For the better part of 20 years, we’ve casually lumped a sizable segment of the consulting industry into an easily discernible mass. The Big Five accounting/consultancy firms—along with their earlier iterations, at eight and six—have been the industry’s most identifiable cluster over the last decade. Now we’re witnessing the final disintegration of the Big Five.
I’ve written extensively on this shift over the last year, but e-hype overshadowed much of the conversation. A year ago, folks allotted the industry’s balance of mindshare to newer pure-play consultancies: the Diamonds, Sapients, and Scients. The Big Five looked hopelessly fuddy-duddy by comparison.
While the e-consultancies received hosannas, the Big Five took time away from the spotlight to find religion. Prompted by the SEC's aggressive review of potential conflicts of interest involving accounting and consulting, each of the Big Five embarked on a course that has fundamentally separated consulting from accounting. Now, these firms are trying to align their design/build/operate pieces to create a new class of super-consultancies.
From a consulting perspective, there is no Big Five anymore. Ernst & Young is gone. KPMG and PwC have one foot out the door. Will Deloitte and Arthur Andersen rally around the Big Two?
Onlookers and analysts still wishfully refer to the Big Five as consulting’s harbinger; witness the upcoming Business Week industry outlook on professional services (a first for the industry).
Yes, at one point, all these firms shared the same peculiar roots and structure. But much like kids growing up, the Big Five consultants have all moved on to play with different friends.
Heard on the street
Art Fritzson, CEO of Aestix—the new e-business division of Booz-Allen & Hamilton (BAH)—tells us the spin-off should be viewed as a “strategic alliance” with the parent company. Actually, Aestix is a bridge between BAH’s government-dominated technology division and its more traditional commercial consulting business. BAH has always found it challenging to present a cohesive face for these two sides. From that standpoint, Aestix provides a certain amount of logic. The stakes are big, since Fritzson and his team traded BAH partnership stakes for Aestix equity.
Inside Consulting is written by Tom Rodenhauser as a free weekly supplement to The Rodenhauser Report. The report informs senior advisors and business executives of consulting trends and best practices. Subscription cost is $295 per year for 10 issues. Copyright 2000, Consulting Information Services, LLC. Reproduction is prohibited. Quotation with attribution is encouraged.