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Accenture and AWS are doubling down on their combined bet that a series of 40 new accelerators and additional joint investments will help reduce talent gaps holding enterprises back from innovating faster, increasing AWS sales in the process.
Last week at AWS Re:Invent, Accenture’s AWS Business Group (AABG) and AWS announced the continuation of the partnership and increased investment in accelerators, new technologies, and techniques for helping their joint customers innovate faster. Accenture is AWS’s largest Global Systems Integrator (GSI) in North America and the U.K. The joint investment solidifies the Accenture and AWS partnership for five more years, with the AABG taking the lead in driving the partnerships’ future direction. Renewing the partnership also includes increasing investments in Accenture Cloud First, which aims to improve cloud stack integration and accelerate customers’ digital transformation strategies.
What makes the AABG and AWS partnership unique
Andy Tay, senior managing director at Accenture, says that what differentiates the AABG and AWS partnership from many others is how accelerators are designed to bridge talent gaps, enabling greater productivity and driving more continuous innovation. “We found that enterprises who are cloud leaders transform their people as well as their technology and report 60% higher ROI than their peers on their cloud investments. That is a material anchor in this ongoing partnership as accelerators drive continuous innovation and bridge the talent gap,” Tay said. Accenture’s recent study of cloud leaders found enterprises that continually invest in people and use cloud strategy to drive greater business growth tend to attain higher ROI.
The Accenture study of cloud leaders advocates putting employees at the center of cloud transformation. The 40 accelerators announced at AWS this week are designed using a common framework that seeks to close talent gaps while making insightful, high pay-off cloud investments that deliver consistent ROI by vertical market and industry. Accenture finds that cloud leaders or champions are 2.2 times more likely to have more agile, innovative organizations that are 1.7 times more likely to deliver improved customer experiences.
Designing accelerators, so they’re adaptable enough for closing talent gaps while scalable enough to support the fast pace of digital competitiveness, requires a balanced platform approach. Accenture’s study of cloud leaders found that organizations need to have the right balance of culture, operating model, leadership, governance, and talent to succeed with a cloud strategy. Closing the talent gap is the most significant factor in the eight most valuable benefits of an enterprise cloud strategy, as the graphic below shows:
Are accelerators a good investment?
As part of the renewed partnership, Accenture and AWS will invest in creating a series of new accelerators focused on streamlining cloud migrations and increasing AWS adoption 50% faster than today. Deciding if an accelerator co-developed by AABG and AWS is worth it or not first needs to factor in how integrated the development teams are. Tay explains that Accenture and AWS engineers collaborate on current and future accelerators going through DevOps today. “Accenture and AWS engineers will be able to use the Seattle-based center to work together, share designs, develop, build and test code,” he said. DevOps resources are among the most expensive and elusive to recruit and retain. Accenture and AWS creating a shared workspace in Seattle for their engineers to create, code, test, and release accelerators together further differentiate the partnership. Tay says they also have a governance process for when large customers ask for enhancements to accelerators and expect to see their requests on roadmaps a few releases out.
The ultimate test of whether an accelerator is worth it or not is in how successful enterprises are in closing the talent gaps to drive greater innovation — and deliver more profitable revenue. Accenture’s cloud leaders study found that enterprises who excel on the five levers of improving their culture, operating model, leadership, government, and, most of all, talent management, drive higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) growth. Breaking the growth out by factor finds that 25% of it is attributable to better talent management, followed by improved governance contributing 23% of EBITDA growth.
Higher cloud adoption drives improved EBITDA growth, especially if the business case is based on cost reduction alone. Accelerators promise to deliver experience-led innovation, increase AWS adoption, and introduce improved real-time monitoring and insights or signals for a given enterprise, as Accenture senior management calls them. In addition, Accenture and AWS provide research showing how cloud migration creates cultures conducive to more innovation. The challenge for them and their customers is in knowing if productivity and profit gains are more from efficiency, true innovation, or a combination of the two.
A partnership to accelerate innovation
Accenture and AWS renewing their partnership to deliver 40 new accelerators in order to close talent gaps and drive more innovation are ambitious. Accenture’s research shows enterprises can attain a 1% improvement in EBITDA by getting talent management right combined with getting governance more in shape as part of a cloud migration strategy. AABG is betting they can package up the accumulated experience across verticals and industries, then scale it as part of accelerators. AWS is in it for the potential to see adoption increase across enterprises. Deciding whether an accelerator is worth it hinges more on if the framework and methodology to implement it are a good fit for an enterprise’s culture while also integrating with the tech stack. Getting both right will drive innovation, but miss one of them, and the business case for cloud migration immediately reverts to reducing costs in many enterprises.
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