KPMG Australia shifts from accounting to consulting

20 August 2015 Consultancy.uk

KPMG Australia is seeking to transform its image from accounting to consulting. The firm’s advisory practice now generates 49% of the firm’s revenue and its growth rate will see it become the main revenue source by next year. “Don’t call us accountants”, appears to be its new slogan. 

KPMG Australia - which consists of both a robust accounting and advisory practice – has seen its sales growth continue to outpace local GDP growth, climbing 8% to $1.21 billion.

Nearly half (49%) of KPMG’s income last year comes from its advisory practice, rather than its accounting practice. The stigma of dull and boring bean counters, often associated to accountants, has yet to be lifted from the image of the firm. To some disgruntlement from its PR management, who see the obvious flaw in this image while the firm is seeking out more advisory sales. “Those who would pigeon-hole us as an accounting firm [do so] to avoid competition, not recognising the broader threat we pose to the professional services industry because of the scope available to us,” comments Peter Nash, Chairman of KPMG Australia. “We need to move on from referring to us as an accounting firm.”

Revenue of Big Four in Australia

The firm’s growth rate, while not unimpressive, is still lagging behind that of its Big Four competitors. Deloitte’s revenue in Australia grew 15% to $1.3 billion, EY is posting an income rise of 14% to $1.29 billion, while PwC is turning revenues of $1.7 billion, up 10%.

Even with a lower result than its peers, the professional services firm is still on a path to seeing its advisory practice outgrow its accounting practice. Chief executive Gary Wingrove says that its annual results represent a “sustainable trajectory” and a “significant increase on where we were a year ago. Linking our trajectory with our investments in new innovation and alliances, we're well positioned moving into next year."

The major drivers for its strong growth came from the firm’s Technology-led projects, which added a 14% gain to KPMG’s management consulting practice. The firm’s transaction team booked a 13% increase in sales on the back of infrastructure deals, inbound foreign investment, demergers, and an active initial public listing sector. On the side of its accounting practice, audits saw a boost of 7% on the back of poaching a number of big deals from rivals, while its tax practice saw a small 2% rise.

KPMG Global Revenue

With the strong gains in its consulting practice and the lacklustre growth in accounting – and with automation from the Australian Tax Authority expected to further decrease accounting sales – the effort for KPMG to successfully rebrand as a professional services firm is more important than ever. 

Globally, KPMG's Advisory practice now earns $9.1 billion, up from $5.3 billion in 2006, accounting for a 36% share of total income.

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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.