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Our management consultancy columnist, Mick James, this week talks to Alan Downey, chief operating officer for KPMG Risk Advisory Services, about the firm's return to consultancy.
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KPMG is back in the game
The return of the Big Four consultancy firms has opened up a new fault line in the market pace 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 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 in the description of organizational 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 1400 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," 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 and there's an opportunity to engage with the business at a higher level."
After the experience of the late1990s, 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 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" 1990's 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 recognize 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. "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 recognized 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," says Downey. "We're going to concentrate on being good at what we do and not worry too much about what we are called."
Related Link
See the latest consulting opportunities at KPMG.
All views expressed in this article are those of Mick James and do not necessarily reflect the views of Top-Consultant.com and Consultant-News.com.
Contact Mick with your views or suggestions at: [email protected].
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