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From Mass Layoffs to $3bn Investment: Accenture’s Shift Towards AI Transformation

KEY TAKEAWAYS

Accenture's $3 billion investment in its Data & AI division over three years reflects the company's commitment to assisting clients in harnessing the transformative power of AI responsibly and effectively. By doubling its AI talent, developing industry-specific solutions, and offering resources for ethical AI practices, Accenture aims to drive innovation, reshape strategies, and accelerate business value across various sectors. This significant investment, along with similar commitments from other industry leaders, highlights the potential of AI to revolutionize operations and enhance customer experiences in the future.

Accenture has announced a $3 billion investment in its Data & AI division over three years to assist clients across all sectors swiftly and ethically progress and deploy AI to achieve better growth, efficiency, and resilience.

Julie Sweet, chair and CEO of Accenture, said: 

There is unprecedented interest in all areas of artificial intelligence, and the substantial investment we are making in our Data & AI practice will help our clients move from interest to action to value responsibly with clear business cases.

Sweet added that companies that lay a strong foundation for AI now would be better positioned to reinvent, compete, and achieve new performance levels when the technology is mature and delivers clear value.

Accenture’s AI Efforts

Accenture has integrated AI into its service delivery methodology, increasing efficiency, insights, and value for thousands of clients via market-leading platforms such as myWizard, SynOps, and MyNav.

It pioneered its responsible AI framework six years ago; this is now part of how it delivers customer work, is incorporated in the company’s code of conduct, and underpins its rigorous, responsible AI compliance program.

Accenture collaborates with several customers on generative A.I. initiatives, such as assisting a hotel company in managing customer inquiries or assisting a judicial system in synthesizing judicial process knowledge across hundreds of complicated documents.

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How Investing $3 Billion in AI Will Help Accenture

Accenture announced 19,000 layoffs in March of this year; however, the layoffs will not occur all at once. Instead, thousands will lose their jobs over the span of the following 18 months. At the time, the corporation also stated that the layoffs were part of its cost-cutting initiatives. Over-hiring was another factor mentioned by the corporation for the layoffs. 

However, the company seems very committed to using AI to drive innovation.

Through a combination of recruiting, acquisitions, and training, the Data & AI practice will double its AI talent to 80,000 employees, according to an official announcement. Accenture will develop accelerators for data and AI preparation across 19 industries and ready-made industry and functional models using new generative AI capabilities. 

According to Paul Daugherty, group chief executive of Accenture Technology, the company’s Data & AI practice combines the full power and breadth of Accenture to create industry-specific solutions that will assist their clients in utilizing AI’s full potential to reshape their strategy, technology, and methods of operation and to drive innovation and value responsibly and more quickly than ever.  

Accenture said that its brand-new AI Navigator for Enterprise is a platform powered by generative AI that will assist customers in defining business cases and selecting architectures. The platform will feature resources to speed up ethical AI practices and compliance initiatives. 

The business will also provide pre-built industry and functional models that use new generative AI capabilities and accelerators for data and AI readiness across 19 sectors. 

Accenture’s historic $3 billion investment in its Data & AI group demonstrates the firm’s vision and desire to create the future of AI-driven transformation.

Impact on the Industry

Artificial intelligence is the new buzzword in the world, and increasingly, businesses are incorporating the growing technology to remain ahead of the competition. Companies such as Canva, LinkedIn, Meta, and Google, to mention a few, have lately launched AI-powered functionality for their products.

Since 2010, corporate earnings have steadily declined, threatening future investment, innovation, and shareholder value. Labor, capital, and productivity, the traditional drivers of economic development, are not providing the customary boost. However, the world may be amid a new industrial revolution, fuelled by AI, that might restore global economic growth to the 1960s and 1970s levels.

It is believed that “AI has the potential to drive much faster growth in the global economy.” It isn’t only a productivity-boosting technology but also a type of capital and a virtual workforce in and of itself. It can be an individual factor of production by itself, he argues.

Accenture discovered in a study of 12 industrialized economies that integrating AI may quadruple the yearly GDP growth rate by 2035.

Another study, which analyzed the effect of AI across 16 industries, found that it can increase profitability by an average of 38%, breaking the low-profit cycle many firms have been trapped in over the last decade. 

Computer vision (CV), machine learning (ML), deep learning, and natural language processing (NLP) are all examples of artificial intelligence technology. According to Omar Abbosh, Accenture’s former Chief Strategy Officer, each may handle various problems. However, when joined, they produce much more value. 

Regarding corporations that used to run large call centres, the slogan for the last 30 to 40 years has been ‘How can I make that customer call efficient?’

Abbosh explained:

I can now have a chatbot do tedious, repetitive tasks like resetting customers’ passwords or confirming bill statements at near-zero cost.

This, essentially, frees contact centre agents to focus on value-added duties and provide better assistance in more complex situations.

Corporate Behemoths Are Jumping on the AI Bandwagon

Accenture is well-positioned to lead the charge in offering cutting-edge AI solutions to enable businesses across sectors. Its investment lays the groundwork for a new era of innovation, development, and industry change as artifical intelligence revolutionizes our work.

In April, PwC pledged a $1 billion investment over the next three years, while EY promised a $2.5 billion investment in 2021. Bain & Company announced services alliance with OpenAI, the creator of ChatGPT. And IBM, whose AI effort stretches back to the debut of Watson, has announced the establishment of a “Center of Excellence” for generative AI.

On June 12, Salesforce announced a $500 million venture capital fund for generative AI startups and an AI cloud service to entice corporations by bringing AI-powered products under one roof.

Lenovo of China has also committed a $1 billion investment over three years to accelerate corporate AI use. This investment includes a promise of an extra $100 million to extend the Lenovo AI innovators program.  

The spike in interest from organizations across all industries demonstrates AI’s enormous potential to change operations, expedite procedures, and improve consumer experiences.

According to PitchBook, investments in generative AI alone are anticipated to reach $42.6 billion by the end of the year.

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Emmanuel Baiden

Emmanuel is an experienced sales manager and trader with a nine-year tenure in the financial markets. Throughout his career, he has managed the accounts of institutional companies, professional and retail traders, and high net-worth individuals making six-figure profits in the process and having millions in AUM. In addition to his practical experience, Emmanuel has actively engaged in writing about the crypto realm, covering topics such as crypto market analysis, advancements in Web3 technologies, and the transformative potential of blockchain.