Q&A: Avanade on why Microsoft is your best strategic partner for the future

Avanade CEO Adam Warby details how a $2 billion IT services company is capitalizing on new Microsoft cloud and collaboration capabilities to power digital transformation projects.

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Credit: Avanade CEO Adam Warby

In March 2000, Avanade was created as a joint venture of Microsoft and Accenture to help companies build the client-server architectures that have powered IT for years. While the Seattle-based company still handles bread-and-butter infrastructure integration, today it is squarely focused on helping clients move to the cloud and engineer their digital transformation initiatives.

In this installment of the IDG CEO Interview Series, Avanade CEO Adam Warby -- along with North America President Mick Slattery -- spoke with Chief Content Officer John Gallant about the keys to digital transformation and how Avanade and customers are benefitting from Microsoft’s own remarkable transitions -- or, why Microsoft is the most important strategic partner for CIOs for the future. Warby discussed the changing role of the CIO and talked about the growing role of line-of-business executives in driving innovation.

[ Related: Tech Titans Talk: The IDG Enterprise Interview Series ]

CIO.com: I want to start off with a little bit of history for readers who may not know Avanade. Tell me why the company was formed. What was the rationale behind the joint venture and what did you set out to do?

adamwarby4 Avanade CEO Adam Warby

Adam Warby: It’s fun to look back because it was created right in the heart of the dotcom boom in the year 2000 and at a time when both Microsoft and Anderson Consulting were looking at what their respective opportunities were in the market. The fundamental reason [we were formed] was that Microsoft saw, and was pursuing, the opportunity to be a full-scale enterprise player.

We’re talking back in the age of Windows NT. Then, what partners could help Microsoft get there? Accenture had always done a good job of looking at the technology ecosystem -- fairly recently before that they had done a very productive agreement with Siebel that people might remember -- and I think they recognized that Microsoft was at the beginning of what was going to be significant growth in the enterprise.

Two enlightened people -- Joe Forehand on the Accenture side and John Connors on the Microsoft side -- had the idea that we could create something with more permanent value than just an alliance and had the idea of creating the joint venture that Avanade became.

CIO.com: What were you setting out to solve for customers?

Warby: At that time there were two problem sets. One was how do we take this distributed PC environment and scale it up in a secure and reliable way in the enterprise. Interestingly, 15 years on, I think the cloud really delivers that dividend and Microsoft is doing a super job of delivering on that. It’s been a journey. But that was what people were looking for. They could see the flexibility and the cost effectiveness of having this distributed PC environment but how could you do that in an enterprise class way?

Then, referring to the dotcom environment, people were building applications to take advantage of the new online world. We were at a time then where Wi-Fi networks were only just really broadly available and mobility was a twinkling in our eye. The idea that you could write and get access to information in a more usable, intuitive, flexible way was really the beginning of that part of the journey.

Those two things and two fundamental technologies. My last job at Microsoft was launching Windows 2000 and Microsoft.NET which was just the foundation of that ability to do Web-capable and scalable enterprise applications in a distributed way.

CIO.com: How has the company evolved since then? How is the mission and the goal today different than it was back then?

Warby: It’s been a fascinating journey. We were a self-described technology integrator. That was the heart of what we did and that passion for technology still burns bright. At the heart of what we’ve done is create a culture that is blending the best of both of our founding parents: the passion and focus on technology from Microsoft and the focus on the client and delivery and outcomes and business benefits from the Accenture side. As we progressed through that journey we’ve gone from technology to solutions and then from solutions to business value.

That’s where you see us now. In this digital world we’ve just recreated our vision for the third time in our history to be the leading digital innovator. That’s the first part of our vision. There’s a bunch more around how we do that but innovation in the digital world is where we are now. That is a different place to be than being just a technology integrator because technology is not the problem now. The challenge is how you use it to innovate and innovate at our clients. That’s a big shift.

[ Related: How CIOs will refine digital transformation in 2016 ]

CIO.com: Let’s talk about that because that’s one of the phrases that we hear a lot, digital transformation. What does that actually mean when you engage with a customer? How does the engagement start and where do you take it?

Warby: Most customers are talking about transforming something. Is it customer experience? Is it the employee experience? Is it their operations? There has to be a focus around the digital conversation because it is a broad term and it can mean a lot of things to people.

Often, it starts with an innovation conversation. A well-told story on our part was the work we did with Delta Airlines. It’s a particularly interesting case study because it started with an innovation discussion around how we could use Windows 8, at the time, to improve the cabin experience for flight attendants. They liked what they saw when we did the pilot. They said: ‘What else could this do?’ To fast-forward the story, it turned out to be something that really changed the way they worked as flight attendants. Suddenly they’re connected to the back-end system through Wi-Fi. It means you could reduce credit card fraud. You could introduce new ways of doing business. One idea that they were experimenting with was seat upgrades on the plane. There’s a space there in Economy Plus, could I have that seat? Well, yeah, $50.

It’s helped them transform what was a loss-making business into a profit-making business and the client experience is better. There it was about cabin experience so the customer gets a better experience. The buyer was head of care and services, not the IT department so that’s a huge change for us as a business and it’s been a fun journey.

Mick Slattery: Maybe I’ll take a slightly different direction. We’re doing a fair amount of work right now around Office 365. You can address that as a technology problem or you

mick slattery headshot 2 no glasses Avanade North America President Mick Slattery

can address that more holistically and say: Let’s talk about the nature of what work should look like. How can you enrich the employee experience and employee productivity and keep your employees engaged? That’s a big topic of conversation that we’re having as well.

A lot of times it will start with what we call an iDay where we help clients envision the art of the possible. We’ve had a number of great conversations. A couple that come to mind are with some of the life sciences companies that have joined us in our New York Innovation Center. We’ll start with the art of the possible. It’s not just about how do I deploy a particular service, but how do I transform an employee experience? This is the type of conversation we love engaging in with our clients.

CIO.com: What are the major solutions you bring to bear for customers today?

Warby: There are four things that we do for our clients. I start with our core business -- historical business if you want to think of it but still extremely important -- which is raw technology services. Just make this technology work and perform, reduce cost, increase performance, whether it’s application or infrastructure. That still remains very important and, of course, with the amount of change that’s going on in technology, there’s lots to do there still.

The easiest bridge from there, if you like, is cloud and we have a market unit focused exclusively on cloud. Of course you can look at cloud in two different ways. One is it enables the digital business but it also brings a set of agility, cost benefits and all of that. That’s where the work that we might do with Office 365 would come out.

[Related: 5 cloud computing predictions for 2016 ]

CIO.com: Just to be clear, when you talk about cloud are you reselling Microsoft cloud services or are there additional cloud capabilities you bring to bear?

Warby: We don’t necessarily just see it as Microsoft reselling. Of course we do that but it’s the broader ecosystem of things around that. We work with other providers that will help make the cloud work and we add value to it in different ways. It’s more about the outcome for the cloud project than it is just the technology.

CIO.com: So, in essence, helping somebody to shape an entire cloud strategy, not just the Microsoft piece.

Slattery: We have some service offerings we provide that are more what I call private cloud services. So, how can organizations consume those as well as [make them a] part of an overall portfolio? But, really, it all starts with what’s the right answer for the client.

An example I’m thinking of is our UCCMS service [Unified Communications and Collaboration Managed Services]. Office 365 is where we start but there are some clients who, for a variety of reasons or a particular set of users, have different needs. So we’ll figure out how we blend and take full advantage of the public cloud capabilities, add in some additional private cloud capabilities for specific business services and put that together as an end-to-end solution for a client.

CIO.com: So that’s essentially a managed private cloud.

Slattery: Public and private, so more of a hybrid environment.

Warby: An example is Freeport-McMoRan. We developed a hybrid cloud solution for them that started off as a combination of performance and operation improvement but then got extended to a digital mining solution to help them track and manage their vehicles -- these massive mining vehicles lying in the mines. That’s a good example of the two sides of the cloud journey. One is operational improvement and the other is enabling digital business.

CIO.com: That’s two of the four things you do for customers.

Warby: Yes. Digital is the next and we break that down into these different journeys that we talked about, whether it’s the digital customer, digital employee, digital operations and indeed, digital culture as we call it, which is the broad change that you get by a lot of these things coming together. One of the key points is that the buyer of those projects is the business buyer, the head of HR, customer service, operations, sales, marketing.

Maybe another good example in that case is the work that we’ve done with one of Microsoft’s partners called Sitecore, who is a very successful vendor of digital content management and the set of services around that to help you build websites and run websites effectively. We have built out a solution sitting on the cloud, sitting on Microsoft Azure, that we can put into different environments -- actually for one international chip manufacturer -- charging them by the page view, not as a project. That’s true as-a-service flex-up, flex-down economics.

There’s a very exciting set of work that goes on around those digital journeys. We talked about both sides of this, the employee experience, the customer experience. When those two come together magic happens. Microsoft is in a unique position to help the coming together of those two experiences and the overlap. For every good customer experience there should be a good employee experience. If you can get that to light up then really good things happen.

CIO.com: The fourth area is?

Warby: Business applications. That’s really thinking about the core transformation of those. Those can be digital projects as well in the sense that people try to think through how their core processes work differently. That’s working in a Microsoft context, particularly with the Dynamics Suite. Again, that’s a unique combination Microsoft has with a cloud-based offering for both ERP and CRM. You can rethink the way business gets done.

I can’t name the particular client but we’re working with a global electronics retailer based in Europe that is completely re-envisioning their customer journey. Like many retailers they’re thinking about why we’ve got a store, what is it that draws a customer into that store? How do they have a good experience? We know they checked out prices on the Web and done the comparative site shopping but they still want to touch and feel products. These are large electronic goods. We’ve been working with them on a green field reinvention of this store outward, the so-called Omni-channel experience. Can I do click and collect? Can I order something online and collect it in the store? That’s that model. That is entirely powered by the Microsoft platform, customer experience driven by Dynamics CRM, the logistics and back-end processes driven by the ERP suites and then the marketing bit with Sitecore. It’s very rich when you put that together in how flexible that is. It’s a pretty rich set of tools.

CIO.com: When you look across these four areas, where are you seeing your fastest growth?

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