| | By Mick James
The return of the Big
Four consultancy firms
has opened up a new
fault line in the
marketplace with the
notion of the "client
side advisory" firm, as
distinct from the
end-to-end supplier with
fingers in the pies of
outsourcing and systems
integration. It's a
branding scuffle that
often threatens to
become bitter: are the
big consultancies just
sales engines for
outsourcing and
integration, or do the
accountants lack the
resources to follow
through on their advice?
"The implication of
the phrase 'independent
client side advice' is
that firms such as
Capgemini and Accenture
are biased, and we'd be
happy to argue that if
it were true," says Alan
Downey, chief operating
officer for KPMG Risk
Advisory Services. "If
the big firms are smart
– and they are smart –
they will continue to
operate across the whole
of the value chain. But
we also believe there's
a profitable and good
scale business in
offering advice, not
just writing reports but
helping with the
difficult process of
implementation."
It's a typically
measured response from
KPMG, which has been
quietly rebuilding its
consultancy offering –
although not under that | |
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| | banner – for over a year
now.
"One thing we haven't
done on a significant
scale is branding or
have a PR campaign and
I'm not sure we will do
one," says Downey. "I
use the word consultancy
in conversation but we
don't use it in the
description of
organisational units and
we don't advertise
ourselves as offering
consultancy services."
When KPMG sold off
its consultancy units in
2002, there was very
little advisory
capability left behind.
"We didn't really start
to build the business up
in such a major way
until we came to the end
of the non-compete
agreement in March
2006," says Downey. "Now
we've got close to 1,400
people, 55% of whom have
been with KPMG less than
two years."
The challenge for
KPMG is, therefore, to
marry what is a
relatively new business
with the heritage and
traditional strengths of
the firm.
"Sometimes when we're
recruiting, you have to
ask people why they want
to move when they work
for a firm with just as
good a reputation as
KPMG’s," says Downey.
"We believe we can offer
people the kind of
consultancy work which
feels like it's not at
the core of the big
consultancy firms. It's
slightly more strategic | |
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| | and there's an
opportunity to engage
with the business at a
higher level."
After the experience
of the late 1990s, when
KPMG's consultancy unit
increasingly followed
its own path, the firm
is now taking the
opposite tack:
"The lesson we
learned is that
consultancy has to be
closely integrated with
the rest of the
business, so we no
longer have a separate
consultancy arm," says
Downey. "The second
thing is that we have to
stay close to our brand.
We're not going to
implement VoIP in
telecoms, but we can
help you run your
finance function more
efficiently."
Despite the
restrictions that
accountancy firms now
face on the services
they can offer to
clients, Downey says
this still leaves a huge
amount of the market
that the firm can
attack, even if large,
SEC-registered firms are
off limits.
"Some of our leads
come from within KPMG,
but most come from
relationship building –
someone has to make the
cold call," he says.
"There's hardly anyone
in a senior position in
a UK company who won't
know someone in KPMG."
As one might expect,
these relationships tend
to be concentrated in | |
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| | finance, but the firms
is very keen to expand
its advisory role into
other departments, such
as HR, where the
opportunities to
influence performance
are greatest.
"It's not about
expanding what we do
into every available
space," says Downey. "We
want to restrict it to
the things we want to be
famous for."
Although the firm has
set ambitious growth
targets, Downey says
that there will be no
return to "bonkers"
1990s' style expansion.
"A lot of people like
myself were heavily
implicated in over-rapid
growth on the back of
optimism and then
experiencing a painful
downturn," he says. "If
you've been recruiting
hell for leather and
then have to run
redundancy programmes,
it's not something you
forget easily."
So what would a
time-traveller from
those far-off days
recognise or find
different about the
"new" KPMG?
Downey asserts –
correctly in my view –
that KPMG has always
been a friendly and
accommodating firm, but
that now there is more
of an emphasis on things
like community
involvement.
"We've never been a
ruthless, hire and fire
firm where profit is all
that matters," he says. | |
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| | "We want to strike a
balance between the
individual, the
community and the hard
financial interests of
the business."
This balance comes
across in things like
KPMG's drive to be
recognised as the best
employer of the Big
Four, and a more
conscious emphasis on
promoting diversity in
the firm.
"We've cottoned on to
the fact that there is
this huge well of talent
which we miss out on,"
he says. "People who are
just as good as the
traditional workforce
but for whatever reason
didn’t have the same
opportunities."
In many ways, says
Downey, KPMG's "new"
consultancy, although
not identified as such,
is now more comfortably
positioned within the
firm than before.
"We want to deliver
that bit of the market
that plays to our broad
strengths and it's a
great advantage to have
a strategy which makes
sense with what we've
done in the past," he
says. "We're going to
concentrate on being
good at what we do and
not worry too much about
what we are called."
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