Tom Spencer

Accenture reports that poor customer service causes many people to switch providers, particularly in emerging markets. Accenture estimates that the cost to companies in South Africa due to customer switching is worth US$47 billion, and has dubbed it the "Switching Economy". For more details, read the full article.

Deloitte Anjin, the Korean member firm of Deloitte, may have been caught cooking the books. Back in 2009, Ssangyong Motor fired more than 2,000 employees. Last week, and 5 years later, a Korean Appeals Court ruled that the layoffs were invalid because they were based on Deloitte Anjin's “wrong” evaluation of Ssangyong’s value. The Ssangyong Case has led to of allegations that Deloitte Anjin engaged in accounting fraud. The allegations could have serious implications for Deloitte Anjin since, even if unsubstantiated, they could damage its credibility and bottom line earnings in the Korean market. The allegations could also have serious political implications since the Korean regulator, the Financial Supervisory Service, had previously cleared Deloitte Anjin of wrongdoing after an extensive investigation. Potentially bad news for Deloitte, but a boon for its main rivals in the Korean market: Samil PwC, Samjong KPMG Advisory, and Ernst & Young Korea. For more details, read the Korea Times article.

Eric, I agree that we should be open to discussing all aspects of an issue, even if it involves a person's culture. Can I suggest, however, that if you want to make statements that concern a person's cultural background that you provide more substance and context. This will help you avoid giving us the impression that you are intolerant and prejudiced. I'm not aware of Gupta being targeted based on his cultural or racial background. The reality is that he was a very well well connected and respected individual within the American business community. It may be that he was used as a high profile scapegoat, but if he was then this would be a result of his status within the business community, not his cultural background.

Please note that this useful Consulting Guidebook can be downloaded for free until February 28th 2014 using Coupon Code "NEWMEMBER".

Please note that this useful Consulting Guidebook can be downloaded for free until February 28th 2014 using Coupon Code "NEWMEMBER".

Accenture has found that Singapore ranks first in their use of “digital government” based on a 10 country comparative study which looked at Brazil, Germany, India, Norway, Singapore, South Korea, Saudi Arabia, UAE, the United Kingdom and the USA. Accenture appears to have defined "digital government" broadly to include offering online portals to access public services, employing digital channels to communicate with citizens, and using social media to engage with the community. The survey found that 81% of respondents would like their government to provide more services through digital channels. For more details, read the full article.

BCG reports that cheap natural gas will give the US a cost advantage in a range of industries. According to BCG, this cost advantage has already started to boost investment and employment. For example, low electricity prices are encouraging investment in energy-intensive industries like steel, and the cost advantage is amplified by the fact that US competitiveness was already improving due to low labor costs (relative to other developed countries), rapidly rising wages in China, and high productivity. For more details, read the full article.

Capgemini is planning a new global service line called ‘Digital Customer Experience’ (DCX). This will consolidate Capgemini's existing digital resources and capabilities with the aim of enabling companies to deliver a seamless multi-channel digital experience to their customers. Simon Short, Head of the Digital Customer Experience Global Service Line at Capgemini, stated that DCX will enable companies to create a “meaningful experience for their customers”. For more details, read the full article.

Ernst & Young's Advisory Services has been named in the 2014 CRM Watchlist, a prestigious US-based list developed by Paul Greenberg. EY was one of two firms named as a 2014 Watchlist Elite Winner in the consulting and systems integrators category. The Sacramento Bee reports that Greenberg expects Watchlist Elite Winners "to have the strongest impact and possibly greatest rate of success in the marketplace" in 2014. For more details, read the full article.

I agree with CbrConsultant. Gupta is for all intents and purposes American, and we know that in the fall out from the financial crisis many wealthy and/or powerful American business people were found to be taking liberties with their privileged positions within society. They came from many different cultural backgrounds, and falling back on cultural stereotyping in the Gupta case does not help us understand the issues more clearly or help shine additional light on what happened. In my experience, insider trading is an ongoing problem in the financial markets, but one which is only mentioned and examined during financial downturns when the government is under pressure to find money and produce reasons for the crisis (and find scapegoats to blame). But the more interesting question is why did McKinsey not suffer any real harm from the scandal? I had the privilege of chatting with Ian Davis last year at a networking event at Oxford's Said Business School. I challenged him on the McKinsey brand and why it would continue to endure. His answer was a straight forward one. He stated simply that McKinsey hires excellent staff who produce quality work in the areas where they compete. In the mine of graduates, there are 3 top firms McKinsey, Bain and BCG. But in the mind of clients, Davis said that the story is a different one. McKinsey might competing with LEK in one engagement, or BearingPoint in another. His view was that the brand is simply a function of the quality of the work which the firm continues to produce. For my part, I think Davis' argument is a strong one, but it glosses over a few details. To understand why McKinsey's brand was not damaged it is important to understand "what is a brand?" McKinsey's brand is its corporate reputation, what people say about it when it's employees are not within earshot. And so, Davis' answer provides one piece of the puzzle. Even though the Gupta scandal may have looked bad for McKinsey, Davis argued that clients continue to regard McKinsey as the best consultants in the areas in which they compete. This is most likely true. However, one aspect that Davis didn't mention is that many McKinsey clients are also McKinsey alumni. As Eric mentioned, McKinsey has an impressive alumni network and the alumni have a vested interest in protecting the reputation of a firm which helped them to excel in their careers. Relevant to this discussion, Duff McDonald has produced a history of McKinsey called The Firm: The Story of McKinsey and Its Secret Influence on American Business.

Accenture and DataStax have formalised their ongoing collaboration to help clients derive insights from big data seamlessly and rapidly. According to MarketWatch, the two companies will continue working together to provide clients with real-time big data capabilities enabling them to detect and prevent fraud and create more personalised interactions online. Accenture brings to the table deep industry experience and analytics skills, and DataStax brings its enterprise-ready big data platform. For more details, read the full article.

Duff McDonald has produced a history of McKinsey called The Firm: The Story of McKinsey and Its Secret Influence on American Business. One of McDonald's central questions is "how do these guys keep getting away with it?" McKinsey's has been involved in a large number of corporate failures over the decades. Enron was the creation of Jeff Skilling, a former McKinsey consultant. Enron, which ultimately went bankrupt in 2001, paid McKinsey $10m a year for advice, and McKinsey fully endorsed the accounting methods that caused the company to implode. Financial Crisis - McKinsey also advised most Wall Street banks during the credit boom of 1990s, and supported the securitisation of mortgage assets, a practice that destabilised the global financial system. Corruption - Rajat Gupta, former MD of McKinsey, was convicted for insider trading in 2012 for passing confidential information to billionaire hedge fund manager Raj Rajaratnama. Yet McKinsey somehow keeps bouncing back. Understanding Mckinsey's history is quite enlightening, and disturbing. For example, McDonald chronicles the work of Arch Patton, a McKinsey consultant during the 1950s, who promoted higher pay for America's corporate bosses. At one stage Mr Patton accounted for a tenth of the firm's billings. For more details, read the reviews on Amazon.

BCG has published its third report on the global luxury sector, Shock of the New Chic: Dealing with New Complexity in the Business of Luxury. The report introduces BCG's three Metroluxe Indices to track the status and growth potential of the world's richest cities. The indices help brands determine which cities should be priorities, where brands should expand existing retail outlets rather than opening new stores, and where tourists spend the most on luxuries. For more details, read the full article.

Forbes has named Rightpoint as one of America’s Most Promising Companies for 2014. Founded in 2007, Rightpoint is a fast-growing Chicago based digital agency and technology consulting company. Rightpoint has tried to rethink the "typical" consulting model by combining aspects of management consulting, IT consulting and creative agency services to help organisations transform their business. For more details, read the full article.

The Consultancy Buyers Forum has produced a new online guide, called the CBF Blueprint, to help buyers purchase management consultancy services. We understand that the guide covers every stage of the purchase decision, including defining business needs, choosing suppliers and evaluating the value of projects. For more details, read the full article.

Deloitte is running a Social Innovation Pioneers programme. It plans to choose around 15 social enterprises to receive up to £1m worth of support in the form of staff time and skills. The aim is to help social enterprises grow and become investment-ready. Over the previous 2 years, Deloitte has supported 46 innovative businesses from a variety of industries in the UK. In order to be eligible, an enterprise needs to have a clear social impact and an innovative product or service; they also need be able to explain the type of support they require from Deloitte. The deadline is Sunday, 23rd February. To apply now, visit the website.

Ashley, can you explain your understanding of Uber. Do the owners of Uber cars effectively act as taxi drivers? If so, aren't there significant security concerns with letting 100,000 random people act as uncertified taxi drivers.

I think in some sense an additional fee is justified. When I was studying in Oxford last year, I used the local NHS doctor once, but some other students used the NHS services quite intensely. None of us had to pay. Arguably, this kind of free service should be reserved for tax payers and others should pay a fee (although, hopefully a small one).

What kind of a University is this? There is no open bar in Oxford. I need to talk to someone about that...

Deloitte announced in December that it has launched Deloitte University Europe, the Middle East and Africa (DU EMEA). The aim of the new institution is to help the organisation stay on the leading edge of learning and innovation. Situated in Belgium (maybe Deloitte just likes chocolates and beer?), this is Deloitte's second university. The first was built in Texas two years ago. The new initiative makes sense from a number of angles: 1. Thought leadership - there is no better way for an accounting/consulting firm to be on the leading edge of ideas and insights than to have a university in its back pocket. 2. Recruitment - the ability to offer staff the opportunity to attend courses at the firm's in house university is a great perk, and could help to attract the best candidates. 3. Networking & Retention - the ability to offer staff the opportunity to attend courses at the firm's in house university is also good for business. It allows staff to network in a more relaxed and collegiate environment. Research suggests that staff who have friends at work are more likely to do good work, and less likely to leave. For more details, read the full article.

Tone, in my view, the local business model is one which makes more sense in a globalised world. If you can use teleconferencing and knowledge management software to enable knowledge sharing among consultants in different locations then surely local consultants can benefit from consultants in other offices without having to fly them in.

Reuter's report that Deloitte has become the world's top accountant (by revenue). Fee income in 2013 for the Big Four is reported as follows: $32.4 billion for Deloitte; $32 billion for PwC; $25.9 billion for EY; and $23.4 billion for KPMG. This report raises three issues worth noting. Firstly, Deloitte's lead as top firm (as measured by revenue) may be brief since PwC and Booz & Co are currently in merger talks. This would increase PwC's revenue by more than $1 billion. Secondly, the report conflates the ideas of "highest revenue" and "top accounting firm". While the Big Four do have the highest revenue figures and are thereby able to spend the most on marketing, there is no evidence to suggest that the big firms actually produce the highest quality audit work. Audits at the Big Four are primarily conducted by squadrons of junior business analysts fresh out of university, and it is entirely possible that mid-tier firms like BDO and Grant Thornton (mid-tier as measured by revenue) may actually produce higher quality audits. Thirdly, and most importantly for our purposes, the Reuter's report appears to gloss over the fact that firms like Deloitte and PwC are no longer mere accounting firms. The PwC merger with Booz & Co is a case in point, and less than half of PwC’s revenues now come from its assurance business. Consulting is one of PwC’s fastest growing operations.

ACME is a management consulting firm in America's northwest. With a unique business model, one which only deploys senior-level consultants, the firm is expanding quickly and has recently opened an office in its third city, San Diego. ACME’s model is also entirely local. It doesn't fly in highly paid junior consultants with no experience, but instead deploys experienced consultants who live and work in the same community, serving local companies. Managing Director of the San Diego office, Nilay Thakkar, stated “We see San Diego as a very good fit for our low-ego, results-focused firm. At ACME we recognize that we don’t matter – results do – and we are eager to prove our worth in San Diego.” According to the Portland Business Journal ACME has been recognized as one of the Fastest Growing Private Companies for seven straight years. While the firm's low leverage model means that it is unlikely to challenge the big players any time soon, its continued profitable growth suggest that it's doing something right. ACME's business model may be one which other small consultancies might do well to emulate. For more details, read the full article.

Deloitte Digital and Konrad Group have announce a strategic alliance in Canada. The alliance builds on Deloitte's strong business and technology advisory practice and Konrad Group's world class digital capabilities. It looks set to make Deloitte Digital Canada a one-stop shop for digital strategy, web design and development, and systems implementation. For more details, read the full article.

BearingPoint is one of Europe’s leading management and technology consulting firms. and has reported strong results for 2013. BearingPoint has reported 2013 revenues of €550 million, up 8.4% compared with 2012, and has expanded its global footprint. In 2013, BearingPoint opened new offices in China and Ukraine, and established new strategic alliances in Turkey and Spain. For more details, read the full story.