Twins born early in 2020

New year, new buys. And if your name is Accenture, it may be not too surprising to see twin acquisitions within the first week of 2020. In back-to-back announcements less than 24 hours apart, Accenture unveiled its plans to acquire Germany-based SAP shop maihiro and Symantec’s Cyber Security Services business. Maihiro will deepen Accenture’s SAP C/4HANA capabilities while Symantec’s cyber business buy will add a node (or six) to a well-established network of cyber managed services capabilities around the globe. Each acquisition is a natural extension of Accenture’s previous investments, including the company’s work with SAP around project Elevate and Accenture Security’s role as the connective tissue in the company’s innovation-led agenda. While some may consider the two buys mutually exclusive, we see enough overlap, considering the collaboration between Accenture Interactive and Accenture Technology when it comes to developing front-office, cloud-enabled and secured customer experience solutions, alleviating enterprise buyers’ pain points around managing first-party data.

We do not expect Accenture to slow its pursuit of acquisitions, considering the company’s announced intent to spend $1.6 billion in FY20. Many anticipate the next purchase will support a high-growth initiative such as Industry X.0 or will perhaps explore another agency buy similar to that of Droga5. Regardless, Accenture takes a well-rounded approach to developing its functional (e.g., technological) expertise, similar to how it ensures industry-vertical-aligned revenues and capabilities are well balanced and diversified. For example, each of the company’s five operating groups generates about one-fifth of total sales. With all the acquisitions Accenture makes, and has made for the past five to six years, the question of how best to integrate talent often arises. While some amount of turnover is inevitable for one reason or the other — often acquired talent from small firms cannot adapt to a larger organization and all the processes and policies that may come with it — these policies and processes reflect Accenture’s core command-and-control-style organization, helping the company execute its integration strategy quite successfully.

Will the next buy continue to support Accenture’s “in the new” agenda? Highly likely. Which area? Only Accenture knows. But, according to TBR’s Digital Transformation Insights research, cloud remains the most adopted technology among digital transformation buyers. Accenture recently launched two cloud solutions, myNav and Accenture Cloud Native Core Solution, suggesting the company is not finished building its portfolio and capabilities in the space.

TBR will continue to monitor and analyze Accenture’s acquisitions and overall go-to-market strategy, along with its financial performance across TBR’s professional services, cloud and telecom research portfolios.