Consultants dismiss Big Four challenge

David Thomlinson, Accenture UK managing director

Two of the heads of the UK’s largest consulting firms have poured scorn on the Big Four’s attempts to get back into the advisory marketplace, saying they lack the breadth of service of their established rivals and fail to meet the needs of clients.

The comments are set to ignite a row in the market, which some of the Big Four have only just re-entered after hiving off their arms in the aftermath of Enron.
But the concern shown by the established players may also suggest that the Big Four are already starting to get a foothold, the firms said.

Accenture UK managing director David Thomlinson and Capgemini UK consulting CEO Tom Blacksell hit out the Big Four’s efforts in rebuilding their consulting arms after divesting them at the turn of the century.

Blacksell said clients were more ‘discerning’ and that consultants needed to carry out as well as advise on work: ‘The ability to execute and advise: I see that as being a pre-requisite to being successful in the market. Those that can’t provide the organisational wherewithal to be credible in execution as well as the advice, may well pick up some work, but they’ll have limited aspirations,’ said Blacksell.

The Big Four say they only work providing advice on IT, for example, and not implementation Thomlinson said: ‘If you contrast the business they’re in compared to Accenture, we clearly have much greater breadth and depth. It’s not just based around providing advice and reports, but having the capability to deliver results.’

The Big Four hit back, suggesting that the consultancy firms were scared of their move back into the market. Alan Buckle, CEO of advisory KPMG Europe, said the consultancies’ criticisms were a sign of the Big Four’s success.

‘It’s clear that in advisory we’re seen as extremely credible, an obvious choice. But they’re right that we don’t intend to compete in IT integration and outsourcing. Some clients want us to sit alongside them opposite an IT integrator, other times they’ll choose an Accenture to do the whole thing,’ said Buckle.

Deloitte consulting MD David Owen said if the firm was failing to offer relevant services to clients then ‘we would not expect to achieve levels of growth’.
Owen also denied claims by Blacksell that Big Four consulting divisions had been built on Sarbox and IFRS work: ‘Those services are provided through audit, assurance and tax service lines.’

A bitter history

There is no love lost between the Big Four and the ‘established’ consulting players.

Much of the bad blood dates from the acrimonious split of Andersen Consulting from Andersen.

But consultants and accountants have recently waged a bitter recruitment battle following the Big Four’s move back into consulting.

Conflict of interest concerns, exacerbated by scandals in the US, saw the firms hive off their arms at the turn of the century.

Ernst & Young sold its consultancy arm to Capgemini in 2000, while PwC sold to IBM and KPMG sold to Atos in the UK during 2002.

The firms, bar Deloitte, have insisted they will not enter into large-scale IT integration, which they considered created conflicts with their old consulting arms.

PwC and Deloitte were expected to see consulting fees grow by around a fifth for 2006, while KPMG was expected to see its consulting business grow by nearly a third.

Ernst & Young was also expected to reveal its first business advisory fee income figures later this year.

Consulting in brief:

Big Four partners
Deloitte 140; KPMG 80; PwC 190; E&Y 25

Total market 2007
£7.7bn

Largest service line
IT at £1.5bn