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[Published originally in the January 2004 edition of Computing Research News, Vol. 16/No. 1, pp. 1, 6.]

Accenture Technology Labs: Creating Business Opportunities from Technology Innovations

By Anatole Gershman

Accenture is not a product company—it does not develop either hardware or software products. If it were, describing the role of R&D in Accenture would be easy. Instead, Accenture is one of the world’s largest consulting and outsourcing companies that helps its clients achieve high business performance by deploying leading edge IT systems and reorganizing client processes around innovative technologies. In a product company R&D is intended to make a better product that will be competitive in coming years. But what does it mean to do R&D for a company intended to help clients “achieve high performance?”

Accenture’s clients are in practically every business, from banks and telecommunications to healthcare and municipal services. They utilize every conceivable kind of information technology in a very broad range of business applications, from supply chain to customer service. While the systems we install are fairly standard vendor offerings, each installation is a unique combination of multiple products achieving highly customized and innovative business results. It follows, then, that the primary role of our R&D labs is to help our practice apply emerging technologies to achieve higher business results for our clients. For example, it would be typical of our research to take the features likely to be found in the next generation of products (such as cell phones or industrial sensors), and figure out and demonstrate how they might be used in a variety of industries and the impact they will have for clients in those industries.

The challenges that we face are twofold: determining what the focus of our R&D activities should be and how we should achieve an impact on the firm’s business. Given our relatively small size, we have to focus on technologies that we believe will achieve a significant business impact within the next four to six years. Within this timeframe, information technologies that are driven primarily by Moore’s Law will typically achieve an order-of-magnitude improvement in their price/performance. When something becomes 10 times cheaper or 10 times more powerful, radically new applications become possible. This is especially significant when a new technology is likely to become embedded in the common infrastructure.

For example, about 6 years ago, we started looking at RFID tags. At that time, they were relatively expensive objects of curiosity with very few business applications. We had no doubts that the prices for the tags and the readers would eventually fall and that common standards would emerge. We believed that once this occurred, RFID tags would become a ubiquitous part of the physical commerce infrastructure with profound consequences for many business applications. Our R&D labs explored many potential applications, building numerous prototypes and demonstrations, and engaged our clients and practitioners in hundreds of workshops and discussions. As a result, Accenture is now in the forefront of the emerging market for RFID applications.

RFID is one example of a broader vision that guides our research—we call it Reality Online. At its core is the observation that ubiquitous sensors and actuators combined with pervasive communications will provide information systems with “eyes, ears, and fingers.” Such systems will become a real-time reflection of the physical world, capable of affecting it in real time as well. Combined with the increasing availability of vast computing and storage resources, this capability will enable intelligent “sense and respond” business strategies that are not economical today. Our current research program covers the following themes and topics.

Silent Commerce

This area encompasses applications of sensing and tracking of physical objects and their conditions. While the simpler inventory control applications of RFID technologies have moved from R&D into our practice, we are exploring more complex sensory networks that enable real-time detection of various business events, such as agricultural crop conditions or unauthorized removal of objects. Tracking people and their activities with video cameras and other sensors is of particular importance because it has many applications, ranging from law enforcement to in-home care for the elderly.

Information Insight

As sensory networks, from cash registers and tag readers to electronic noses and security cameras, produce an avalanche of information, we need to deploy considerable intelligence to transform these data into useful and timely business insights. Suppose you are a retailer and your customers allowed you to follow them all day long and know exactly what they do. Suppose also that you could whisper your promotional messages into your customer’s ear at any time of your choosing. What would you say to them and when? How much effect will this capability have on your business? Advances in ubiquitous computing infrastructure will create this problem for tomorrow’s retailers.

The public and private Web provides access to an enormous variety of information from scientific data to personal opinions in news groups. In bioinformatics alone there are many dozens of sources of scientific data and publications. Bio-medical and pharmaceutical researchers spend many hours sifting through this information to find the nuggets they need. The problem is complex because each source is owned by a different organization with its own access method, organization, and search engine. As a result, it is difficult to answer even simple questions such as: “Which genes and proteins are related to lung and airway diseases?” or “Which drugs may affect psoriasis?” Similar situations can be observed in many other areas of applications, from environmental control to law enforcement. Our research in this area is focused on automatic and semi-automatic creation of semantic indices for large knowledge domains based on domain knowledge models.

Human Performance

Despite all the advances in automation, most business processes require human teamwork and decision making. With the spread of globalization and business process outsourcing, work teams are often geographically dispersed and belong to different organizations and companies. In these situations, effective collaboration and efficient knowledge transfer and management become business critical. At the same time, the tools for collaboration and knowledge sharing, such as instant messaging, web logs, application sharing, etc., are becoming more sophisticated and reliable. Our research is focused on utilization of these tools in support of specific business processes.

Clearly, there is a great overlap between human decision-making performance and information insight. We explore how simulation, optimization, and visualization techniques can be used to help people make better decisions, increasing their efficiency and reducing the risk.

Media-Rich Services

Continuing advances in communications, proliferation of digital cameras (still and video), and the decline of the flat-panel display prices have the potential of changing the competitive landscape for many industries. Cell phone manufacturers are now putting more cameras in the hands of users than traditional camera manufacturers. The amount of media produced by individuals is already dwarfing professionally produced content. Yet, we do not see many examples of innovative services that take advantage of these new capabilities. A couple of examples can illustrate the problem.

Today, consumers use telephones to tell businesses about their problems. With the proliferation of camera phones, they will want to show businesses their problems (a broken faucet or a shirt they want to match). What will this do to customer services based on call centers and automated voice response systems? Today’s digital cameras represent the 21st century’s way of capturing personal media. Printing pictures and putting them in a photo album takes us back to the 19th century. What services can media companies offer that will create personal (or small group) experiences combining personal and professional media?

Privacy and Rights Management

These are services that help people and organizations take full advantage of the new technological capabilities, while protecting their privacy and intellectual property rights.

Achieving Business Impact

Selecting the right areas for research does not by itself guarantee relevance to the firm’s business. Given our relatively small size—about 140 people—we need to be especially creative in trying to influence the firm of 85,000 practitioners. Over the years we experimented with several models of innovation pipelines. In the current model, Accenture Technology Labs operate in three locations with about half of the personnel in Chicago and one quarter each in Palo Alto and Sophia Antipolis (France). This geographical distribution is necessary to remain close to our practice. All three labs perform the same four functions: research, development, client workshops, and innovation networking.

Researchers constitute about one quarter of the Labs’ personnel. They are fully funded internally and the majority come from an academic background having Ph.D.s in Computer Science or related fields. Researchers are focused on tomorrow’s problems four to five years ahead of the market.

Developers constitute about two-thirds of the Labs’ personnel. They have to spend 50 percent of their time on client-related projects and generally have backgrounds similar to our line practitioners. They focus on commercialization of innovation through first-of-a-kind client engagements. They also work closely with researchers to identify the commercial potential of new technologies.

Client workshops are pivotal to the success of the Labs. Typically a client comes for a full day of demonstrations and discussions tailored to their needs. This is where our researchers meet clients and get exposed to real problems. They get an opportunity to try out their ideas and to get real-life feedback. Our developers get a chance to test their commercialization ideas. We run about 150 such workshops per year. Most of the Labs’ practical engagements originate with a client workshop.

Everybody in our practice is very busy with client work. At the Labs, we cannot simply sit and wait until the phone rings with someone looking for innovation. We spend a great deal of energy and resources pro-actively looking for innovation opportunities. We have senior managers dedicated to specific market units organizing client workshops, educating our practice leaders and our R&D people, and connecting the Labs with potential opportunities.

This model has been working fairly well, but we are continuously looking for further improvements. Accenture Technology Labs has been an exciting place for researchers who are interested in broad business problems and for developers interested in commercialization of emerging technologies.

Anatole Gershman (anatole.v.gershman [at] accenture.com) is Accenture’s Director of Research.