ET BureauBENGALURU: Accenture, the IT outsourcer considered to be the strongest player in the next frontier areas, including social mobility, analytics and cloud or Smac, believes its current strength is largely on account of the management bidding for new transformational deals.
Significantly, Accenture's strategy on Digital space, which includes Smac, serves as a lesson for the Indian outsourcing industry which estimates a larger share of future revenues from this space as customers across industries look to keep a tab on costs while at the same time expecting more efficiencies.
“The deeper thing about digital is any technology that increases the information intensity and connectedness of any resource,“ said Mark McDonald, MD and Digital Business Strategy Lead in Accenture.
“A lot of companies that talk about digital are doing what is digitising. So, they are re-implementing existing work practices and using new technologies to put it on social, cloud. So what was a paper-form became a website. But this does not change the way business is done. The big opportunity is to do new things with newer technologies.“
“We are working with clients, how they transform their business model and how they find new business opportunities,“ McDonald told ET in an interview last week.
Accenture, which reported a revenue of over $30 billion for fiscal year ended August 2014 -more than the combined revenues of TCS, Infosys and Wipro -does not share revenues generated from Smac space but said that it has been investing in building technologies and retraining its workforce for over a decade.However, some experts believe it generates northwards of $1 billion from cloud offerings alone.
For this reason, homegrown IT outsourcers are beefing up their presence by either partnering with some of the startups focused on data analytics or cloud or trying to build up the expertise within the organisation. Earlier this year, Wipro, country's third largest IT firm, created a digital business unit and has also partnered with some startups to get technology platform to help the Bangalore-based firm's clients.
Infosys too, under the new CEO Vishal Sikka, is implementing disruptive technologies, including artificial intelligence, to help bring in more efficiencies for its over 900 customers. Mumbaibased TCS estimated that revenues from digital will scale past $5 billion in the next five years.
Nasdaq-listed Cognizant is aggressively beefing up its presence by buying startups focused in this space as the company bought two startups in the past two months -in October it bought Cadient Group, a digital marketing agency, and last week, it bought Odecee, an Australian startup that offers mobility, web and cloud solutions. Cognizant for now generates northwards of $500 million business from the $10 billion revenue, although its rivals, including TCS and Infosys, do not for now give an individual break-up of business generated from some of these newer areas.
“Fundamentally, we have reached an IT density where the answer to problems is to shift from `to-do-more' mindset to `Ineed-better-of-it',“ said McDonald.
However, some believe that scaling up in some of the newer technologies will be a challenging period for some of the large IT firms as it is becoming a crowded space, especially with many of the startups managing to create a space for themselves.
“The world has suddenly changed and become digital. A lot of companies which have built their business developing and maintaining legacy applications will have to transform themselves and this will be really hard,“ said Rajeev Sawhney, President, Strategic Business at Mphasis.
“It's like making an elephant dance.Relatively smaller players can seize this opportunity and adapt with their nimbleness and agility.“
Significantly, Accenture's strategy on Digital space, which includes Smac, serves as a lesson for the Indian outsourcing industry which estimates a larger share of future revenues from this space as customers across industries look to keep a tab on costs while at the same time expecting more efficiencies.
“The deeper thing about digital is any technology that increases the information intensity and connectedness of any resource,“ said Mark McDonald, MD and Digital Business Strategy Lead in Accenture.
“A lot of companies that talk about digital are doing what is digitising. So, they are re-implementing existing work practices and using new technologies to put it on social, cloud. So what was a paper-form became a website. But this does not change the way business is done. The big opportunity is to do new things with newer technologies.“
“We are working with clients, how they transform their business model and how they find new business opportunities,“ McDonald told ET in an interview last week.
Accenture, which reported a revenue of over $30 billion for fiscal year ended August 2014 -more than the combined revenues of TCS, Infosys and Wipro -does not share revenues generated from Smac space but said that it has been investing in building technologies and retraining its workforce for over a decade.However, some experts believe it generates northwards of $1 billion from cloud offerings alone.
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For this reason, homegrown IT outsourcers are beefing up their presence by either partnering with some of the startups focused on data analytics or cloud or trying to build up the expertise within the organisation. Earlier this year, Wipro, country's third largest IT firm, created a digital business unit and has also partnered with some startups to get technology platform to help the Bangalore-based firm's clients.
Infosys too, under the new CEO Vishal Sikka, is implementing disruptive technologies, including artificial intelligence, to help bring in more efficiencies for its over 900 customers. Mumbaibased TCS estimated that revenues from digital will scale past $5 billion in the next five years.
Nasdaq-listed Cognizant is aggressively beefing up its presence by buying startups focused in this space as the company bought two startups in the past two months -in October it bought Cadient Group, a digital marketing agency, and last week, it bought Odecee, an Australian startup that offers mobility, web and cloud solutions. Cognizant for now generates northwards of $500 million business from the $10 billion revenue, although its rivals, including TCS and Infosys, do not for now give an individual break-up of business generated from some of these newer areas.
“Fundamentally, we have reached an IT density where the answer to problems is to shift from `to-do-more' mindset to `Ineed-better-of-it',“ said McDonald.
However, some believe that scaling up in some of the newer technologies will be a challenging period for some of the large IT firms as it is becoming a crowded space, especially with many of the startups managing to create a space for themselves.
“The world has suddenly changed and become digital. A lot of companies which have built their business developing and maintaining legacy applications will have to transform themselves and this will be really hard,“ said Rajeev Sawhney, President, Strategic Business at Mphasis.
“It's like making an elephant dance.Relatively smaller players can seize this opportunity and adapt with their nimbleness and agility.“
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