The past decade has witnessed tremendous change in enterprise IT, and the transformation can be seen in stark relief at Accenture. I spoke with Accenture CIO Frank Modruson recently to discuss the challenges and benefits of application consolidation (the interview will be posted later this week), and it occurred to me that his shop offers a broad illustration of IT's evolution over the last 10 years.

Since Accenture separated from Arthur Andersen in 2001, it has replaced its network more than once, consolidated about 2,100 applications into about 500, and gone to 90 percent virtualization. As Modruson put it, over the past decade he "essentially replaced everything."

After the separation from Arthur Andersen, Accenture's leadership took a hard look at its IT capability and realized it wasn't world-class, Modruson told me. "We would have labeled ourselves average for our industry," he said. "By the time we got to '04 or '05, we could benchmark among the best in our industry." 

Early on, Modruson moved the company to an IP-based data network and to an ATM backbone for voice. Around 2004, he had started migrating to Voice-over-IP, but he did it on an opportunistic basis. For example, when an office moved to a new location, it migrated to VoIP. However, the gradual migration ended up being disruptive to users.

"It turns out if you do it opportunistically in different parts of the world, you don't get good at doing it," he said. "The biggest challenge when you do it opportunistically is that you tend to have to make the new technology work with the old technology." 

In 2005, he decided to just replace the entire network. The wholesale replacement had about a two-and-a-half- to three-year payback, he said. "After it paid for itself, it keeps paying for itself. You're still at a lower cost, so the savings go on in perpetuity."

Today, the oldest system at Accenture is the treasury system, which dates from around 1999, and it is scheduled for replacement in March. "We have no COBOL, we have no mainframes, we have no PBXs. The list goes on and on," he said. "We did a tear-down on our IT. The beauty is that we don't have to worry about spare parts or skills we can no longer get." 

Modruson's IT shop is different from a lot of enterprise IT groups in that it serves not only as a provider to internal customers but also as a proving ground and a showcase for what the company has to offer its external customers.

"We are a test bed and we are a reference. We tend to do things earlier [than other enterprises]," he said. "Fundamentally, the reason we are so successful with our own IT is that we uniformly apply our best advice to ourselves. What we've done to ourselves links back to what we tell our clients to do."

The multi-faceted utility of Accenture's IT no doubt provides some luxury to push the boundaries further than your average IT department can push them. Few IT organizations that are not part of a services company could afford to replace essentially everything over the course of a decade. Still, Modruson is clear that the dramatic consolidation, standardization and replacement have made IT cheaper, simpler and easier to run.

"The half life of technology is actually pretty short. Treasury is our last application from the 1990s," he said. "After that is replaced, we'll have nothing from the prior century."

On a separate note, business process outsourcing has changed considerably over the past decade as well. It remains a popular option for many organizations, but the drivers and the goals have evolved as it becomes clearer which tasks are well-suited to it and which are not. For some keen insights into recent and emerging BPO trends, join me and a panel of experts for a FierceCIO webinar Thursday afternoon. We'll take a look at the business processes that can be outsourced most effectively, some common pitfalls to avoid with BPO, and the elements of a smooth relationship with your outsourcer, among other things. Register today for the "Making BPO Work in Today's Business Climate" webinar. - Caron