Accenture CEO Nanterme: 'It Would Take Two Days' To Describe All The Opportunities Around AI


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The next wave of disruptive technologies is emerging fast, according to Accenture CEO Pierre Nanterme, and these new markets are precisely where the consulting giant plans to focus its attention.

The Dublin, Ireland-based company, No. 2 on the 2017 CRN Solution Provider 500, already has made big investments in areas such as mobility, analytics, cloud and security. Looking ahead, Nanterme sees artificial intelligence, immersive reality, blockchain and quantum computing among the new technologies that will guide Accenture's strategic direction.

"We could say 'the new' is the business of Accenture," Nanterme told Wall Street analysts Thursday on the company's second-quarter earnings call. "We will continue talking about it. These new, emerging, disruptive technologies will continue coming at an incredible pace."

[Related: Accenture And Pivotal Launch New Business Unit Around Cloud Foundry]

With regard to artificial intelligence, Nanterme said Accenture is centering its focus around analytics and machine learning. The manufacturing industry's investment in IoT sensors has enabled plenty of data mining opportunities in that space, he said. But the executive also pointed to the high-potential predictive business, where Accenture sees "massive applications" in health care and life sciences.

Nanterme highlighted how machine learning can be used to improve cancer diagnoses and the recommendations doctors make to patients.

"It would probably take two days to mention all the opportunities we see in applying the artificial intelligence across the globe," he said. "We look at it as applying [AI] to create the value. That's why we call it applied intelligence and not AI. We're pushing people to deliver value to clients."

On the topic of blockchain, Nanterme said Accenture is beginning to move out of the prototype and proof-of-concept phase on a number of projects, which are "starting to get some scale." Applications he sees include the banking and financial services industries, opportunities around supply chain tracking and security in the shipping industry, and document and contract management.

"We're starting to see what's most important, what the relevant areas are where blockchain could create value," Nanterme said. "That's what we're doing in our labs and what we're doing co-innovation on with our partners. The big question is how you create business and value out of this new tech."

Nanterme added that, as with its other investments in emerging tech, Accenture is starting with work built around services, strategy, consulting and "high-end" tech implementation. Down the road, he said the company will begin to layer in more delivery and operation services, as it did in the security business by adding managed security services.

Accenture is also working to continue modernizing its core business by bringing in more robotics and automation capabilities to areas such as application outsourcing and business process services.

"We didn't play defense, which is something we don't like to do. We played the attack by modernizing our core business," Nanterme said.

The quarter brought record new bookings of $10.3 billion for Accenture, which Nanterme said were evenly distributed across business divisions. Consulting bookings accounted for $5.7 billion of that total, while outsourcing bookings were $4.6 billion.

Accenture reported companywide revenue of $9.59 billion for the second fiscal quarter ended Feb. 28, 2017, up 15 percent from last year's second-quarter mark of $8.32 billion. That beat Seeking Alpha's projections by $280 million.

The company's communications, media and technology business grew 15 percent to $1.93 billion for the quarter; financial services grew 14 percent to $2.02 billion; health and public services increased its business by 9 percent to $1.64 billion; products grew 16 percent to $2.63 billion; and resources expanded by 17 percent to $1.34 billion.

Net income for the quarter was $920 million, or $1.37 per diluted share, which was up from net income of $887 million ($1.33 per diluted share) in the second quarter of 2017. On a non-GAAP basis, the company reported net income of $1.06 billion, or $1.58 per diluted share. That performance beat Seeking Alpha's estimates by 9 cents.

The company saw a charge of $137 million related to the U.S. Tax Cuts and Jobs Act, for an effective tax rate of 26.1 percent.

Accenture updated its fiscal 2018 guidance, projecting full-year revenue of $37.3 billion to $38 billion – a year-over-year increase of 7 percent to 9 percent – and earnings per share of $6.61 to $6.70.

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