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 workstreams,” 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 didn’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, which 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 overnight,” Wood said.
Similar expectations grew among users around the opportunities to transform customer channels and interfaces.
Anything cloud is hot, Wood said, including Salesforce, ServiceNow, HR, ERP in the cloud, Success Factors and hyper-scale datacentre migration.
Demand was not driven by particular sectors either. Fears the private sector might slash investment, for instance, proved incorrect.
“We thought and feared there might be some apprehension to invest in the private sector directly post COVID, but those fears proved to be unfounded,” Wood said.
“All the projects that we had that went on pause had their business cases looked at and were restarted.”
Huge regulatory changes in health, water and infrastructure, among other areas, are also driving demand.
While that was good business for Deloitte, being involved also allowed the firm to bring its capability to the table "as proud New Zealanders" and help with how regulatory change was rolled out, Horne said.
One new initiative is Deloitte’s rapid cloud prototyping service, Digital Forge, a sub-brand released post COVID-19 in response to clients asking the firm to “show rather than tell”.
Different commercial models are offered for small investments in up-front prototyping.
Digital Forge features “deep tech”, human-centred design, cloud alliances, very modern architecture, whiteboarding supporting rapid two or three-week build engagements.
Digital Forge challenges the model of monolithic design before funding is released by giving executives an opportunity to see tangible solutions and choose which they want to invest in, Wood said.
Alliances and partnerships
Deloitte' global alliances, naturally, are managed globally, but Deloitte NZ has the autonomy to select which make sense for the local business.
As well as consulting on and implementing these, Deloitte is a reseller of software, often bundled up with Deloitte IP and sold as a Deloitte asset on an as a service model, Wood explained.
Sometimes the reseller is an intermediary with Deloitte delivering services such as design, configuration, testing and business adoption around that.
At the top end of town, Deloitte will also act more as a traditional systems integrator or business integrator with the software vendor selling licenses direct because they own those accounts.
Horne’s priorities as the firm’s new leader are around continuing to create opportunities for Deloitte’s people.
“A lot of my focus is how we can take that talent and provide them with the opportunities to actually grow,” he said.
“If our people can grow, we can grow their capability, grow how they interface with clients, and ultimately that is better for the client and better for our people."
Traditionally Deloitte relied on graduate intakes of around 120 new staff each February, but it is finding it harder to get the right kind of junior talent into the business, Wood said.
NZ is not producing the level of STEM graduates and the type of people that can take the economy and society forward, he claimed.
“Part of our role is to provide opportunities to upskill to a greater swathe of NZ society,” Horne said.
In that cause and to help plug skills shortages, Deloitte NZ is investing in cadetship programmes in partnership with Salesforce and AWS.
“That’s something we are doing differently this year,” Wood said. “We are quite excited about it and other Deloitte firms looking at what we are doing.”
Deloitte is also working to create more opportunities women in tech and to enhance access for Maori, Pacifica and Asian communities.
Other areas of activity are around addressing issues of climate change and sustainability. Embedding a sense of purpose into the business was another priority, Horne said.
“That makes a huge difference to us, to our people, our clients and the communities we work with.”
Challengers
So, who is challenging now? Who is pushing Deloitte?
“All the big four are focused on expanding their consulting businesses certainly from the technology side,” Horne said.
The big mover outside of that was probably Accenture, which also has access to global assets.
One big difference between the two is that Deloitte is a partnership with 143 local partners out of around 1500 staff.
“It does give you quite a different outlook in terms of how you operate, how you support each other but also how you are deeply embedded and invested in New Zealand,” Horne said.
“I think it’s quite a different outlook.”
Sourced from Reseller News - Written by Rob O’Neill