Dive Brief:
- Enterprises are shifting IT spending to investments that support data modernization and AI technologies rather than increasing overall budgets, Accenture Chair and CEO Julie Sweet said Thursday, during the company's Q4 2024 earnings call for the three-month period ending Aug. 31.
- "What we are seeing is that as they’re saving money, they want to invest it in things like AI and data," Sweet said Thursday. "That's really the dynamic that's going on: save to invest."
- Generative AI, while still a small fraction of total revenue, yielded $1 billion in new bookings on the quarter and $3 billion for the fiscal year, Sweet said. The company’s revenue grew of 3% year over year to $16.4 billion and just 1% on the year, to $64.9 billion.
Dive Insight:
As budget season approaches, enterprises are laying the groundwork for generative AI. The technology is shaping spending priorities, driving investments in cloud and data, according to Accenture.
CEOs have not indicated a willingness to increase discretionary spending, Sweet said. Instead, executives are focused on core digital capabilities.
Enterprises aiming to ease AI adoption are investing in mainframe and data estate modernization projects. Even applications that have already migrated to cloud require attention, according to Sweet.
“You have those who are farther along, who are now getting to the harder applications, like mainframe, and then we still have a lot of modernization,” Sweet said. “What happened in the pandemic is people who were trying to get to the cloud to get the infrastructure savings have not yet done the modernization.”
Workforce upskilling is also on the leadership agenda at Accenture and among its customers. The firm acquired online training platform Udacity in March as part of a $1 billion investment in its LearnVantage talent assessment and upskilling platform.
“Businesses need to focus on talent,” Sweet said. “Their ability to unlock the potential of talent is critical. We see talent as a top C-suite agenda item today.”
Accenture increased its data and AI workforce to 57,000 practitioners in the last year. Employees clocked 44 million training hours, a 10% year-over-year increase, which Sweet attributed primarily to AI upskilling.
Accenture is working with S&P Global to outfit the financial data company’s 35,000 employees with generative AI skills as part of a partnership announced last month. The firm was also tapped by TIAA to enhance the investment firm’s cloud and digital capabilities last month.
“One of the biggest limitations on using GenAI today, and why it's going to take a while, is [that] our clients need data,” Sweet said. “Our clients have a lot of work to do on data, which is, of course, a big opportunity for us.”
