Accenture’s Industry X.0 Acquisition Spree Continues with PLM Systems, Callisto Integration, and Silveo

Accenture is on an Industry 4.0 buying spree to expand critical skills and capabilities in the fast-growing digital manufacturing market. In 2019, it acquired consulting and manufacturing services providers Enterprise System Partners (ESP) and Silveo, product innovation and engineering company Nytec, and U.K. innovation firm Happen. At the start of 2020, it picked up product design and innovation agency VanBerlo and software developer ESR Labs. Callisto Integration and PLM Systems, both acquired in May 2020, are the most recent adds to the roster, but they will be far from the last.

This ABI Insight highlights Accenture’s most recent and relevant acquisitions to the company’s overall growth strategy for Industry 4.0 and in so doing underscores the key channels through which new technology adoption occurs in manufacturing.

Accenture doesn’t want to be caught flat-footed and its buy and build strategy is clear via the string of recent acquisitions (starting with the most recent):

• PLM Systems: An Italian digital engineering services firm pursued to accelerate Accenture’s leadership in engineering digitization services.
• Callisto Integration: A Canadian-based Systems Integrator (SI) that specializes in Manufacturing Execution Systems (MES) and shop-floor-level control systems. Its 160 employees will join the Industry X.0 practice.
• ESR Labs: A Munich-based embedded software developer whose 130 software engineers will join Industry X.0 to improve its software offerings in automotive and manufacturing.
• VanBerlo: A Netherlands-based product design and innovation agency focused on merging physical products and digital services. The aim is to strengthen Accenture’s ability to help clients build smart connected solutions.
• Icon Integration: An Australian technology consultancy that provides SAP digital supply chain solutions to clients in Australia and New Zealand. It has a team of 70 with strengths in data optimization and warehouse management that improve Accenture’s SAP boots on the grounds.
• Silveo: A French consulting company that provides services and solutions for digital manufacturing and intelligent supply chains based on software from SAP and Dassault Systèmes. It has a team of 50 joining Industry X.O to support and accelerate implementations.

Together these acquisitions evidence the trend to bring more resources under one roof in support of digital transformation, as-a-service business models, and hyper personalization.

New technology makes its way to manufacturing in one of three ways: via internal Research and Development (R&D), through a technology solutions provider, or through an SI.

Plant managers are key decision makers, but they often leverage channel partners. These are manufacturing professionals with budget and considerable responsibility but with a more local purview. Therefore, they are more likely to work with someone they know and closer to the scene. The issue is that these decisions can result in point solutions that are not standardized across the company.

Both managers and senior-level executives must take a systems approach. For example, you cannot compare one factory to another if they use different systems and different metrics. Today this is important because plant managers and factories operate like fiefdoms; each facility has its own Profit and Loss (P&L) and set of metrics. In the future, however, the significance of a standard operating model and standard solution or vendor is to not only compare performance but also optimize it. The other benefit of working with a global SI like Accenture is a single point of contact—or a single throat to choke when something goes awry.

Global SIs like Accenture, McKinsey, and PwC work with business leaders within the organization to drive standardization. They are also, as we see with Accenture, aggressive in making sure they have all the right tools in their toolshed, rather than risk disintermediation. These companies have long been a partner to many and will continue to be for some time, but the lines are starting to blur with the continued acquisition of new in-house capabilities. In the case of a traditional Industrial Internet of Things (IioT) Independent Software Vendors (ISV)/SI relationship, the SI might get 20% margin on software and they can charge additionally for services. Sometimes, higher volumes are more of a revenue share model, with more of a 50/50 split. The reason SIs want to bring these capabilities and this revenue in house is because the software delivery model in many instances circumvents their reliance; the reason technology solutions providers want to align with SIs (for the time being) is because they own the customer relationship. This is the balance of power that will continue to play out with the accelerated shift to digital manufacturing.