Accenture Business Case on IT Project

Accenture Business Case on IT Project

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Company and Business Background

Accenture Business Case on IT Project is the world largest multinational management, consulting, outsourcing and technology services company as measured by revenues, with approximately more than 275,000 employees serving different types of clients in more than 120 countries throughout the globe. Its headquarter is located in Dublin, Republic of Ireland which was formerly located in Bermuda. According to the July 2013 report of Fortune magazine the Accenture PLC has been ranked at number 146 in FT Global 500. Currently India is considered as the single largest employee base for Accenture, with a headcount of approximately 87,000, whereas the USA and Philippines are on 2nd and 3rd number with a headcount of 40,000 and 35,000 respectively. Accenture is a member of S&P 500 index and its equity is also listed on the New York Stock Exchange.

Accenture organizes its people and services into three primary cross functional groupings. The client engagement teams of Accenture Business Case on IT Project typically consist upon a combination of capability specialist, industry experts and professionals with local market knowledge. There are four types of workforces that are working in the Accenture for the provision of services to its clients and as well as for its own self in the areas of consulting, outsourcing and technology. The four types of workforces and their functions are discussed here under.

  • Consulting: Provide management consulting, the application of technologies to business and process design work. The unit is also responsible for the delivery, sales and leadership of most of the project based work of Accenture.
  • Services: This unit usually focuses on the outsourcing engagements in the areas of maintenance, business operations, IT and Application development, HR and help desk services. Sometimes they also work as an internal Enterprise team.
  • Solutions: The technology solutions subsidiary of Accenture usually focuses on those specific technology skills that are needed to deliver projects or arrangements regarding outsourcing. The unit consists of a majority of those employees of Accenture that are working in the delivery centers in the developing countries like India, Brazil and Philippines.
  • Enterprise: The unit is focusing upon the supporting and managing of all the activities that are conducted across the Accenture business including facilities, legal, client financial management, security and marketing.

Just like most of other consulting firms Accenture is also operating in a matrix structure, where the first axis is assigned to the operating groups which are listed as below.

  1. Technology, communication and media.
  2. Health and Public services.
  3. Financial Services.

The above mentioned five operating groups are further classified into 39 industry subgroups that focus on applying technologies, industry evaluations and business issues.

The second axis is known as the growth platform that refers to the technical and functional domains in which Accenture delivers and creates solutions to its clients.

  • The development of Accenture’s functional, strategic, industry, operational, process and change consulting capabilities is the responsibility of management consulting.
  • The full range of Accenture’s system integration, IT outsourcing capabilities, technology and consulting are unified by the technology growth platform.
  • Lots of specific functions for clients such as finance and accounting, Human resources and procurement as well as other services assigned for the needs of certain specific industry are managed by the business process outsourcing.

Business Issue definition and description of proposed IT solution

In recent years the development in Information technology and demand for the changing needs of business environment such as decentralization of authority, task integrations, team problem solving, increased workers’ autonomy and valuing teamwork through group working Etc has compelled most of the IT service providers as well as those companies that have their own IT establishments for the reorganization and diffusion of information technologies and communication. Being a major service provider in the field of IT and outsourcing, Accenture is also required to make necessary changes in their IT department to give an effective response to the above mentioned issues. In order to make the IT system of Accenture more effective the Top management also felt a need to cut down the cost of Information technology expenses because today’s business man is more concerned about the development and stability of his firm instead of revenues generating, Another point of view of the management of Accenture behind cost cutting is to mitigate the impact of transaction cost theory over their customers because most of them thinks that they can obtain the same level of quality products and services as are provided by Accenture at considerable lower cost internally. Most of the companies in the world are willing to be involved in merger with other similar business rather than sole proprietorships because in today’s technological Global market it is very difficult for a small company to survive alone. The uses of modern information technology systems have a dramatic impact on the modern business world because most of the industries are using mass production techniques with a vertically integrated tall hierarchical organizational structure. To cope with the above mentioned problems Accenture needs to introduce the following changes into their Information technology system.

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  • Accenture should develop such sort of server which is capable of dealing with the operational managers at their individual level and gather all the necessary information to the mangers from their subordinates but at the same time the system shall send that information to a centralized server that is directly accessible only by the top management through their authorized accounts so that the operational managers and other middle managers can not be able to manipulate any sort of information. In order to reduce the numbers of hierarchical levels in the organization, management should introduce such sort of information system that can provide managers with information’s to supervise large numbers of workers by giving lower level employees more decision making powers. In order to reduce the cost of this system Accenture should design such type of server that is user friendly and will not require the user to take any sort of training before using it, by doing this Accenture can save the cost of training and workshops.
  • Accenture should develop a Hybrid expert Management information system (Business intelligence systems) like TEIRESIAS & MYCIN, which would analyze the problems at the very acute level and shall give information for decision making to the managers and lower employees as well. This system will give autonomy to the workers to evaluate the problems and make decision about how to solve them; the decision should be based upon the information provided by that expert system. This will reduce the risk involve in decision making and also will develop the skills of managers and employees about how to cope with certain problem effectively. It will optimize the return on the existing business and investments in IT systems such as data mining, customer relationship management, data management, customer relationship, and enterprise resource planning technology. (See Appendices)
  • Accenture should develop such an information system that would promote teamwork in the organization because team work culture is the demand of today’s business world. The current routing system of Accenture should be modified depending upon the structure and size of the organization through which workers of the same Workgroup can communicate with one another i.e. IBM Advanced peer to peer networking routing (See Appendices). The system would provide a platform to the employees where they can share their problems and work to find an appropriate solution collectively. This system is also cost effective because it will save the cost of conducting meetings, seminars, conferences and brainstorming sessions. It should be designed in such a manner that the security of the system cannot be compromised and no malicious software or malware can affect its functioning, and should make automatic backup of the data; which will reduce the cost of maintenance and recovery.
  • The current information system of Accenture is providing almost every type of information services to its clients but the clients always complained about the heavy costs of their services. In order to address this problem Accenture needs to reorganize its system in such a way that it should provide a better strategic analysis of the problems, enabling the executives to evaluate the problem thoroughly and make a better decision. The cost of the information system can be cut down by introducing the latest microchip systems, which will reduce the workforce of the IT department and also the space that are required by the current systems. The introduction of this type of system also cuts down the overheads like electricity consumption, maintenance cost, repair cost etc… Accenture should also design such a database system that would automatically gather the information from different sources and arrange them in an appropriate order, which would help to save the cost of different interposed IT personnel’s that are currently required to operate different types of subsystems for data gathering, sorting, analyzing and evaluating.

 Project Plan

The project has been proposed to the company with an objective to minimize the cost associated with the Information Technology by 30% without compromising on the benefits derived from it and its functionality. The project was proposed to increase the efficiency and functionality of the current IT system of the company and to cope with the changing trend of business environment such as decentralization of authority, worker autonomy, team working and task integration. The company’s comprehensive project plan is discussed under the following headings. (see appendices)

Project Scope Statement

The project shall deal with the following issues.

  • To update its current IT systems with the significant changes in the business infrastructure and modern technology.
  • To Automate the IT functionality of the company by acquiring new expert based IT systems.
  • To reduce the cost of IT system’s functionality and enhance its efficiency.

Project Deliverables

The project is designed to achieve the following outcomes.

  • The company will implement such an information system, that would technically cope with the decentralization of authority and will provide an opportunity for the lower level management to participate in the decision making process.
  • It would help the company to promote a team working environment by introducing modern routing systems that would enable the employees of different work groups to share their expertise with one another.
  • It would introduce the Virtualization software like Microsoft virtual server 2005 to run multiple operating systems and applications on a single centralized host computer.
  • The project would introduce a centralized database structure that would enable the management to perform economical and financial computing at a single point and is supported by such an expert system that would gather the data from different sources directly and establishes a clear timetable for its implementation.
  • It would help the company to reduce the cost related to IT system’s functionality and their maintenance by providing special training to the personals and would avoid different sort of risks.

Success Criteria

Accenture’s management should organize different type of assessment sessions in order to check the value of different systems and their respective cost.  If any system that is not properly working or cost more than the productivity it provides to the company, Management should either eliminate those systems or restructure its operating methodology to make it profitable. Management should also organize different brainstorming sessions and meetings with the workers to check the viability of the project and should also conduct a marketing analysis in order to get the expected feedback from the customers.

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Implementation Plan

Management of the Accenture should make a project team that would carry out the timely conduction of research work and its implementation over the prescribed fields. The Implementation plan shall consist of the following five elements.

  • Work Plan: – Accenture should begin the restructuring plan by introducing certain changes in their existing IT systems such as improvement of their current routing devices, up gradation of the database system by integrating new segmentations and up gradation of the current Virtualization software. The company should also introduce certain new systems i.e. Cloud computing, Hybrid expert management systems and database management system. The company should create a group of highly skilled personnel to lead this project and to utilize all the available resources in the best interest of the company. The team should be consisting upon randomly selected members from all the three hierarchical levels i.e. (Tactical, operational and strategic) to assist the project from all the possible aspects.
  • Resources and Budget: – Accenture should allocate a significant amount of its research and development budget to this project because the project will give a competitive edge to the company in the coming future. The company should hire some new experienced executives who will lead the project and conduct the feasibility of the project and should estimate its future outcomes. The company should also decide the sources from where the project would be financed and should arrange the budget accordingly. The project should be divided into three sub levels i.e. (primary, secondary and final stage), in the primary stage the team should conduct project feasibility study and evaluate that whether the project is viable or not. At this stage the company should not allocate extensive budgets because it the feasibility study doesn’t meet the expected outcomes of the project, the company can easily stop working over it. The secondary stage would consist upon the extensive utilization of resources because at this stage the company would accomplish its maximum development related work. At the final stage the major concern of the company is to wind up the work within the stipulated time period and in accordance to the expectations of stakeholders. (see the assumed budget in appendices)
  • Stakeholders

Accenture should try to communicate the advantages and benefits of the project to its stakeholders including, IT managers, operational staff and customers. It should also conduct a resistance analysis and try to find its possible solutions. The management should also conduct different seminars on a periodic basis and invite all its stakeholders in order to communicate the benefits of the project and minimize the misunderstandings among those who are expected to resist the project. Management should develop a proper action plan to reduce or eliminate the expected resistance from different sort of stakeholders and should organize a task team that would target dates to initiate the action plan.

  • Risk Assessment

It is the prime responsibility of the project team to assess any sort of risk associated with the project and its expected outcomes. The team should use different risk assessment techniques, which are given as under.

  • Brainstorm all the potential risks that might affect the probability of the successful completion of the project.
  • Assign a scale i.e. (high, medium and low) to different levels of probabilities and impact of each potential risk upon the future performance of the project. Multiply the probability of different levels with the impact of the risk to get the total effect of the risk over the entire project.
  • Identify different activities that would mitigate the impact of risk over the project and the contingency plans that would save the project from absolute failure.
  • Quality Control

The project team should keep in mind that although they have to reduce the cost related to the IT systems but they will never compromise over the efficiency and effectiveness of its functionality. They should impose strict quality control measures throughout the whole project in order to keep the project team on the right track. The executive committee of the company should conduct surprise audits of the project team and their performance; if the performance doesn’t meet the project plan management should punish the project managers by deduction in their salaries or perquisites on the other hand if the performance is better than the expected one, then projected managers shall also be appreciated with different types of appraisals and commissions.

Cost Benefit Analysis and Project Value

The project is primarily proposed to reduce the cost related to the operations of IT systems of Accenture therefore it is very necessary to evaluate the benefits related to this project because if the cost of the proposed project exceeds the expected benefits then it would not be considered as a good move from the management of Accenture to initiate that project. The company has incurred different types of costs to achieve the prescribed benefits accordingly, which are discussed as under.

  • Introduction of new expert systems and the up gradation of the existing routing reduce the company’s labor force and promote the team work culture into the company which will reduce the workload of top executives.
  • Due to lack of skill full labor and operating managers Accenture had faced huge losses in the past, to minimize that risk the project proposed to arrange training sessions and seminars for the managers and other workforce.
  • A centralized database system would eliminate a number of software and other systems that are performing similar functions related to the gathering of data and information from their respective department and hence reduce the operating cost of the company.
  • Development of a web base networking system will enable the IT personals of Accenture to use application for online database rather than buying a separate one for each computer.
  • The introduction of a centralized server will reduce the cost of keeping three separate servers for the operations of Accenture and it would also reduce the risk of server breakdown.
  • The implementation of Cloud computing systems would provide a centralized database system to Accenture’s IT department, which will improve the quality of economic calculations and will provide a platform for high speed data acquisition, processing, transmission and delivery of information, it will save the time of workforce.
  • Modernization of network components like routers and boosters will enhance the speed and security of information, which will reduce the up gradation cost as well as the cost of data recovery software.
  • The company will reduce the cost of maintenance by entering into support and maintenance contracts with certain new players in the industry.

Financial analysis related to the cost, benefit and project value is provided in the Appendices.

Risk Analysis

Although the project is beneficial and viable in terms of its productivity but still it has to deal with different types of risks that can affect its performance and can put a question upon its credibility. There are certain risks that are related to the planning and implementation of the proposed project and the methods of mitigating its effect over the performance and outcomes of the project is given are below.

  • Most of the employees will lose their jobs as a result of restructuring and reorganization of the whole IT department. The implementation of the New Expert system doesn’t require much work force to run it and will even reduce the number of managers at operational and even strategic level. This will create a sense of insecurity among the employees of other departments and they will not work with the same sense of devotion and loyalty. In order to minimize or eliminate this perception/risk from employees Accenture should not fire its worker rather it should train them to use the modern equipment instead of hiring new skill full work force or make possible job rotation with other departments.
  • The decentralization of authority and workers’ autonomy would most probably lead to the inefficient decision making and this will causes loss to the company not in the short run but also affects the long run functionality of the company. To mitigate this risk Accenture should organize training and brainstorming sessions of workers and try to develop a sense of better analysis in them which would ultimately lead them toward better decision making.
  • Using a single centralized server based system instead of three separate servers reduces the cost of IT systems and the risk of breakdown but at the same time in enhancing the chances to lose information because if all the information’s are kept at a single point then it would be easy for hackers to break its security and take all the information’s at once. Another risk related to this system is that due to the breakdown of the system the whole functionality of the company would stop its operations. To mitigate this risk Accenture should keep a proper backup plan or the server that would not only insure the continuity of operations but it should be capable of keeping a backup on all the information’s of the main or primary server.
  • Promotion of teamwork in the organization is a good initiative that is taken by Accenture but it can possibly develop a labor union culture or any other sort of informal labor organization or grouping, which would harm the functionality or organizational norms of the company. To deal with such type of risk the company should keep a firm check upon the grapevine structure and other sort of employees’ gatherings. The company should also avoid this type of risk by establishing some sort of formal labor unions and pretend that they are working independently.
  • Using a web based server database instead of buying application would save the cost of IT systems but at the same time it exposes the whole IT System to a wide range of malicious software such as viruses, spyware and malware which would even crash down the whole system. To mitigate this risk the company should establish some high quality antivirus software which would also deal with the spyware and malware. The software should update itself automatically whenever it considers necessary in order to deal with the latest viruses.
  • The external business and economical environment can also affect the success of this project. The basic purpose of the proposed project is to reduce the cost of IT system’s functionality so it is always exposed to the external risks such as inflation, political crisis and changes in the state laws. In order to minimize the expected effect of this type of risk Accenture should conduct a deep study of the market and other economical aspects of the business environment during its feasibility study.
  • The company should also ensure a strict security of its executive strategies regarding the proposed project and should exercise different type of controls to avoid the possible leakage of information before the implementation of project because the top competitors of Accenture such as International Business Machine Corporation, HP enterprise services, LLC, Wipro Ltd, Infosys Ltd, Cognizant Technology Solutions Corporations and the Deloitte Consulting LLP are always trying to keep their steps ahead from Accenture. To deal with such type of risk Accenture should impose a different type of controls over the project team and try to avoid any sort of information leakage by building up a sense of loyalty among their employees and also make them aware about the probable loss of such leak outs.
  • The outsourcing of non-integral parts of IT department would reduce the cost of a company at one end but on the other side it will expose the company’s reputation to high quality control risks because it is most probable that the companies and other subcontractors may not contain a high level of skills or technology which would ultimately hurt the brand name of Accenture. To avoid this risk Accenture should organize a quality control team for external resourcing or outsourcing, the team will conduct surveys of the companies and establishments to whom the work has been outsourced to check their operations and product quality. It should also assist them to sort out their weakness and to improve the quality. 

Alternative Solutions

The project team of Accenture has proposed different types of alternative solutions to the management and categorized them it into the following two alternatives. The team named the proposed project as Plan A and the subsequent alternatives as Plan B and C.

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  1. Plan-B

The project team has stated that after conducting the Risk Analysis we came to know that the project might be turned unsuccessful due to certain internal and external uncertainties, so in order to deal with such sort of uncertainties the team have made a backup plan which is known as Plan B. Following are some of the alternatives that should be used by the Project team in Plan B to mitigate the effect of plan-A’s failure.

  • The cost required for up gradation of existing systems may exceed the expected benefits and would make it difficult for the Project Team to continue Plan A, In such situation the team suggested to use Voice/Data integration Technologies because it is very economical as the cost of Packet voice is currently estimated to be almost 20 to 50 percent cheaper than the traditional circuit-based voice network.
  • Plan B suggests the use of wireless technologies in case of sudden breakdown of the centralized database computing system, because it is most probable that due to mismanagement or intake of any external malicious file can cause a breakdown in the running server.
  • In case of exceeding the budgeted cost for installation of expert systems and automation of data collection process Plan B would be used to backup the project by using Multiservice Access Technology and would delay the implementation plan of expert systems. The Multiservice Access Technologies are comparatively cheaper than expert systems, although it does not provide such benefits that can be generated from the expert system but it will assist the project temporarily. The project team will conduct surveys and audits of the already performed work on the development of expert systems to evaluate the reason behind exceeding the budgeted cost and its possible solutions.
  • If the failure of Plan-A is caused due to the unexpected political or economic conditions of the region the Project team will consider Plan-B. To deal with such situation Plan B contains a team of well known personals, who has a strong political and financial background. The team will skillfully handle the situation by organizing different seminars and brainstorming session with all the stakeholders and will get their favor in developing a decision regarding the future of the project. The team will also conduct a renewed feasibility study of the situation and propose the expected solutions. The team should also consider the past experiences while renouncing the strategic planning of the project and also make the possible arrangement and time frame for that.
  1. Plan-C

In case of the failure of Plan-B the project team has another backup plan which is known as Plan-C. According to this plan the team will take certain strategic decisions regarding the future of the proposed project for example if the proposed project is failing to carry out the expected results even after the implementation of Plan-B, then the project team will conduct a survey to find out the root cause of the continuing  failure. It will gather the information from all the related sources of the project to check whether it is viable to continue the project in the same form and with the same planning or to restructure the whole project with a new perspective. The team will also conduct a fresh cost-benefit analysis of the project and evaluate the financial or return base viability of the project. After conducting different surveys and analysis the team will give a final decision regarding the future of the project that whether it is beneficial or not, if yes, then it will also provide a comprehensive renewed plan and if it is not viable then the team will also suggest how to compensate the company from the expected losses of the proposed project.

Some Additional Analysis

The project team should also conduct some additional analysis to evaluate the viability of the project; these analyses are discussed as under.

  • SWOT Analysis

It will allow the project managers to identify the weak area that needs improvement and help to implement the correct methodologies and techniques which will assure that the project will be completed on time and within the prescribed budget. SWOT analysis will help the project managers whether to improve the teamwork culture by improving the whole process or to improve the individual task and to evaluate that which one will get better efficiency. The SWOT analysis will analyze the strength, weakness, opportunities and threats related to the proposed project and will answer the following questions. (See appendices)

  • Is the budget sufficient to complete the project thoroughly?
  • What are the benefits that Accenture would gain from timely completion of the project?
  • Does the project manager have any related past experience of handling such projects?
  • Does Accenture have sufficient resources to provide contingency funding?
  • What areas need to be outsourced and why the company is require doing this?
  • Is the schedule of the project realistic?
  • What are the potential drawbacks related to the project?
  • Will this project take advantage over its competitors? And how?
  • What are the available opportunities that Accenture needs to capture?
  • Whether the replacement of the team members is a difficult task or not?
  • Could changes in the social, economical, political and different environmental trends affect the project?
  • Can the capabilities of Accenture be copied by competitors?
  • Gap Analysis

The Project team should conduct Gap Analysis of the project at different intervals to identify the future objectives that are expected to be achieved from the proposed project and then analyze the current situation. If the current situation differs from the expected one then the team will find different ways to fill up the Gap to reach the expected objectives of the project. The team should use the Gap analysis while implementing the different alternative plans. (See Appendices)

  • Monte Carlo Analysis

Monte Carlo analysis will help the project manager to calculate the probable total cost of the project as well as to find the range or potential date of completion for the proposed project. As the analysis uses quantified data, therefore it allows the project managers to communicate in a much better sense with the strategic management, especially when the top management show concerns about the unrealistic project cost or impractical project plan. The analysis would provide a realistic image of the performance of the project team and will help to estimate the completion date of the project. (See Appendices)

Appendices

IBM Advanced Peer-to-Peer Networking Routing.

Project Plan

Accenture Business Case on IT Project

 A Typical Expert System 

CategoryRateTotalResourcesPlaning
Feasibility study$750,000Primary team23 hrs/week starting 9/11 thru 2/12
Intangibles$200,000kHz & co
Travel320 days@ $3000/day$960,000Project Office28 hrs/week starting 9/11 thru 8/12
Material/Supplies320 days@ $7,000/day$2,240,000Jed & Jeff40 hrs/week for 46 weeks
Legal$200,000Sentential associates3 hrs/week for 8 weeks
Sub-Contractors320 days@ $4,500/day$1,440,0006 sub-contractors
Total$5,790,000

References

  • Craig, J. (2012). Risk analysis, gap analysis and SWOT analysis. Project Management Lite: Just Enough to Get the Job Done….Nothing More, 78-93
  • Schmidt, T. (2009), Project plan and strategic planning. Strategic Project Management Made Simple: Practical Tools for Leaders and Teams, 40-69
  • Abbott, A. (1988), Expert systems and their benefits in cost reduction. The System of Professions: An Essay on the Division of Expert Labor, 30-57
  • Young, D. (2002). Cost reduction methods. A Manager’s Guide to Creative Cost Cutting, 40-86, 105-154
  • Financial analysis and financial data of Accenture and its competitors, http://financials.morningstar.com/competitors/industry-peer.action?t=ACN
  • Accenture’s history and company background, http://www.accenture.com/us-en/company/overview/history/Pages/index.aspx
  • Voss, B. (1994). Cost reduction and enhancing efficiency. Journal of Business Strategy, 15(3), 36-45, doi: 10.1108/eb039635.
  • Hertz, S. Johansson, J. & Jager, F. (2001). Customer oriented project planning & cost cutting. Supply Chain Management: An International Journal, 6(3), 128-142
  •   doi: 10.1108/13598540110399174
  • Jaeger, T. (2008). Data security in the proposed IT systems. Operating System Security (Synthesis Lectures on Information Security, Privacy, and Trust), 34-78
  • Armerding, T. (2012), Risk related to the modernization of IT systems. www.Cssonline.com, doi: 700263.

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