Return of the "Big Four" (Did They Ever Really Leave?) - META Group

The 1990s were glory years for the "Big 8/6/5" consultancies, firms that rapidly expanded from their audit roots to build out business advisory and IT services capabilities and drove megatrends like BPR, ERP implementation, and e-business. The bust that followed the boom, and questions about conflicts of interest from selling non-audit services to audit accounts (and subsequent regulations to curtail that practice), led to the splitting out of many of the IT-intensive services (KPMG spun out KPMG Consulting, now BearingPoint; E&Y sold its practice to Capgemini, and PwC to IBM; and Andersen's staff scattered after its demise). Deloitte did not spin out its IT practice, though it tried, and now looks quite smart for having maintained those capabilities. Indeed, Deloitte's integrated service offering business (fusing IT with risk, tax, and financial domain expertise) is booming. PwC is building up its IT practice - one that never totally disappeared - E&Y has announced its intent to do the same, and KPMG's Risk Advisory Service that includes all non-tax/audit/financial services including IT is rapidly growing. What has changed is that, with the exception of Deloitte, these firms are not targeting enterprise packaged application deployment or development. Rather, the emphasis is on embedding IT advisory capabilities within other practice areas, particularly around risk and compliance, to create new hybrid offerings. While this may not prove as lucrative as work performed in the glory years, it does create compelling (anything to make compliance more viable and less costly is compelling) and differentiating service offerings that will likely prove less conflicting. (Stan Lepeak)