EY recently announced its acquisition of Society Consulting, a US-based analytics and big data consulting firm.
Research firm TBR analyses the strategy of EY for investing in Society Consulting, which brings EY expertise in IBM- and SAP-based systems and a presence in the telecommunications, media and retail space.
Consultancies are increasingly pressured by IT services providers that have moved to consulting-led models and/or expanded their consulting practices.
EY addressed the situation with aggressive acquisitions. It acquired start-ups like the NorthPoint, Intuitive, Seren and InWave Digital in late 2015.
For EY, these aggressive acquisitions are a mean to close the gap with more technology-driven competitors and extending the firm’s digital advisory businesses.
TBR said the addition of Society Consulting adds depth to EY’s interactive service capabilities.
Other than acquisitions, EY is turning into a viable contender and partner as it builds out a complete stack of DMS offerings.
Society Consulting’s relationship with Microsoft, EY’s recent partnership with LinkedIn and Microsoft’s acquisition of LinkedIn provide a cohesive link to a potentially large long-term advisory-through-CRM management play for the EY-Microsoft alliance in DMS.
In 2015, EY had made a strategic alliance with Microsoft in the areas of analytics, cybersecurity, digital enterprise strategy and emerging technology enablement. Combined with this, the acquisition of Society Consulting gives EY an opportunity to offer outcome-based services that address pain points beyond the CMO’s office.
TBR says integrating Society Consulting’s big data assets and tools into EY’s Synapse Analytics as a Service platform will enable EY to maximize ROI from the acquisition by supporting a broader range of analytics engagements with goals beyond customer experience.
Configuring analytics solutions to suit a wide variety of business outcomes requires a team of experts.
Society Consulting enhances EY’s prowess in operations consulting with employees from backgrounds in finance, HR and supply chain management.
EY already has a multibillion-dollar analytics practice with more than 7,000 consultants working on analytics projects in the U.S. alone.
So, the real value EY gains from the Society Consulting acquisition is in the company’s big data integration, implementation and application maintenance portfolio.
According to TBR, expanding its analytics professional services capabilities beyond advisory services enables EY to keep pace with Big Four peers such as Deloitte, which also invests in integration and outsourcing resources to execute on consulting-driven analytics road maps.
Society Consulting’s integration partnerships with major multiline analytics players IBM, SAP and Microsoft are table stakes, as these three vendors (and Oracle) continue to dominate the analytics software market in revenue and customer usage.
According to TBR’s 4Q15 Digital Marketing Services Benchmark, EY ranked No. 4 in revenue growth, expanding 27.3 percent annually.
TBR does not believe Society Consulting will impact EY with the same magnitude as Fjord and Accenture in May 2016.
However, EY has clearly begun keeping pace with competitors determined to transform internally even as they advise clients on digital transformation.
Given the cultures of both firms, EY believes Society Consulting’s executive leadership background from the finance and human resources industries will contribute to rapid integration and sustained success.
Additionally, Society Consulting has historically used C-Suite access for client engagement, albeit primarily the CMO, aligning with EY’s desired advisory positioning.
While the acquisition addressed all area related the company portfolio, it does not address artificial intelligence (AI).
TBR believes AI will become essential to dealing with big data as intelligent machines become increasingly adept at processing, learning and adapting behavior based on new inputs with diminishing human intervention over time.
Though the AI market is still in a nascent stage, vendors’ aggressive investments in technology platforms and marketing around AI-enabled business solutions make this an area where consultancies such as EY stand to benefit tremendously.
TBR expects that EY will rely on acquisitions rather than hiring to build AI expertise. Success will require keeping a vigilant eye on the AI.