CASE STUDY

Accenture’s acquisitions advantage

Accenture’s seasoned acquisition capability is a strategic lever in capturing value and fueling organic growth.

Call for change

When tech meets human ingenuity

Accenture’s Corporate Development team’s mergers and acquisitions (M&A) capabilities have gone through several evolutions in the last 20 years. What makes our M&A capability distinctive today is the combination of the collective knowledge of our people and the collaboration with many other Accenture functional teams honed over many years. We now have formalized M&A processes, including the way of working with Accenture leadership to define today’s wave of strategic priorities.

Strategic priorities
We have a focused strategy with clearly defined priorities and criteria for how we evaluate target companies. Accenture’s M&A activity is focused in three areas: 1) to rapidly scale in hot areas in the market, 2) to deepen industry and functional expertise, and 3) to acquire new capabilities.

We have found that many companies we target are interested in becoming a part of Accenture and being part of our journey to deliver on the promise of technology and human ingenuity. 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. These qualities have worked to our advantage.

M&A framework
We formalized our M&A framework end to end. Our M&A framework is robust and underpinned by clear courses of action that enable coordination and collaboration across the four phases of the M&A life cycle—origination, transacting, integration and delivery. It is supported by accountability from senior leadership with overall governance at the C suite. In addition, it is not only Finance, but other disciplines that engage with an acquired company to ensure full integration into Accenture. Our M&A framework is focused, dynamic and refreshed as needed.

A major advantage of a strong M&A framework is that today Accenture is very disciplined about putting an offer on the table to target companies. We stand out in our speed and certainty to close, qualities that are attractive to sellers, founders and management. As a result, Accenture has a very high close rate when we have an agreed, exclusive letter of intent (LOI). Additionally, of all the acquisition deals Accenture does, the vast majority are self-originated and stay exclusive—a distinguishing quality for Accenture in the market.

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.

Integration of acquired companies
Accenture obsesses about integration. Why? Because it is fundamental to realizing value in any acquisition. Acquisitions of services companies are about people, clients and relationships, and so integration is a critical stage of the journey. Accenture has a deeply skilled, strong post-merger integration team dedicated to the assimilation of acquired companies into Accenture and a thorough operation.

The goal is always to fully integrate a company while preserving its unique characteristics that led Accenture to acquire it in the first place. We also place a priority on respecting the acquired culture enabled by Accenture’s “culture of cultures” philosophy. At the heart of our approach is the focus on making the journey of the acquired workforce into Accenture as positive an experience as possible to successfully retain and attract talent.

Maintaining post-integration momentum
Maintaining post-integration momentum is also essential. Accenture excels at this stage by continuing to focus on the acquired business beyond the integration phase into ongoing operations. There are many key aspects including making business sponsors accountable for business case realization and conducting formal status reporting to Accenture’s Investment Committee every six months for three years. This is a forum for assessing performance against the original strategic rationale and the business case with an emphasis on forward-looking interventions. To monitor overall status of the acquisition portfolio over time, we use a performance dashboard.

Continuous improvement
Our Corporate Development team greatly emphasizes collaboration, knowledge sharing and networking to continuously improve on the way we do things around execution and integration. To capture these insights, we deploy a portfolio of methods, tools and technologies to share best practices and lessons learned across the organization. We manage the origination process using a digital, cloud-based pipeline and workflow management tool, which enables us to work with “one version of the truth.” A web portal houses our collaboration tools, helping us to collaborate seamlessly.