Accenture is a Fortune 500 company that provides consulting and professional services across the globe. Over the years, the company has acquired many tech companies and frequently appears in Corum sector reports as the leader in number of tech deals. In a recent Tech Exits: Buyer's Corner interview, we had the opportunity to talk to John Kinnaman, Managing Director in Accenture's high-tech strategy practice where he focuses on growth strategy and M&A across the communications media and high-tech sectors. Here are some of his insights.

The push to the edge

One of the things Kinnaman has seen across industries, particularly within tech, is a move to edge computing, where processing is done in local devices and data is communicated between these devices in a distributed network. A fundamental element of edge computing is the Internet of Things (IoT), which refers to the network of devices that are embedded with sensors, software, and other technologies that are used to exchange data with other devices in the network.

Because a lot his strategy practice focuses on the telecommunications sector, Kinnaman has seen a growing adoption of IoT technologies in telecomm. He said, "I've done some work with some telecom companies over the last few years, developing their strategies around IoT, which is really a key ingredient of being able to function at the edge. I've also been working with infrastructure providers who provide the cell towers that we use. They're particularly interested in the edge and thinking about areas such as healthcare, for example, being able to deliver remote medicine, something that depends critically on the edge. But I think if you pick any industry, you're going to find executives talking about either the customer opportunities in the edge or the technology and infrastructure and assets that they need to be able to deliver services on the edge. So that's going to be critically important going forward."

Investment in AI

One of the outgrowths of the COVID 19 pandemic is a greater reliance on artificial intelligence (AI). Kinnaman noted how crucial AI has become to retail operations during this period. He pointed out that the companies that were able to react and maintain and even improve customer experience during the pandemic were the ones that integrated AI into their operations. Kinsman noted how AI has dramatically changed the way we buy retail goods. Consider, he said, "Now we are used to being able to order from our phone or a PC and dash over to the Target or Walmart and pick up five, ten things at the curb. The underpinnings of that are really significant data, AI, and machine learning capabilities that try to understand the small subset of inventory a retailer needs to have ready to go."

Kinnaman's advice to executives is to leverage all of the data, analytics, and insights that they have about their own organization and their competitive landscape. He pointed out that there is a lot of data out there and more tools are available to analyze it. But that data is getting harder to analyze because there's so much of it. He characterized it this way: "I think the world has never been more complex."

Kinnaman also stressed that Accenture has been making significant investments in AI to help their clients. A recent example of their growing investment in AI and data analytics companies is the acquisition of Core Compete, a U.S.-based company that enables cloud-native AI solutions for businesses focused particularly on supply chain, retail, and financial services.

An unbounded supply chain

Retailers and other providers of goods cannot make those goods available quickly if they don’t have an efficient supply chain. Kinnaman pointed out that another thing the pandemic taught businesses is the need to shorten the distance within the supply chain and have good predictive insights about what goods they really need, when they need them and where. He said that at Accenture, they call this type of predictive supply chain "supply unbounded."

Kinnaman said that shortages during the pandemic fostered some creative thinking about supply chains. He said, "Retail is a great example of looking creatively at the assets and infrastructure that you have. So rather than building significant new warehouse space or adding on or repurposing existing warehouse space, it’s important to use the data and insights you have on those products ‒ the ones you know are moving quickly‒ to tailor the supply chain."

Another important aspect of supply unbounded is a move by companies to break the physical limits of their supply chains and move production closer to where goods are needed. Examples of this are an increase by companies in the use of micro-fulfillment centers and the creation of regional supply chains. Both of these are designed make the movement of goods faster, more flexible, and more cost-effective.

The value of the cloud

Kinnaman underscored the fact that Accenture has invested many billions of dollars in the cloud, an investment that may take a few years to play out, but that will ultimately be very beneficial to their clients. According to Kinnaman, "It really helps us deliver the significant transformations that our clients are seeking, particularly digital transformations. So I think you can expect some pretty exciting things from us around that, as well as from the industry, about how cloud is really changing things."

The need for different M&A playbooks

Tech M&A deals have been increasing in volume and value over the past year. And while this has meant good times for tech buyers and sellers, it's also created some pain points. Kinnaman sees this in terms of a rethinking of playbooks, that is, the strategies companies are using in M&A deals. He put it this way, "I think where we're hearing pain points from our clients are around the suitability of their existing playbooks to deal with all this various M&A activity. Some of the strategies that we're seeing are trying to move away from a monolithic M&A playbook. We really feel that specific playbooks are needed for all the different types of strategies that are out there, all the different types of transactions that we see out there.

Kinnaman added that concerns over the regulatory landscape also play a role in M&A plans. For example, should businesses expect a more aggressive stance from the administration around any trust reviews? He offered that, "Leading firms around M&A are always going to build in a strong regulatory stream within their playbook, their planning process, and their synergy plans. But it is something that merits attention over the next several years to see how the new administration's approach is going to play out."

A personal reminiscence

Kinnaman ended the interview with a personal recollection about his younger days as a reserve police officer, a voluntary job that allowed him to do some law enforcement work (not including arrests) in his community. He recalled, "My interest in law enforcement started out when I was a kid. I was an Eagle Scout. My mom actually suggested that I should continue on in scouting and I should look at exploring. I was a police explorer when I was in high school. I grew up in Southern California and met a lot of full-time police officers and met some reserved police officers. I didn't really know what that meant, but I vowed if I had the chance, I would become a reserve officer sometime in the future.

Later, I was a reserve officer on the East Coast for a couple of years, and then for ten years in Northern California. It's a unique hobby. But it was really important to me. I really enjoyed doing it, just being able to interact with people in a different way than I do at work and help people as much as I can. You really learn some unique communication skills in law enforcement that, for me at least, have been valuable in the corporate world too." Kinnaman added, "Some people have said that's why I've survived at Accenture for so long."