IT services companies will have to dig deeper into their domain expertise to thwart a challenge by software product companies for maintaining their leadership of the expanding market for digital transformation offerings, a top executive at Accenture Labs said.
Marc Carrel-Billiard, global senior managing director at the research and development arm of Accenture Plc, said also that the demarcation among product, IT services and platform-as-a-service (PaaS) providers is blurring and that Accenture Labs is working both with its parent and customers to come up with products, technologies and platforms.
Dublin, Ireland-headquartered Accenture is one of the world's biggest IT services firms and competes with the likes of US-based IBM Corp and Indian companies Tata Consultancy Services Ltd, Infosys Ltd and Wipro Ltd. However, all these companies are also increasingly competing with software product makers such as Microsoft Corp and Oracle Corp as well as a bunch of companies that offer platform-as-a-service (PaaS), which are ramping up their offerings to help companies across sectors digitally transform their businesses.
For instance, Oracle, Microsoft and SAP all offer different products on their cloud platforms on rent that provides enterprises with readymade software tools. These tools obliterate a large amount of work being done by services firms. However, the product and PaaS companies don't offer daily trouble-shooting or maintenance or customisation services, and so large enterprises still need big IT teams or outsource some work to IT services companies.
According to Carrel-Billiard, the services companies--having worked with customers deeply over several years--have domain expertise that the product companies lack. The deep engagement will help the IT services companies personalise their offerings to a level that cannot be matched by product and PaaS companies, he said.
Indeed, Accenture Labs, founded 30 years ago, is helping its parent come up with new innovations and help customers move forward in their digital transformation journey. The company has seven labs across the world--in San Francisco,Washington DC, Dublin, Shenzhen (China), Sophia Antipolis (France), Tel Aviv (Israel) and Bengaluru.
"The labs work directly with customers to come up with products, technologies and platforms. Accenture is also a client as it makes sense to experiment the products within the company before selling to the clients," said Carrel-Billiard, who was in India to visit the company's Bengaluru lab.
Carrel-Billiard, who reports to Accenture chief technology and innovation officer Paul Daugherty, said that as technology gains more prominence in a company's digital transformation, enterprises want to develop the technologies in house rather than outsourcing this work. The trend of developing intellectual property in house has given birth to global in-house centres, a model many Fortune 500 companies follow.
However, as talent for emerging technologies is scarce, these enterprises are forced to partner with the IT firms.
Accenture gives its customers the choice to keep the IP with themselves. In some cases, the technologies are jointly developed and the IP is jointly owned. In some other cases, this work is fully outsourced--including the IP--to Accenture.
Carrel-Billiard said the conversation with the customers has changed over the years. "Earlier we used to tell them what technologies we have. Now they ask us about blockchain. They want to understand how they can leverage each technologies," he said.
Customers also want to see specific possible outcomes from implementing these technologies, the executive said, adding that they want to know the impact it will have on their employees and consumers.
"It is about the outcome you generate for the consumers. Every aspect is changing and we need to be faster, cheaper and efficient. It is about capability and experience," he added.
Carrel-Billiard also talked about the labs and the work these centres are doing. Every lab has a specific mandate but each lab covers one or more domains. Five research domains are covered broadly: software engineering, artificial intelligence, systems and platforms, digital experience and cybersecurity. Under systems and platforms, for instance, a lab carries out research on blockchain and quantum computing.
The Bengaluru centre focusses on software engineering, AI and technology for what the company calls the greater good.
"Since India is a big delivery centre it made sense for the lab here to focus on software engineering. All our products are being delivered from here. Our clients want innovation at scale and not proof of concepts anymore," said Carrel-Billiard.
The function that makes the Bengaluru centre different is the Tech For Good research, which looks at issues such as hunger and disabilities. Under the 'Drishti' programme, for instance, Accenture worked with the National Association for the Blind. It worked on AI-based technologies that provide smartphone-based assistance such as image recognition, natural language processing and natural language generation capabilities to describe the environment to a visually impaired person.
"We started it two years ago and have partnered with several NGOs for this," said Carrel-Billiard. "If all the research we do here did not make an impact in the world, it is pointless. This is like a moonshot programme for us."