Presence of IT joins Deloitte as consulting giants step up channel play

Presence of IT joins Deloitte as consulting giants step up channel play

It remains to be seen just what kind of broad impact such consolidation will have on the local channel

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Presence of IT’s 600-plus workers around the world joined Deloitte’s consulting practice in Australia, New Zealand, Singapore and other regions today, following the largest consulting transaction the firm has completed in the local market.

Deloitte Australia revealed it had acquired Australian workforce management and human resources consultancy firm Presence of IT in late October, with plans to take on the company's founders, executive leadership team and employees.

The locally-headquartered company is an SAP, Oracle, and Kronos partner, supplying SAP HR/payroll consulting services and Oracle human capital management (HCM) solutions, among other offerings, to customers in multiple regions. 

At the time, Deloitte Australia claimed that the deal to acquire Presence of IT is the largest consulting transaction it has ever completed in the local market. 

Now, as of 9 December 2019, some 600 members of Present of IT’s global workforce are now officially in the employ of Deloitte. 

Roughly 300 people from Presence of IT have joined Deloitte’s Australian Consulting practice and a further 300 have joined other Deloitte offices across Asia Pacific and the United States.

The specific regions include Australia, China, India, Japan, New Zealand, Singapore, South Korea, Taiwan, Thailand and the United States.

The acquisition and consolidation is just the latest in a long line of such moves by Deloitte, which, as of March this year, had snapped up no fewer than 19 technology specialists across Australia and New Zealand in the space of five years. 

Last year, the consulting firm acquired Mexia, CloudTrek and ATADATA, which came into the fold across Australia, while API Talent and CloudinIT joined the business in New Zealand.

In 2017, CBIG Consulting; Well Placed Cactus; JKVine; Nesoi and Strut Digital were purchased, following Plenary Networks; Kid Neon; The Explainers; Sixtree and Cinder Agency 12 months earlier.

As Deloitte continues to notch up purchases from within the local IT services landscape, the firm’s strategy to build out its technology capabilities in the region is clear, and acquisition plays a big part in the company’s growth plans.

However, Deloitte is not alone in its strategy of tapping into the local channel for the skills and capabilities needed to build out its end-to-end consulting and IT services offerings in the market. 

In early December, Accenture moved to boost its public sector play with the acquisition of local government specialist consultancy firm Apis Group which, since 1999, had made a name for itself working with some of Australia’s largest federal public service organisations, providing strategic advisory services, project management, business and digital design services. 

In August, Accenture acquired Melbourne-based big data and analytics consultancy Analytics8. That acquisition followed on from Accenture’s purchase of cyber security company, BCT Solutions and its acquisition of Oracle partner, PrimeQ in December last year.

As reported by ARN in December last year, Accenture snapped up seven specialist technology and digital providers within the space of just 12 days.

Ernst & Young (EY) in January acquired specialist SAP consulting and technical services provider Plaut IT, along with its local subsidiary EchoJunction and Malaysian subsidiary, Baseliner.

As a result of that acquisition, it was announced at the time, the Plaut IT business in Australia and Malaysia would be branded EY, and Plaut IT chairman David Prior would join EY’s technology services in Sydney.

The Plaut IT acquisition, which added 130 people to EY's technology services, marked the global advisory firm's third "digital" acquisition in the space of seven months, which includes the acquisition of Adelphi Digital Consulting Group in November.

KPMG Australia, meanwhile, made headlines in May for its acquisition of user experience (UX), web and mobile app technology firm Love Agency, which had built a reputation for building solutions for enterprises and government clients.

Such acquisition announcements almost always come with enthusiastic comments from the owners, directors and managers of the organisations being acquired, many of whom point to the deep resources they can now leverage. 

Certainly, for smaller and mid-sized players, the additional backing by the likes of EY, Deloitte, KPMG and Accenture can represent a boon across several different fronts.

However, it remains to be seen just what kind of broad impact the industry consolidation driven by such acquisitions may have on the local channel landscape and whether competition in the sector will be affected.

As reported by Reseller News in 2018, the big consulting firms are casting a very long shadow across the technology industry, advancing at pace into the world of the channel.

Such a shift in behaviour and focus is shaking the channel to its very core, impacting an ecosystem of partners that have until recent years, existed in parallel to their suited and booted counterparts within professional services.

“The advisory and consulting space is perceived as being able to access and leverage a broad range of best practices, engagements, market trends and skilled practitioners to drive better decision making and outcomes,” said Jens Butler, services and sourcing advisory director at Tech Research Asia.

“This comes with a focus on problem solving, solution analysis, design and recommendations, which then expanded into the full services implementation and integration arenas.

“Much of this evolution was based on their experience and ability to leverage knowledge of customer requirements, and the creation of frameworks, architectures and program offices to deliver those large programs.”

One this is certain, this kind of activity by the big consulting firms is unlikely to end anytime soon. 

Deloitte, as just one of the 'Big Four' consulting firms (Deloitte, EY, KPMG and PricewaterhouseCoopers [PwC]), revealed in late 2018 it was on the acquisition hunt in search of Google Cloud partners across Australia, New Zealand and the wider Asia Pacific region, as it seeks out specialist expertise.

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