James Henderson
by James Henderson

Inside the Accenture acquisition of PrimeQ

News
12 Dec 20185 mins
Software Development

Acquisition aims to create a "powerhouse" within Oracle Cloud market

Of the dozen of so media articles already circulating within the industry, the stock-standard headline reads, 'global technology giant acquires fledgling technology start-up.'

True, in a sense, but the $31 million acquisition of PrimeQ by Accenture aims to go much deeper than a conventional coming together of companies.

The joining of a global system integrator with a specialist provider stands to create a "powerhouse" in Australia and New Zealand (A/NZ), built around the expanding Oracle Cloud market.

"It's a tick for the customers, a tick for the employees and a tick for the shareholders," said Andrew McAdams, CEO of PrimeQ, when speaking to ARN from the company's headquarters in Adelaide.

Any prospect of an acquisition was initially raised seven months ago, during an executive meeting in May, when both parties sized up the respective organisations.

Coupled with a joint-deployment for the Inland Revenue Department in New Zealand, and the foundations were laid for an acquisition process, first revealed by ARN on 13 November.

"We've had a large Oracle practice in A/NZ, and globally, for some time and we've been working closely with customers around on-premises deployments," added James Madigan, leader of the Oracle business across A/NZ at Accenture.

"But as Oracle moves to cloud technologies very quickly, we at Accenture are also moving in that direction as well.

"We've been searching for organic and inorganic ways to grow. We continue to grow organically through certifications and training but in terms of picking up the pace and building out our practice rapidly, we're explored inorganic growth and acquisitions.

"We've been scanning the market for a while and quite quickly, PrimeQ came to the front of potential targets. We quickly and mutually agreed that this represented a very good acquisition for Accenture and a very good landing point for PrimeQ."

Through the acquisition, Accenture now operates as the largest Oracle Cloud system integrator in the region, leveraging software-as-a-service (SaaS) expertise around transportation management, warehouse management and CRM.

The local addition complements a global practice housing more than 54,000 Oracle-skilled consultants, building on an alliance spanning more than 25 years.

"PrimeQ adds value to the supply chain side of the equation through having the right people in the business to service the opportunities we have," Madigan explained. "We will immediately look at bringing PrimeQ talent into existing Accenture projects and vice versa."

Customers

According to Madigan, PrimeQ provides Accenture with "lots of synergies" locally, with the integrator also providing expertise in the opposite direction, through skills such as Oracle Human Capital Management capabilities.

"We have skills in program, project and change management which is important in cloud transformations," Madigan added.

"We also have the broader portfolio of Accenture offerings such as security, design thinking and digital marketing. We have a broad spectrum of solutions to bring to the PrimeQ customer base."

The PrimeQ customer base spans multiple industries, such as government, health and public services, alongside retail, consumer goods and financial services on both sides of the Tasman.

idg-owned

Key recent wins include Queensland Investment Corporation, the Environmental Protection Authority in New Zealand and Lionel Samson Sadleirs Group.

“Our customers like the extra stability that this acquisition provides, particularly in more of the larger Government customers,” McAdams said.

"We partnered with Accenture on the Inland Revenue Department in New Zealand to test that we could all work together. That was a really important checkpoint for us and an important customer for our New Zealand business."

McAdams said some customers have already transferred PrimeQ contracts over to Accenture, with the remaining currently in the process of doing the same.

"There's been no concern," McAdams stressed. "As long as we make sure our customers have access to the same consulting and project management and all that we're doing is enhancing our offerings, then we have no problem."

Employees

A key priority within the first six months centres around ensuring a smooth integration process, in a bid to transition both PrimeQ employees and customers into the wider Accenture business.

"This will be a gradual integration process," Madigan said. "We're not just slamming the two organisations together overnight and hoping for the best.

"This is going to be a very well-planned and well-managed integration over many months. We want to shield and look after the PrimeQ people as they move into Accenture."

To achieve this, Madigan said Accenture will retain all of the existing PrimeQ offices – spanning Adelaide, Sydney, Melbourne, Auckland and Wellington – in the "medium-term".

"I can confidently say that in all of the due diligence, more than 50 per cent was focused on the people and the team as much as the transaction," Madigan added.

"The next six months will be measured on the smoothness of the integration and the retention of PrimeQ staff and customers. That will be our measure of success."

According to McAdams, all PrimeQ founders will be staying with the business going forward as part of a management commitment to drive success.

"My role as CEO was to ensure that the organisation landed in the right spot," McAdams said. "Accenture brought so many different elements to our business that were complementary, particularly around transformation because we were struggling in that space."

James Henderson
by James Henderson
Editorial Director, Asia-Pacific and Middle East

James Henderson is Editorial Director, Asia-Pacific and Middle East, with a responsibility for developing the content, audience, and partnership strategy for IDG’s channel and enterprise brands across ASEAN, Australia, India, the Middle East, and New Zealand. In his writing work, James specialises in converting global technology trends into local insights, with a specific focus on ASEAN markets.

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