Accenture and IBM Playing from the Same Playbook in Shaping Their Future

Accenture appears to be picking up its pace of acquisitions and making a series of big moves. This is not a new tactic for Accenture; historically nearly every time you turned around there was another Accenture acquisition. But clearly the pace has quickened and the size of the acquisitions has increased. It’s important to understand how this acquisition strategy helps to shape the provider’s future, for it sends a signal to the entire industry.

Like IBM, I think Accenture recognizes that the services market is changing, so it seeks to move into new territories. The April 2014 acquisition of i4C Analytics vaults Accenture securely into the digital world, and acquiring Procurian in 2013 launched the firm’s procurement group services. Both of these acquisitions are examples of creating access to new markets in which Accenture will be able to navigate the changing services marketplace and ensure they are in the leadership position for next-generation services.

Any service provider tries to grow its practice organically, particularly when it creates offers that are significantly different from their existing offers. However, this strategy is difficult, slow and expensive, and it often confines a provider to a lower market share. Both IBM and Accenture are using the same playbook — moving to deal with this dilemma by buying fully formed companies with established value propositions and working business models that have already been developed and perfected.

Accenture historically developed practices from scratch and successfully scaled them, so spending more time and resources acquiring companies is a bit of departure for Accenture. But we at Everest Group think Accenture’s strategy is to marry acquisition into its impressive record of organic development rather than a complete sea shift in developing new offers.

I think we can look forward to an ongoing acquisitive posture from Accenture as it seeks to extend its businesses. The provider is paralleling IBM’s well-demonstrated move into new service areas through acquisitions, and seeking to drive explosive or significant growth off the new platforms.