Three down, one to go
Next January should see the last of the Big Four consultancies, Deloitte Consulting, finally split from its parent firm, as the others seek to consolidate their positions.
IBM has wasted no time in distancing itself and its newly-acquired consultancy from PwC, stressing that the two organisations were in no way related.
The disappearance of the PwC Consulting brand and emergence of IBM Business Consultancy marked the end of a long journey for the consultancy, which had begun two years earlier with the announcement that it was to team up with Hewlett Packard. That deal subsequently fell apart following the crash in technology stocks, but it set the seal on PwC’s desire to split from its consultancy division.
The Big Four consultancies have chosen different exit routes from their parent firms. Ernst & Young sold its consultancy to Cap Gemini, KPMG had been expected to join its US sibling which had floated on NASDAQ in the US but then went with Atos, and IBM swallowed up PwC.
Accenture, of course, famously divorced itself from Andersen Consulting long before conflicts of interest became a problem.
This has left Deloitte Consulting, which is pursuing the fiercely independent route of a management buyout. David Owen, Deloitte’s UK managing director, is confident of finalising the deal by January next year. ‘The imperative is a strong as ever,’ he said, referring to the market pressure that has forced the consultancies to split from their parents. ‘It is a fallacy to say it was a north American problem,’ he said.
Owen said the consultancy’s buyout plans had received overwhelming support at global partner meetings during the summer, and that partners in the UK, both on the accounting and consultancy sides would be voting on the separation in November.
When the deal is completed, the firm will take on a new name – Braxton.
The new firm will be financed through a mixture of partners’ capital and additional financing for operating capital – its current business model.