BearingPoint outpaces consulting market with 12% growth to €710 million

05 April 2018 Consultancy.uk

Global consulting firm BearingPoint enjoyed a bumper year in 2017, with revenues up by 12% compared to the previous year to a record level of €710 million, and profitability up by 18% year over year.

Data released by BearingPoint, one of the largest European-origin consultancies that traces its roots back to KPMG Consulting, shows that the firm has outpaced the consulting industry for the second consecutive year. Following 10% growth in 2016, last year the management and technology consultancy added 12% to its total fee income – a much faster growth rate than the 7% forecasted by Gartner for the global consulting industry in 2017.

“We certainly had a good market environment in 2017, but BearingPoint’s performance was particularly strong. It was the continued execution of the firm’s long-term strategy to combine business consulting, technology and IP-based assets that again paid off, and I am proud of what we achieved as a team,” said BearingPoint's Managing Partner Peter Mockler, who has been at the helm since the firm’s buyout in 2009. 

€1 billion target by 2020

Launched in 2015, BearingPoint’s five-year strategy has set the ambitious goal of achieving a revenue of €1 billion by 2020. “We are well on the way of reaching our one billion euros revenues goal,” said Mockler. As part of the strategic plan, the consultancy set goals to significantly expand its footprint in technology consulting and solutions. To keep the firm heading in an innovative and forward-looking direction, BearingPoint also increased its focus on venturing, as a means of investing in high-potential startups to book returns for its privately-held partnership, but more so as a vehicle of gaining access to add-on clients offerings. 

“The pillars are synergetic, each works together to drive innovation, sustainable revenue, and client value,” explained Mockler.

BearingPoint outpaces consulting market with 12% revenue growth to €710 million

In 2017, BearingPoint saw growth across all industry segments, spanning Automotive, Financial Services and Consumer Goods & Retail to Public Sector, Telecommunications and Energy & Utilities, among others. The same was true for service lines and regions, with the firm’s core territory, EMEA, performing similar to the previous year forming the stronghold. The firm has offices in 19 European countries, while offices in Casablanca and Dubai serve the Africa and Middle East markets. Outside EMEA, BearingPoint has offices in Asia, and to cover other markets, it works with strategic partners: West Monroe Partners in North America, Grupo ASSA in South America and ABeam Consulting in Asia.

In consulting, BearingPoint’s growth was lifted by the acquisition of LCP Consulting, a UK-based supply-chain specialist, and the addition of an automotive consulting team in Italy. The firm’s ventures arm invested in, among others, the Norwegian insure-tech start-up Tribe, while several of the firm’s investments in new technologies were rapidly and successfully brought to the market, which led to €56 million in new bookings in 2017. To provide the Solutions wing with more room for entrepreneurship and organic expansion, several refinements have been made to its governance and financials, including the introduction of a standalone P&L responsibility. 

Underpinning the growth was an 11% increase in headcount, which equates to an uptake of around 400 professionals, taking the overall team size to over 4,000 consultants and staff. Mockler: “Our workforce grew double-digit, and there is a good reason for our success in attracting talent. We understand that it’s all about the ecosystem of work: the company culture, the way you experience leadership, the quality of the projects you are working on, and the environment you are working in.”

Among the new hires were 19 new Partners, of which 16 were promoted internally and 3 joined from the market. “Partners are at the heart of our independent partnership. They make sure that we keep client focus as our first priority at all times and that we adhere to one the main core principles of our partnership: stewardship. This embodies our determination to develop our people and our capabilities in order to build a stronger, healthier, and wiser organisation for the benefit of future generations of employees,” concluded BearingPoint’s chief executive. 

Related: BearingPoint CEO Peter Mockler on the firm’s strategy and plans.

×

Accenture's push into the creative sector is an identity crisis

18 April 2019 Consultancy.uk

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.