Julie Sweet and Phil Fersht discuss the future of services and the evolution of work

The future of services must be built on shared purpose to maximize value and drive real change. That was the clear takeaway from the HFS Super Summit virtual fireside chat between the reigning chair and chief executive officer of Accenture, Julie Sweet, and HFS’ founder, chief executive, and chief analyst, Phil Fersht.

The discussion focused on the future of services and the evolution of work with five key themes:

1. The future of services is about creating a shared purpose to get beyond cost takeout.
2. Managed services have moved from a tactical lever to a strategic value driver in the CEO’s agenda.
3. Co-creation between enterprises and their service partners is fundamental because many solutions to business problems do not exist yet and must be invented.
4. Ecosystems are critical because you can’t solve modern business problems alone.
5. To enable change, you must be able to articulate it and measure it, bringing us full circle to the enablement of purpose.

Driving shared purpose

Phil, who spoke to similar themes in his keynote for the Super Summit, kicked off the conversation by asking Julie to comment on how service relationships are changing and becoming more purposeful as we come out of the pandemic. Julie dove in, articulating three client examples from different regions of the world illustrating where and how we might all encounter services as part of our daily lives: enabling faster and less expensive car loans in Latin America, enhancing the luxury car ownership experience at Jaguar Land Rover, or enabling the supply chain demand forecasting of a North American retailer so their goods were more readily available during the pandemic. Her unifying point was that services are all around us and touch every aspect of our lives. These are not tactical vendor-client relationships. The evolving services market has become a mission of shared purpose with clients and service providers closely partnering to achieve much more beyond cost takeout. Julie stated, “These examples are not about cost. They are about a shared purpose—driving growth, making products more available, and being more resilient. And, yes, they also involved a decrease in cost, but with a purpose.”

Julie referenced recent research by HFS, noting the journey in Exhibit 1 from effort to performance to purpose reflects the journey Accenture is on with its clients from a commercial construct and regarding how the C-suite realizes value.

 Exhibit 1. Stages of maturity and value in services relationships

Source: HFS Research, 2022

Managed services comes into its own

One of the increasingly not-so-secret weapons Accenture uses to help its clients and deliver on shared purpose is managed services, typically a mix of tech, talent, and services. Managed services is not new. But as Julie explained, “CEOs are seeing managed services, both technology and operations, as core to their strategy to digitize faster, access talent, and achieve outcomes beyond costs. I’ve done, in the last three quarters alone, over 200 client meetings. I would tell you 85% or so involved some discussion about how managed services may help accelerate their transformation.”

As enterprises reinvent themselves, co-creation is essential

Phil asked about the need for co-creation with clients. Julie indicated that as we see a massive proliferation in the use of tech, data, and artificial intelligence (AI) in every part of organizations, there is a huge need to harness capabilities and co-innovate new solutions with both their tech partners and clients. She cited an example of Ecopetrol, a Columbian oil and gas client that it developed a water management platform collaboratively with and one of its cloud partners. Ecopetrol and the team developed the platform from scratch for industry-wide use; Accenture provided a component of the solution back to Ecopetrol as a managed service.

Ecosystems are essential to co-creation and enabling a shared purpose

HFS defines ecosystems as collaboration across multiple organizations with common objectives around driving completely new sources of value. Julie noted how critical ecosystem partners are when developing new solutions and innovations. As managed services and tech become core to enterprise growth, enterprises need more new, purpose-built solutions, making development-capable partners critical.

As an indication of how important ecosystem partners are to Accenture, Julie indicated she measures her performance in terms of both client meetings and ecosystem partner meetings. In the last three quarters, more than a one fourth of her meetings were with ecosystem partners. She also underscored how she encourages clients to meet with and discuss their ecosystem partners’ roadmaps, which will impact their own roadmaps. This is another reflection of the implication of shared purpose extending to collaborative roadmap planning with partners.

To enable change, you must articulate and measure it

Phil turned the lens on Accenture, a massive company closing in a million employees, and asked Julie to comment on how it can stay nimble and relevant to clients. Since commencing her tenure as CEO back in September 2019, she has focused on three key concepts:

• First, understand the cultural change you need to make. Julie clarified, “In our case, when we created digital, we said we needed a ‘distinct but connected’ culture because we needed to nurture a new kind of talent. We needed to create solutions, so we moved from a culture of ‘distinct but connected’ to ‘shared success,’ and we put things behind it.”
• Second, pick the right priorities. Julie ensured her senior leaders prioritized client and ecosystem meetings driven by the logic that if you are engaged with clients and partners, you know their needs and can make progress and drive value.
• Third, do things differently. In some cases, Julie reset annual strategic priorities from a fiscal-year goal to a six-month goal because it’s challenging to create change if you say to everyone, “Our change only operates on the fiscal-year cycle.”

These approaches, combined with Accenture’s strategy to deliver 360-degree value to its clients, have helped Accenture achieve both nimbleness and, more importantly, relevancy built on shared value to its clients. Julie notes that many enterprises think of their partners in silos, but the abilities to integrate, support client initiatives end-to-end, and meet needs such as talent and development, sustainability, and growth are critical to changing the mindset and delivering greater value.

And if you really want to move the needle on anything, you must state goals and measure them. Julie reinforced, “To move from commitment to action starts with setting goals.” She rounded out the conversation by sharing some of Accenture’s glowing stats on diversity and sustainability achievement as proof points.

The Bottom Line: The future of managed services is strategic, co-created with clients and ecosystem partners and additive to the top line, not just the bottom line.