When most people think of Deloitte, they think of an accounting, auditing and tax practice, but consulting is now the firm's growth engine and technology is the biggest part of that.
Deloitte appears to be everywhere, involved in or contributing to many of the largest transformation projects in New Zealand.
But it is also something of a black box. Unlike major rival Accenture NZ, its financial statements are not public and it does not appear to actively seek publicity.
Mike Horne, who replaced Thomas Pippos as Deloitte NZ’s CEO in June, and Darren Wood, national leader consulting, painted a picture of the business for Reseller News last month.
First the scale: the local Deloitte partnership is a $300 million revenue business overall. Around $90 million of that comes from the consulting practice.
“We think of it more in terms of our consulting practice because tech is embedded in everything we do from a consulting perspective," Horne explained.
"Whether it be strategy, our human capital, our operations, tech is an intertwined fundamental part of our advisory business.”
Already equal with the tax and private business segment in revenue terms, consulting is also the fastest growing unit by far.
The technology business within that was the largest part of consulting, Wood said, dwarfing the traditional management consulting practice and bolstered over the years by some key acquisitions.
Asparona, an Oracle business, and Tango, an SAP specialist, were bought in late 2013 as Deloitte “doubled down” on its ERP business. Other buyouts followed, such as API Talent in 2018.
Deloitte Digital launched
In 2018, Deloitte Digital was launched to change the way the market was thinking about the opportunities offered by transformation, Wood said.
“It’s not about a Deloitte Digital team," he said. "It’s more about pulling together services end-to-end to help our clients on that digital transformation journey."
It is also about a brand that would refocus the way the market thought of Deloitte and the range of service it could offer.
Horne said a core part of tax, audit and corporate finance was data and analytics and how to present that in a digital way.
“While it’s primarily driven from our technology consulting business, Deloitte Digital actually encompasses an all of firm approach to how we use data from a customer’s perspective,” he said.
Where Deloitte had been investing in consulting and technology, some of its rivals were divesting.
Capgemini, for instance, effectively sold its local business in 2004 and exited the New Zealand market apart from a rump of software testing services.
Nearly 20 years later, Capgemini is now returning, courtesy of the acquisition of Australian Securities Exchange (ASX)-listed Empired, which owns Intergen, a locally founded business noted for its Microsoft services.
“Globally, our consulting business is the biggest part of Deloitte and Deloitte is the biggest professional services firm in the world,” Horne said.
“The reason we are the biggest firm in the world is because of the strength of our consulting business.”
All about transformation
Demand for cloud-based digital transformation services was driving a significant lift in Deloitte NZ’s business, Horne said.
“The whole COVID-19 journey has accelerated our client requirements around digital transformation so it has been incredibly positive from that side in terms of driving work streams,” he said.
“We are seeing productivity gains among clients through how they are virtualising their own businesses. That’s been very positive for us.”
The challenge wasn’t demand. It was the same one facing the rest of the tech industry – supply.
“We could actually do more if we could get more people ourselves,” Horne said.
“While we’ve got highly talented teams and are doing acquisitions, if we had an open border and could get access to more skills, there’s a lot more we could actually do.”
COVID-19, of course, prompted a rapid pivot nationwide to digital ways of working.
That was driven by necessity originally, but clients also became a lot more open to considering different modes of project delivery, Wood said.
Through Deloitte’s global delivery network, the local firm had access to a range of offshore delivery centres it could tap into in a "follow the sun" fashion, Wood said.
“That’s helped us locally being able to arbitrage between different geographies,” he said. “From a sustainability perspective we don’t want people jumping on planes unless they really need to.”
The closest centre is in the Philippines, followed by others in India, Europe and the Americas.
“We have seen the appetite for offshoring increase with the ‘war for talent’ from an IT perspective for sure," Wood said.
'Consumer grade IT'
Demand for so-called "consumer grade IT" also arrived with a thump.
The rapid rollout of applications such as Teams or Zoom, that were previously seen as too hard, lifted expectations about the kind of technology that could be delivered.
“The speed and pace of change and expectation of the pace of change has almost increased over night,” Wood said.
Read more on the next page...