CASE STUDY

Accenture’s acquisitions advantage

Accenture’s seasoned approach adds value and fuels growth.

How We Add Value and Fuel Growth
Well-Honed, From Start to Finish
Building a Vision for the Future
Meet the Team
Related Capabilities

How we add value and fuel growth

Rapid advancements in technology along with disruption across global industries are driving a need for reinvention. At Accenture, we have identified five key forces of change that are essential to success in the next decade: total enterprise reinvention, talent, sustainability, the metaverse continuum and the ongoing technology revolution. But capturing the power of these forces requires that we add new, innovative offerings and expand the boundaries of our digital capabilities. To help us make these shifts quickly, we used a tried-and-true tool: Mergers and Acquisitions (M&A).

In recent years, we’ve gone from making just a few acquisitions a year to more than 140 deals in the last four years alone. Along the way to becoming a successful serial acquirer, we have moved from being a small corporate development group to a robust, agile environment where M&A knowledge is institutionalized across our business leadership with a structured framework through all phases of the M&A lifecycle such as a common approval framework across the globe and a lookback process stage to track success three years post-acquisition. This enables us to focus on our strategic priorities, execute with speed and implement an integration plan with confidence that leverages our experiences across more than 300 acquisitions worldwide.

To reach this state, we industrialized our approach end-to-end. We focused on proactively identifying the right acquisition targets to further our corporate strategic goals. To maximize the value from each deal, we developed a world-class capability to successfully integrate companies and maintain post-integration momentum, allowing us to respond swiftly to our client's needs while having an eye on the future.

To make the most of each deal, we strengthened our processes for integrating companies and, equally important, maintaining post-integration momentum. This means we can respond swiftly and strategically to new opportunities, with an eye to future growth.

Accenture has built a reputation among small businesses and their advisers as being a good acquirer. They value our brand, our channel, our "culture of cultures," and our ability to be good stewards for their people and for their clients.

Well-honed, from start to finish

Two factors make our corporate development team’s M&A capability distinctive: the breadth and depth of the collective knowledge of our people, and our close collaboration across all internal teams. We have developed a formalized M&A process that allows us to act on today’s wave of strategic priorities and deliver results across the four phases of the M&A life cycle—origination, transaction, integration and delivery.

Origination made strategic

We have a defined approach and clear criteria for how we evaluate target companies. Accenture’s M&A has three key objectives: 1) scaling our business in areas of opportunity, 2) deepening industry and functional expertise and 3) adding new skills and capabilities. We manage the origination process using a cloud-based pipeline and workflow management tool, which enables us to work with “one version of the truth” across the whole company.

Transaction made smooth

Our M&A framework is formalized end-to-end and supported by accountability from senior leadership and overall governance from our C-suite. As a result, we are disciplined about putting an offer on the table. We stand out in our speed and certainty to close, qualities that are attractive to sellers, founders and management. Key to our success has been our reputation as a good acquirer: Many companies we target are interested in becoming a part of Accenture and value our brand, channels, and ability to be good stewards for their people and clients.

Integration made seamless

We are obsessed with integration. Why? Because it is fundamental to realizing value. Acquisitions of services companies are about people, clients and relationships, so integration is a critical stage of the process. We have a deeply skilled strong post-merger integration team dedicated to helping companies assimilate into Accenture while preserving the unique characteristics that led us to acquire them in the first place. We aim to make the experience as positive as possible for the acquired workforce, to ensure we retain and attract talent.

Value made continuous

Initial integration is only the beginning: Maintaining momentum long-term is key to maximizing results. To do this, we look beyond the integration phase into ongoing operations. This includes holding sponsors accountable for the business cases they’ve provided, conducting regular status reporting to our Investment Committee for three years and monitoring overall status of the acquisition portfolio over time using a performance dashboard. To ensure we are continuously improving the way we handle all stages of the process, we emphasize knowledge sharing and deploy a portfolio of methods, tools and technologies to share learnings across the organization.

Building a vision for the future

Today, Accenture is a leader in using mergers and acquisitions as a mechanism to drive future growth in new and emerging strategic priorities—essentially organic growth through inorganic acquisitions. Our world-class corporate development team has achieved an annual investment of, on average, over $2 billion in acquisitions over the past five years. As part of our capital allocation strategy, we aim to invest around 20-25% of operating cashflow each year and through the business cycles.

Our view is that acquisitions are not a strategy in and of themselves. Rather, our corporate development team works with our business teams to help realize an independently developed business strategy, with acquisitions as just one tool used to achieve that strategy.

We took this approach with developing Accenture Song. More than a decade ago, our marketing services group had a vision for a new way to provide digital marketing services to corporations. Today, through dozens of key acquisitions such as Droga5, as well as organic growth and internal capabilities, the venture has grown into one of the largest digital agency networks in the world.

The creation and development of Accenture Song showed that strategic acquisitions could speed growth and creativity in powerful ways. It is a model for our ongoing moves into Industry X, where manufacturing and technology converge. To prepare for future needs in data-powered digital engineering and manufacturing, we are proactively integrating companies with future-focused skills and technologies, such as umlaut, which added 4,200+ industry-leading experts across 17 countries to our Industry X services.

Our M&A journey will not stop here. As companies seek to harness the five forces of growth, their needs will continue to evolve. By continuing to focus on M&A strategies that boost our capabilities in total enterprise reinvention, talent, sustainability, the metaverse continuum and the ongoing technology revolution, Accenture is prepared to evolve with them at an ambitious pace.