Ernst & Young UK chairman Nick Land: A return to IT consulting?

Link: Consultancies battle Big Eight for recruits

Yet on the consulting front, it’s not only E&Y that has come under the microscope, of course. In recent months there has been a great deal of talk of the other big accountancy firms that sold off their management consulting arms also making a return to the consulting market.

PricewaterhouseCoopers and KPMG have also faced the same (admittedly more muted) accusations lately. It’s a logical time ð the non-compete deals that the firms signed at the time of the sales are drawing to a close, and in hunting growth opportunities, accountancy firms are bound to be looking at a market that is making a recovery after years in the doldrums.

With the drive in the 1990s by the US Securities and Exchange Commission to persuade accounting firms to sell off their consulting arms ð amid fears that the cross-selling of services was compromising the integrity of their audits ð it?s a sensitive subject. And given that this all happened before Enron and Worldcom, it’s a topic that has only grown more delicate.

Nevertheless, in recent months the accountants haven’t exactly helped themselves, with decidedly mixed messages coming from some of them.

E&Y was the first big firm to exit consultancy and rumours of its imminent return have been rife. The firm has repeatedly denied that this is the case, though its cause was not helped when Scottish partner Eamonn Rice appeared to contradict the firm’s line in September in an interview with The Herald.

But speaking to Management Consultancy this month, Land is keen to set the record straight. And he offers perhaps the clearest explanation yet from any of the big firms about what ‘consultancy’ work they would do and what they wouldn’t.

‘We are not going to rebuild our consulting business in the way that we traditionally had a consulting business,’ he says emphatically. ‘We are not going to go back into IT consulting, which is essentially what these businesses were. We got out of the business because consulting was becoming increasingly IT-centric ð major outsourcing, major systems development, which had less and less connection with the rest of the business.

‘What always happens in these sorts of businesses is that the service range evolves. For instance, we?ve done programme assurance for quite a long while and consulting businesses do programme assurance. So there is an overlap ð a small overlap ð in the sorts of services we provide and they provide.’

He warms to his theme. ‘For instance we do post-merger integration. We help companies when they have bought something to quickly put it together. That happens to sit in our corporate finance business. It could just as easily sit in a management consulting business.’

And Land is keen to stress that while the firm’s service offering will not stand still, he is clear about the direction in which it is going to evolve.

‘We will see our services, which are based around numbers, based around finance, evolve as they have always done. And no doubt they will sometimes evolve into bits and pieces that major consulting business have. But we are not going back into that. It doesn’t make any sense. You?ve got these big giants out there which we helped form. We would just lose our shirts if we went back into that business.

‘We are sticking with our roots in as much as these businesses are always about providing independent and objective assurance and advice, most of which is finance-centric. Not centred on the finance function, but around financial and financial risk-based assurance and advisory services.’

With such a clear statement of intent, Land’s competitors may find themselves reassured and worried in equal measure.

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