biggest users of Microsoft technology, and Teams itself. How much influence does Accenture have with Microsoft’s product development teams to make sure the technology meets your needs and for your clients?

EM: We have a very open dialogue with the product-engineering guys when we’re seeing challenges and share how we’re looking to evolve. And then, very specifically when we’re looking at industry solutions, we are absolutely partnering with them around retail and around some of the key industry sectors like health to leverage the industry knowledge that Accenture has with the toolkit, the capability that Microsoft has and pulling that together to create those industry solutions.

CF: And I’m sure a key part of this work is around helping integrate Microsoft technology with non-Microsoft technologies, whether it’s software or services, right?  

EM: That’s right, and that’s about the capability that sits within the cloud native on the Azure stack to actually provide a decoupling tier, if you will, and allow that platform to be used as a way to pulling different software services in — and it’s that capability that really helps our clients accelerate on their digital journey.

CF: Will you be offering the Microsoft Managed Desktop service as well?

EM: We’re still working through some of those details.

CF: You alluded to Microsoft’s security capability. Do you want to expand in the areas of managed security services, or will you emphasize more of a consultative approach?

EM: We already provide managed security services and that’s certainly something that we will be continuing to do, and we’ll really be looking at scaling further, the work we’re already doing with Microsoft around managed security services.

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Jeffrey Schwartz

Jeffrey Schwartz has covered the IT industry for nearly three decades, most recently as editor-in-chief of Redmond magazine and executive editor of Redmond Channel Partner. Prior to that, he held various editing and writing roles at CommunicationsWeek, InternetWeek and VARBusiness (now CRN) magazines, among other publications.

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