A two-horse race for the Big Four?

It’s hard to distinguish between Big Four firms – at least that’s what we thought.  But our recent research with 400+ clients tells us otherwise.

There are certainly areas where clients do think these firms are hard to tell apart; “they’re all much of a much-ness”, was how one of them put it.  Certainly everyone associates them with financial management and regulatory-driven work: no surprise there.  And almost everyone says their people are “good”, though rarely anything more than good, even if their knowledge of specific industries tends to be rated highly.

But look a little more closely, and a different picture emerges.

Our research mapped what clients want against what they think individual firms are capable of providing.  In particular, we examined the capacity of firms, as seen by clients, to sell new services to existing clients, to work in different ways, and to adopt new delivery models.  What emerged was that PwC and Deloitte are associated with a wider range of services outside of conventional management consulting (we focused on technology and implementation) than KPMG and Ernst & Young. Clients talked of KPMG in a wide variety of conventional consulting areas, but very little outside it, and they associated Ernst & Young with financial and risk management more strongly than they did the other Big Four firms.

When it comes to their way of working, all four firms are seen to have strong technical capabilities, but once again there appeared to be a split: more people commented on the good cultural fit between PwC and Deloitte, and their organisation, and their ability to work alongside their staff in an integrated team, than they did for KPMG and Ernst & Young. It’s important to remember that what we’re talking about here are clients’ perceptions, rather than empirical evidence, but perceptions tend to be important because they say a lot about what business clients will hand to which firms.

However, none of the Big Four fare particularly well when clients talk about alternative delivery models.  “We needed to set up a new business unit from scratch, involving everything from target operating model to technology,” commented the strategy director of a UK financial institution.  “We could have asked a Big Four firm to do this, but we didn’t think they’d be able to move fast enough.” Or, as a French HR director put it, “Big Four firms have a wide range of services and I always feel that I’m paying for the entire firm when I’m just trying to find a small team of experts.”  New ways to deliver consulting services – and by extension new business models – will be one of the most important sources of growth for consultants in the future.  There may be signs of split emerging between the Big Four in terms of the way clients view them, but in this respect at least the Big Four field is wide open.