Phil Fersht — CEO, HFS Research[00:00]
Good afternoon. It’s delightful to get a chance to meet you, Yusuf. I know you took charge of the operations during the pandemic, right? So now you get a chance to face the world and tell everyone what you’re doing. And I was amazed at the size of your business these days, but maybe you could just give everyone a quick overview of yourself, your role, and where you’re taking things.
Yusuf Tayob — Lead, Operations, Accenture[00:14]
Sure. Thank you, Phil. It’s a pleasure to be here. We’re always happy to join HFS and a number of you here. It’s been a productive day and many of the topics you’ve covered have been things that are near and dear to our hearts, so it’s a pleasure to be here. As Phil said, I run what we call our operations business, which is really the evolution of our business process management services, and now we put tech, data, and AI in front of all of it. It’s really the evolution of our managed services business. We operate across Accenture and everything that Accenture does — it’s about 215,000 people now and about $10 billion in revenue.
Phil Fersht — CEO, HFS Research[01:07]
There you go. Out of 800,000.
Yusuf Tayob — Lead, Operations, Accenture[01:11]
A little bit less, a little bit less. Yeah.
Phil Fersht — CEO, HFS Research[01:11]
I’m intrigued to know what’s going to happen when you go past a million employees. You know, you’ve been in this role for a couple of years. What have you learnt personally since you’ve taken charge of a $10 billion P&L and a huge business? What sort of lessons can you share with everybody here about what you’ve picked up in terms of leadership style, and maybe how it’s changed you?
Yusuf Tayob — Lead, Operations, Accenture[01:42]
I think the world has changed all of us in the last couple of years, which I feel like we’ve been saying a lot, but we’re seeing it manifest in what we do every day. Personally, I’ve been with Accenture 23 years and I grew up as sort of a classic management consultant, then I was involved in our technology business, I ran various P&Ls, and I’ve been in all parts of Accenture actually except this business. My view of this business was always that it was a traditional BPO business — and in fact it was a traditional BPO business many years ago. But if you just think about the evolution of the industry — and all of you here know this well — when we helped pioneer the industry 25 years ago, it was principally about efficiency and labor arbitrage. As that modernized, it became about process excellence, bringing our functional expertise together with what we were doing in the BPO business and really optimizing processes. Then, as our industry practices deepened and our front-office capabilities deepened, we became the world’s biggest digital agency, for example. Accenture started doing a lot of work in the front office from an operations standpoint, and that evolved as technology continued to get more prolific. Most people know Accenture is a technology firm, and we’re able to bring all of our technology capabilities into this business. Pre-pandemic we were talking a lot about what we call the journey to intelligent operations, and that was about putting tech and data in front of every business process, and really driving more of a human-plus-machine model to executing core functions. The core functions were in the front office — marketing, sales, customer service — in the enterprise functions, which is where the business operated more traditionally, and then in industry-specific services, where we do claims and underwriting in insurance, or pharmacovigilance for life sciences companies. What we realized at that point is that if you put tech, data, and AI in front of every one of these processes, not only can you get the efficiency, but you can become more data-led, and from an outcome standpoint you’re now affecting the top line, the bottom line, the balance sheet. It became much more than just efficiency. I would say now, Phil, in terms of what it’s been like the last couple of years coming out of the pandemic, we’re in a new normal, and that new normal is: employees have different expectations, customers have different expectations, technologies continue to advance, and every client I’m talking to needs to go faster. They’ve got to digitize faster, put more resilience in the business, change multiple parts of the business at the same time. We call that total enterprise reinvention at Accenture, and our strategic managed services business is now really a vehicle to go and execute that transformation.
Phil Fersht — CEO, HFS Research[04:17]
So we talked a lot this morning about surviving in a sort of recessionary or quasi-recessionary environment. What do you advise clients who may be feeling the pressure and the stress of having to reinvent a lot of what they do? What’s the advice you’re giving them in today’s market?
Yusuf Tayob — Lead, Operations, Accenture[04:42]
It’s an interesting market, because as you say, I’m not sure how to classify it. When I talk to clients, they say, look, I need efficiency and I need cost, but I also need growth, and I need those things at the same time in this environment — I can have a difficult time making choices of cost versus growth. Your question is timely, because just almost two weeks ago we put out our latest research on reinventing operations. It’s our flagship research; we refresh it every couple of years, and this is our first refresh post-pandemic. We surveyed 1,700 executives — companies in all industries across the world, of different sizes — and we effectively score them against six criteria. The criteria range from the use of data and AI, to how they apply technology, to how technology leaders and business leaders collaborate, to the talent agenda, to leading practices — the sort of standard things you would see. But the special sauce in what the researchers told us is that it’s not about optimizing each one of those things independently; it’s how those work together that creates competitive advantage and can give you that growth and cost optimization. The good news is there’s lots of room for improvement. Only 9% of those 1,700 clients we surveyed really score at the top end — what we call operations reinventors — which means there’s plenty of opportunity for the 90% of others out there to continue to focus. The reward is great in doing so: those companies in that top 9% get about 1.4 times greater EBIT relative to their peer group, and they’ve returned 2.2 times more to shareholders over a three-year period.
Phil Fersht — CEO, HFS Research[06:21]
Thanks. One of the things that came out of the leadership session we did this morning was the desire for enterprises to get out of the silos and think more holistically — stop thinking about your own little bit and start thinking more about the whole, how finance, procurement, and HR are connected. How do you feel enterprises are moving in that direction, or is it still a big struggle trying to break down those barriers?
Yusuf Tayob — Lead, Operations, Accenture[07:17]
It’s still a big struggle trying to break down those barriers, but I think, again, when I talk to C-suites, they all see the value and the importance of doing so. When you talk about total enterprise reinvention, that is touching multiple parts of the enterprise at the same time, and executing both process, operating-model, and technology changes at the same time — through a process we call compressed transformation. If you’re not collaborating across the C-suite, if you’re not collaborating across the functional silos, then you’re unlikely to get the return on the investment, just because of the speed at which change is happening. And because data is the common thread that goes through all of that, there’s no way you can unlock the value of all of that without breaking down some of the silos.
Phil Fersht — CEO, HFS Research[07:54]
Yeah, exactly. So that takes us to this autonomous enterprise we’ve been talking about — helping clients not just centralize data, access data, and automate data, but also think about patterns and artificial intelligence around data, and how that can enable them to make lower-risk decisions and see things before their competitors do. How do you feel that is evolving? There’s obviously incredible energy around generative AI. I felt this conference was at a good time, because we’re still on the upswing — we haven’t gone into that Dunning-Kruger effect completely yet. There’s a lot of excitement around the shift. So what are you seeing from a client end? Is this something where enterprises are getting quite advanced with exploring things, or is it still very early phases?
Yusuf Tayob — Lead, Operations, Accenture[09:12]
That’s a good question. Let me start by telling you, I love your generative enterprise — I tell a very similar story in terms of how it’s all evolving. For people like us who have been at this a while, I’m very excited about the generative AI prospect and the evolution, because these are things we’ve been talking about for a long time. Many of the same principles still apply. But because the technology has crossed a chasm and there’s a bit of a new paradigm, it’s got the right level of energy and the right level of interest now — across consumers, across enterprises, across every one of us thinking about how it’s going to work. We’ve been in this business a very long time, thinking about this for a long time. We’ve got a platform, Phil, we call SynOps. SynOps is our technology platform that we use to do everything from benchmarking and baselining processes, to automating and orchestrating work, to creating data visualization, to also delivering technology applications on behalf of our clients so they don’t have to build those things themselves if it doesn’t come with the enterprise systems. A core component to SynOps and our journey to intelligent operations on behalf of our clients has been this notion of automation and AI. Years ago we started with very basic automation — transactional tasks that you could automate, if-then type stuff. Then, as data became more prolific, we got into a bit more descriptive and predictive analytics, then the prescriptive phase of analytics, and now we’ve got generative. Generative, obviously as the word implies, is able to create things, and when you can put generative together with predictive and prescriptive, the opportunity in business is exponential. However, in the same way that for transactional automation and predictive and prescriptive you needed to have the data, the same is true in generative AI. Securing your data, the data quality, the availability of data, the integration of data, building that digital core and being able to leverage that across the enterprise, is what’s going to make generative AI either very successful or another great piece of technology that ultimately meets its useful life without being able to be powered with the right information.
Phil Fersht — CEO, HFS Research[11:50]
I’ve been covering this industry for 25 years, and I feel this is the biggest inflection point since offshoring really hit 20 years ago, in terms of there being a real shift in the capability of technology that we didn’t quite get with RPA 10 years ago. We saw the promise of RPA, but it didn’t add enough creative value, business value. This shift to generative — you can feel the value, you can hear the value, you can almost smell the value. In terms of how fast is this going to move, do you think? Is this going to be a roller-coaster move at this point, where a lot of people dive in very aggressively?
Yusuf Tayob — Lead, Operations, Accenture[12:12]
Look, I share your enthusiasm that we’re at an inflection point. I think it’s been years in the making, and the technology is at a point where we’ll be able to do things much faster maybe than we’ve seen before. It’s very early still, but our research indicates that up to 40% of all jobs will in some way be affected — 40% of all roles in the enterprise will in some way be affected by generative AI, some to a great degree, some to a lesser degree. We’ve got five areas where we think generative AI will really play a meaningful role. I was in Bangalore with my team last week and we went through 45 different generative AI use cases, a dozen of which we’ve already piloted against core functions that we drive on behalf of our clients — and all of that’s been developed in the last 60 days. So to your point about speed, we’re able to move much faster now. Those are pilots on really good ideas. Now, the speed to value — the discussion I was having with the team last week is, okay, so if I start applying these now inside the enterprises of the companies we serve, what value will we be able to extract? And the answer is, we don’t know yet, and it quite depends on against which data we’re applying it.
Phil Fersht — CEO, HFS Research[13:57]
When we started moving our businesses online 30 years ago — it’s a long time now — there was a tremendous amount of excitement, and it drove tremendous economic growth because we could do more business, we could do things faster and smarter. Now we’re at an inflection point where we can really do things faster, smarter, better, do our jobs more efficiently. This doesn’t feel like an “oh, how many jobs, how many people can we get rid of because we can use computers.” This is empowering — creativity, commerce, intelligence. This is like taking business to a whole new level, versus something we could cynically look at and think we’re just going to take people out with jobs. Sure, there’ll be some low-end jobs, call-center jobs and things which will be affected, but I think for intelligence jobs, and finance and areas like that, people are going to be empowered, surely.
Yusuf Tayob — Lead, Operations, Accenture[14:48]
Again, I see it the same way. We’ve been employing a human-plus-machine approach since machines existed in our BPM business, which really is an evolution. It’s why we call it strategic managed services now — it’s a tech-, data-, and AI-powered business, with people to help execute. I’m extremely excited about this. Every time we’ve had technology innovation, it’s provided more opportunity, not less — not just for our business, but for what our clients can do. And to your point, the opportunities it provides our people in terms of the type of work they get to do — we spend a billion dollars a year at Accenture on training and development of our people. A billion dollars a year. I’m excited to spend that billion dollars a year on training a different skill set, upskilling. That’s what we’ve always done: as technology has matured, we’ve developed people in different ways. It’s given them different career paths, more meaningful opportunity, and more rewarding work to do.
Phil Fersht — CEO, HFS Research[15:40]
I think it’s also changing the skill-set background — you don’t need to be an algorithmic specialist or a computer science graduate to do this. You can go to OpenAI and create your own chatbots tomorrow on no-code. It’s incredible.
Yusuf Tayob — Lead, Operations, Accenture[16:05]
You could do that. But again, I would take you back to the data. Where that’s going — it’s a lot of fun to go out there and play with it, but how we’re going to apply it in business to create value for the enterprise in a secure and responsible way has a lot to do with building your digital core, and doing all the other things you have to do inside the enterprise to be able to get the value out of that.
Phil Fersht — CEO, HFS Research[16:24]
Got it. So people are going to see “here’s the value,” but we’ve got to fix the digital core, the data core, so we can actually get there. Because it’s a great tool, right? But without the data, without access, without security — what provides the unique advantage, the competitive advantage inside one enterprise versus another? That’s where the opportunity is. This is great. So one final question, Yusuf. This has been great, but once the hype dies down — and it is a bit of hype, let’s be honest — when we find a new rhythm, what do you think the conversation’s going to be based around?
Yusuf Tayob — Lead, Operations, Accenture[17:13]
We did another piece of research around Davos, all around this notion of total enterprise reinvention. One of my favorite data points that came out of that was — we had a lot of data that talked about how much companies will continue to invest in technology and data specifically, and the research also told us that when companies invest commensurately in people and culture as they do in tech and data, they get an 11% productivity boost. That’s always been the case, right? As long as we’ve been putting in technology, we’ve been saying it’s technology, but it’s also people and it’s process. And yet we continue to invest in technology, but the companies that get it right make that commensurate investment in people and in culture. What technology does is allow us to move some of these things faster — I think this will allow us to move some of these things faster — but the winners, I hope the conversation is about the people, the reskilling, the culture, the operating model, the breaking down of the silos, the customer experience, because this is going to allow us to achieve many of those things faster.
Phil Fersht — CEO, HFS Research[18:21]
I feel like we need this. We come out of a pandemic, and I think people are a little jaded from the whole experience, and we don’t want to go back to just the drudgery of how we used to do things. This feels like a little jolt of excitement — hey, we can actually do things faster. If you know what you’re looking for, you can get the information you need incredibly quickly. You can collaborate with colleagues and drive new process, new design, everything. So I’m excited. I think we should all be. I feel much more excitement than negativity — and trust me, I can get negative on things. Thank you very much, Yusuf. It’s been great hearing your thoughts and hearing how you’ve got this thing over $10 billion of operations. That’s phenomenal — I remember when it was like 2 or 3 billion.
Yusuf Tayob — Lead, Operations, Accenture[19:08]
Thank you, Phil. Pleasure to be here.
