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SWOT: Deloitte, Business Consulting

Services, Worldwide
Gartner for Business Leaders Research Note G00175106, Rolf Jester, Jacqueline Heng,
Michael von Uechtritz, 14 May 2010, V2 RA4 05202011

Deloitte is a global provider of audit, tax and advisory services


and the largest provider of business and IT consulting services
worldwide. We analyze Deloittes business consulting operation
worldwide, identifying its strengths, weaknesses, opportunities
and threats.
ANALYSIS

Introduction
This document contains a strength, weakness, opportunity and threat (SWOT) analysis for
Deloitte and the business consulting services it delivers to the global market. We list here only
those characteristics that have the greatest potential impact on Deloittes market position and
strategy. Each characteristic is examined in terms of its potential impact on the firms market
position and is rated as high, medium or low, according to its impact.
This document does not cover political, economic, social and technological (PEST)
characteristics, which are seen as universal factors affecting all players in the global business
consulting service market.
Deloitte competes in the business consulting services market, which Gartner estimates to
be worth $20.6 billion in 2010 out of a total of $73 billion for the overall consulting market.
It is a highly competitive and fragmented market in which Deloitte must differentiate itself
from a variety of types of competitors including: established management consulting brands,
such as McKinsey & Co. and BCG; boutique or niche consulting firms in several disciplines;
large global IT services providers, such as Accenture, Capgemini and IBM; and India-centric
consultancies, such as Infosys Consulting and Tata Consultancy Services. Deloitte must also
differentiate itself from immediate peers Ernst & Young, KPMG and PricewaterhouseCoopers,
the other members of the so-called Big Four that have an accounting heritage. Competition
with the business consulting arms of software and technology providers, such as Oracle
and SAP, is more in the technology consulting area, which is not the subject of this
SWOT analysis. Finally, Deloitte also competes with emerging consulting sources, such as
community networks.
Firms in this market face price pressure on consulting day rates and frequent changes to
technology that affect clients business processes. They also need to deal with the threat
and opportunity offered by new technology-based delivery models, such as online advisory
services. Business consulting services involve a mix of capabilities that reflect traditional
management consulting disciplines, such as operational, organizational or process consulting.
The foundational capabilities typically do not change dramatically, but the business and
technological environment in which the clients operate is changing rapidly indeed.

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Under current economic conditions, pressures on provider revenue
remain high. Consultants must update their knowledge base
frequently to keep pace with evolving business and technology
needs. Gartners Hype Cycle shows how dynamic the business
conditions are for providers and clients.
In 2009, many buyers of business consulting were focused on
immediate cost reduction as a result of the global recession. We
expect buyers will now cautiously start increasing their spending:
Our global forecast is for a 5.1% increase in business consulting
expenditure in 2010.
Deloitte was chosen for this SWOT analysis because of its
overall stature and influence in the business consulting service
marketplace. It is the largest global provider in terms of consulting
service revenue in Gartners 2009 market share, with $4.4 billion
revenue, ahead of IBMs $4.0 billion (see Table 1).

Historical Context The Big Four


Mergers over the past couple of decades have created the Big
Four accounting, auditing and consulting firms: Deloitte, Ernst &
Young, KPMG and PricewaterhouseCoopers. In the early 2000s,
the other three, acting on an understanding of the new regulatory
environment, divested parts of their consulting businesses in
various ways; they eventually rebuilt them to different extents.
Although Deloitte also had prepared to separate its consulting
business, ultimately it retained that business throughout this period,
including the strategy, operations, human capital and technology
capabilities. The relative lack of disruption has been a competitive
advantage to Deloitte in the consulting business; it used the
uninterrupted time to establish its intellectual capital and take a
different route from that taken by its competitors.
The Big Four are large players in the global consulting service
market, competing for discrete project spending. All are included
among the global top 10 providers by market share. Table 1 shows

Table 1. Top 10 Consulting Service Providers Revenue, Growth and Market Share, Worldwide, 2008-2009 (Millions of Dollars)

Provider

2008
Revenue

2009
Revenue

2008
Share (%)

2009
Share (%)

Growth
Rate (%)

Deloitte

4,385

4,354

5.7

6.2

-0.7

IBM

4,353

3,958

5.6

5.6

-9.1

PricewaterhouseCoopers

3,316

3,225

4.3

4.6

-2.8

Accenture

3,074

2,590

4.0

3.7

-5.7

Ernst & Young

2,348

2,327

3.0

3.3

-0.9

CSC

1,926

1,769

2.5

2.5

-8.2

KPMG International

1,735

1,689

2.3

2.4

-2.7

Fujitsu

1,561

1,473

2.0

2.1

-5.7

HP

1,536

1,313

2.0

1.9

-14.5

10

Capgemini

1,566

1,291

2.0

1.8

-17.6

Source: Gartner (April 2010)

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the estimated 2009 consulting market share according to Gartners
definitions. Gartner neither covers nor forecasts consulting related
to mergers and acquisitions, valuation, bankruptcy, or other
transaction services, in which all the Big Four are also invested.

Four commands up to about a quarter of the market share for


audit services among major clients, three-quarters or more of
the worldwide large-client market is available to each without
constraints for consulting services.

Note that the market share data is for consulting overall, which
includes both business consulting (the subject of this SWOT report)
and IT consulting.

Fees received for nonaudit services from an audit, attest or review


client may be perceived to threaten the independence of an audit
firm. Accordingly, Deloitte may be required to apply safeguards
to mitigate or eliminate those threats including seeking, where
required, preapproval of the audit clients audit committee. Auditor
firms adhere to this and other independence requirements by
means of communication, restrictions, policies and procedures,
and disclosure requirements applied to nonaudit services including
consulting services. Therefore, a statutory auditor (see Definitions
section) is obliged, under professional standards, to refuse any
nonaudit service that compromises its independence from an audit,
attest or review client.

It is noteworthy that Deloitte has not only maintained the No. 1


position in this table, gaining market share, but has also managed
to lose almost none of its revenue in this category during such a
difficult year.

Rules for Independence Limit Auditors Such as Deloitte


Deloittes service lines include assurance, tax, transaction,
consulting and advisory services. The professional rules for auditor
independence apply to any accounting firm or organization that
performs audit, attest or review services. The auditor independence
rules vary by jurisdiction, and in some instances, constrain
Deloittes ability to compete because they would not allow the
firm to provide certain limited services to its audit, attest or review
clients. However, Deloitte may provide consulting and advisory
services to its audit, attest and review clients, depending on the
independence rules that apply in the circumstance and the nature
of the specific services. Deloitte has assessed what services it can
provide to its audit clients and has guidelines for its practitioners
to indicate the services it can provide. Other providers, such as
Capgemini, CSC and IBM, are not subject to such constraints.
However, it is important to recognize that since each of the Big

Auditing firms, like other commercial enterprises, may be subject to


legal disputes that can cause adverse publicity. This is an inherent
risk of the audit business that is dealt with through professional
liability insurance and other mechanisms.

SWOT Analysis
Figure 1 provides an overview of Deloittes worldwide business
consulting strengths, weaknesses, opportunities and threats.
This SWOT analysis draws on Gartners research and analysis of
Deloitte in the business consulting services market. Figure 2 shows
Gartners assessment of Deloitte in a weighted summary of its

Figure 1. SWOT: Deloitte, Business Consulting Services, Worldwide

Strengths
Value-driven approach
Business-led, IT-enabled approach to
engagements
Depth in vertical industries and business
processes
Ability to invest in growth
Stability and capability from audit business

Weaknesses
Brand awareness limited to only some
executives in the client enterprise
Global association structure
Relative immaturity of global delivery capability
Underpenetration into Asia
Limitation of market opportunity due to audit

Trusted brand
Breadth of service and skills
Opportunities

Threats

Change in economic and business environment

More-focused competitors from IT heritage

Green agenda

IT providers with business capability

National infrastructure investments and reaction


to the global financial crisis

Software brands

Pattern-Based Strategy
Midmarket penetration
Other high-growth sectors

Source: Gartner (May 2010)

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strengths, weaknesses, opportunities and threats. To create the
figure, we analyze the strengths and weaknesses that are internal
to the provider, and the opportunities and threats from external
sources. For each category, we define a number of characteristics
based on parameters such as company or market, business
consulting services, finance, and operations and assign to each a
weighting. Each characteristic is examined in terms of the potential
impact on the providers position in the market and whether this
factor is addressed or ignored in the next 12 months. These
impacts are then rated as high, medium or low to determine a final
numbered rating for each quadrant in the figure. The sizes of the
four boxes in Figure 2 are a representation of the weighted rating of
the strengths, weaknesses, opportunities and threats.

The specific strengths, weaknesses, opportunities and threats are


analyzed below. Our analysis identified dozens of factors, each
of which could be important in particular circumstances. Here we
describe only the top characteristics; we are prepared to discuss
the others with clients individually.

Strengths
Value-Driven Approach
Deloittes value-driven approach is one of the attributes that sets it
apart. All major consulting service providers would claim, if asked,
that they focus on value for the client. But for Deloitte, this is an

Figure 2. SWOT: Deloitte, Business Consulting Services, Worldwide


(Graphical Representation)

W
O

Source: Gartner (May 2010)

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explicit part of its strategy, day-to-day client approach, offering
and messaging, embodied in the models and artifacts it uses. It
is evidenced, for instance, by the use of its Value Map to identify
priority opportunity areas within client organizations for improving
the value of the enterprise. Deloitte claims to stick to the client
engagement until there is improvement in the chosen variable (till
the needle moves on the dial). And while that may not be strictly
the case in every instance, it is a fair representation of the firms
intent and style of working. In those business-led assignments that
eventually lead to IT work, this will be a particular advantage, as
genuine concern for real, defined business value can occasionally
be somewhat neglected by some of the more IT-centric providers,
despite all the claims to the contrary.
A value-based billing approach is not an absolutely necessary
consequence, but Deloitte does offer value-based billing, sharing
risk and reward with the client. Many service providers say they
offer value-based billing, and some do offer it; for Deloitte, it is wellsuited to its value-based business-led approach using the Value
Map. The firm also has a relatively mature business approach to
value-based contracts, treating them as a portfolio of investments
managed by a specific team, balancing risks and returns across
the whole. This is in contrast to the one-off, decentralized approach
taken by some other providers.

Business-Led, IT-Enabled Approach to Engagements


The phrase business-led and IT-enabled is one that Deloitte uses
of itself, but we have researched and assessed this firm in detail
and believe this to be a realistic description of a key strength.
Deloitte is clearly business-led in its approach to clients and
services. Gartners definition of business consulting is restricted
to that part of business consulting that leads potentially to IT
implementations. Thus, for the purposes of this SWOT analysis,
being totally business-led puts Deloitte in a good position, vis-vis more IT-centric providers, to drive the strategy for those
engagements that lead on to IT work downstream. Our user
research shows that understanding the clients business is one of
the key factors that determines a satisfactory consulting outcome
and results in client satisfaction.
However, Deloitte is also IT-enabled, with a strong technology
practice, which is not directly the subject of this document. That
matters even in business consulting assignments because IT is
now ubiquitous: No business decision can be executed without
IT; it is central to all processes. Thus, while business issues must
lead, an IT capability at some level is equally essential today. Yet,
paradoxically, because IT is everywhere, it is not the right function
to take a leading position within the business.
An example of Deloittes approach is Services Thinking, a
framework that Deloitte uses for analysis of business functions
and processes. It is business-oriented but ties in naturally with the
service-oriented architecture (SOA) approach in IT and may lead
downstream to the use of SOA for implementation. Of course,
few things in the services business are unique, and other major

providers use some similar techniques: IBM Global Business


Services, for example, has a method called the Component
Business Model, which has some similarities, and Accenture uses a
somewhat similar approach in some situations.
The firm, therefore, has the ability to implement its advice, right
through to the IT implementation, across a wide range of verticals
and business functions and processes.

Depth in Vertical Industries and Business Processes


Business consulting service providers aim to differentiate
themselves by demonstrating the relevance of their functional and
industry best practices, strategic road maps and industry processoriented knowledge. What varies among these providers is their
different levels of business, process and technology expertise and
their project- and technology-related implementation capabilities in
different market segments.
Deloitte exhibits vertical industry business and process knowledge
in depth, resulting from the consulting business itself, the audit
practice (in common with the Big Four) and Deloittes continuing
investment in research. The strongest verticals (by market share) for
the firm overall are financial services, manufacturing, government,
communications and utilities. Thought leadership activities, such
as significant and valuable research publications, are among the
evidence for this strength, as is client feedback via surveys and
direct discussions. Deloitte does have significant revenue from the
manufacturing sector worldwide, but we have found some cases
of weakness in execution compared with several competitors in
consulting related to key business processes in manufacturing
industries. Horizontal business processes in which the firm
exhibits strengths include finance and accounting; human capital
management; marketing (including pricing); and IT strategy.
Industry Prints is one of the intellectual-property-based
methodologies that Deloitte uses to generate productive client
conversations and engagements. This method helps make delivery
more repeatable and efficient.
In common with the Big Four, Deloitte has long experience
with the real end users, with executives and with client staff
at all levels, through its multiple services, including audit. This
entails first-hand knowledge of processes at the execution level
in many organizations. It puts Deloitte in a position to help with
the real issues and work with client staff at all levels to gain user
acceptance for change, and client staff engagement.

Ability to Invest in Growth


Deloitte has demonstrated that it has the funds to invest in growth:
They are being used to continue to build the breadth and depth
of consulting capability and gain market share. The firm is thus
making proactive moves, such as acquiring a key part of the
former BearingPoint at a good time in a down market. It continues

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to make smaller, focused strategic acquisitions globally. Other
investments include the substantial Deloitte University in Dallas,
Texas, which was prudently deferred during the financial crisis but
on which construction has now commenced.

Deloittes brand and position has also allowed it to gain entry to a


role as an independent advisor to national and local governments,
as well as international agencies. This further builds up its credibility
for corporate clients, as well.

Gartner judges Deloitte to have a clear and credible strategy for


the future of the business. Its investments have enabled innovation.
With Deloitte Digital, for example, the firm has shown a willingness
to invest and experiment even with moving beyond total reliance on
the traditional billable-hours model of professional services.

Breadth of Service and Skills

Unlike a publicly traded enterprise, the partnership model of leading


professional services firms like the Big Four has the advantage of
allowing strategic investments to be considered on their long-term
merits without undue concern for the quarterly results. However,
this requires the sort of mature financial management one would
expect from an accounting-based firm, because the discipline of
frequent public reporting is on the whole a good one.

Stability and Capability From Audit Business


For all Big Four firms, the audit business is a source of strengths.
Deloitte is able to deploy audit staff on some business consulting
assignments, especially those involving matters of risk, compliance
and controls. Likewise, the audit experience is a valuable source
of insight into the realities and challenges of the targeted vertical
industries.
The relative stability (though not unassailable) of the audit business,
which is comparatively predictable, counteracts the lack of annuity
revenue like that which some other consulting firms gain from
an outsourcing business. Deloitte does have some application
management business, but gains substantial stability from the audit
base, as has been seen through the global financial crisis.
In relation to that, it is important to point out that the base of audit
clients does not constitute an insuperable barrier to growth of
consulting. The regulatory restrictions exist but are limited. They
apply to U.S. Securities and Exchange Commission-registered
companies, and some similar rules apply in some other countries.
Essentially, the firm cannot implement its own advice regarding
the financial systems it is auditing. The restriction does not apply
to private companies, though some may have their own rules.
Deloitte, like the other Big Four firms, has robust client acceptance
policies and processes. In case of conflict, the firm makes a choice
whether to bid for the audit work or for consulting. Thus, while
there is some limitation imposed on targeting of accounts, the
remaining opportunity is still large.

Trusted Brand
Deloitte enjoys a trusted brand that works for CEOs and CFOs
and sometimes for some other C-level executives. The firm has
excellent long-term high-level relationships with executives. Such
relationships sustain the perception of cultural fit with the buying
organization, which is one of the key factors for satisfactory
consulting service relationships uncovered by our user-wants-andneeds research.

Cross-disciplinary skills allow Deloitte to work on the


interdependencies in its clients businesses and processes. This
approach focuses the firm on its clients business and on solutions
(from the outside in) rather than on traditional functional silos.
When it is applied effectively, it can be a competitive advantage.
In its service development, Deloitte has created Integrated Market
Offerings and Global Market Offerings as prestructured ways of
focusing an array of capabilities on commonly found business
issues. Examples include the following.
Competitive strategy
Business model change
Corporate governance and risk management
IT value management (at C-level)
Climate change and sustainability
International Financial Reporting Standards (IFRS)
Mergers, acquisitions and divestitures
Pricing and profitability
Finance transformation

Weaknesses
Brand Awareness Limited to Only Some Executives in
the Client Enterprise
Beyond the executives with which Deloitte has relationships, its
brand is known for the accounting business, but not necessarily
well-understood. Finance executives know Deloitte and the other
Big Four well; other C-level executives do not always have such a
clear picture of their broader capabilities. Particularly among CIOs,
who are increasingly involved in business consulting decisions,
even sophisticated buyers express continuing confusion about the
current status of the Big Four in consulting services.
This can mean, for example, that Deloitte does not necessarily
appear on the procurement list for services in functions beyond the
obvious finance area.

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Global Association Structure
The structure of the Big Four, including Deloitte, as associations of
independent country-level firms, necessary for the audit business,
also poses a challenge for business consulting. For instance, the
structure means that innovations in consulting services cannot
simply be rolled out in a centrally mandated manner. The partners
of the country firms have to be persuaded to take on new offerings
or other innovations. And because many of them are accountants
by education, they may be naturally (and possibly appropriately)
conservative in their investment and innovation decisions.
The structure can slow down decision making and is to some
extent a source of friction in cross-border deals. In Deloitte, this
factor exists, of course, but innovation still does happen and does
become rolled out globally. So while the firm seems to be more-orless effectively managing around this issue, there is a cost to that.
There is also a positive side to this issue. The very need to
persuade the global partners is in its own way a minor advantage. It
means that business cases have to be made very convincingly.

Relative Immaturity of Global Delivery Capability


Deloitte has gradually built up global delivery resources in multiple
lower-cost locations worldwide. The area of business consulting
covered in this SWOT report is not like IT development or support
work, in which a low-cost model is essential. Yet an effective and
appropriate global delivery model is already of importance for
business consulting as much as for more directly IT-related services
because of the possibilities for use of back-office specialists in
consulting engagements. It will become even more significant
with the expanded use of online advisory services that facilitate
collaboration by remotely located specialist staff. We note that
Deloittes HR approach for global delivery does support such
collaboration in the sense that employees in the offshore centers
have the same training and career development opportunities
as Deloitte staff anywhere. While that will tend to increase cost,
it should tend toward better outcomes and is a good fit with
Deloittes overall strategy and business model. However, on two
grounds, this area must still be described as a minor weakness in
relative terms. First, the maturity of the processes and information
infrastructure supporting global delivery engagements is not yet at
the level of the major IT-based competitors. Secondly, Deloittes
very structure as an association of member firms makes global
collaboration somewhat more difficult more subject to internal
friction on issues of contracts and pricing, for instance. In this
regard, it is a positive step that in some instances Deloitte uses
centralized teams for multicountry projects.

Underpenetration Into Asia


Deloitte remains somewhat underpenetrated into Asia/Pacific, and
its consulting business is particularly unevenly represented in that
high-growth region at present only 8% of total consulting revenue
for Asia/Pacific including Japan. It does have some pockets of
relative strength in Australia and Japan, but even in those countries,
the consulting revenues are small in the overall competitive
landscape.

Because business consulting does tend to lead to IT work, the


relative lack of capacity in technology integration and enterprise
application implementation in Asia is not an insignificant weakness.
However, Deloitte does have a good base in these geographic
markets and is certainly actively investing in them, as evidenced by,
for instance, its acquisitions in that region.

Limitation of Market Opportunity Due to Audit


As mentioned earlier, the professional rules for auditor
independence apply to any accounting firm or organization that
performs audit, attest or review services. The auditor independence
rules vary by jurisdiction, and in some instances constrain Deloittes
ability to compete because they would not allow the firm to provide
certain limited services to its audit, attest or review clients. We
pointed out earlier in this document that this limitation is not as
severe as may be thought. But it is still a limitation. In certain
cases, Deloitte may be required to apply safeguards to mitigate or
eliminate threats to independence. Major audit-based firms have to
make a conscious decision, for those clients where the issue arises,
whether to pursue the audit opportunity or the consulting one. That
means that there will be some organizations for which the firm will
not pursue consulting and advisory opportunities.

Opportunities
Change in Economic and Business Environment
The changing world economic and business environment creates
opportunities for major consulting firms to help clients with global
competitive and environmental challenges. These include the
following.
Tougher competition
Consolidation, mergers, acquisitions and divestitures
Growing awareness of business risk
Increasing regulation, but also deregulation in other areas
Growing public sector
Increasing globalization
Requirements for sustainability
Pursuit of agility
Growth of emerging economies
Growth of digital economy

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The strengths discussed earlier mean that Deloitte is wellpositioned to capitalize on these opportunities if it chooses. Its
own relative success in stemming serious revenue loss during the
economic crisis allows it to lead by example, especially for clients
that are themselves in services industries.

Green Agenda
The whole green agenda is a major opportunity for Deloitte. It has
a trusted brand and approaches this issue from a serious business
perspective, being seen to be on the same side as business
and yet with sound credentials and skills in areas such as carbon
emissions trading. The services required for this opportunity sit
comfortably with an accounting and business consulting heritage
such as Deloitte has. Businesses know they have to do something
and will turn to trusted advisors to help them. Thus, Deloitte has
invested in market offerings and recruitment for sustainability
services. Green IT is only a minor part of this because it affects
only a small proportion of business costs and environmental
impacts. The real impact is on the wider business; therefore,
business-led firms have a strong advantage in this field.

National Infrastructure Investments and Reaction to the


Global Financial Crisis
The need for, and investment in, national, government and physical
infrastructure in countries around the world is a major opportunity
for firms with breadth of capability like Deloitte. Right now, much
of this investment is driven by the many stimulus packages from
governments. But the initiatives will likely outlive the financial crisis
and its aftermath. The need for renewed and smarter infrastructure
energy supply, transportation networks, telecommunications
exists in mature economies, as well as emerging ones.
The global financial and economic crisis has also been
accompanied by visible financial scandals, law violations and
business failures, all of which have highlighted the need for risk
management, compliance initiatives, and global regulation or
agreements, such as IFRS. A firm like Deloitte is able to exploit this
opportunity by consulting to all participants, starting with those
investigating the problems and progressing to the governments
regulating them and then the enterprises forced to implement new
rules. To capitalize on the opportunity, Deloitte will, in some cases
at least, need to communicate its strengths in this area to all the
relevant stakeholders in such infrastructure.
Forward-looking new initiatives, such as the Institute for LargeScale Innovation, put Deloitte in a position to create new
opportunities for itself rather than just bidding for work.

Pattern-Based Strategy
Gartner has identified the need for enterprises to adopt an
approach to management and strategy based on pattern seeking
(see the Recommended Reading section). Firms like Deloitte, with
a strongly fact-based and numerate culture, used to dealing with
complex, tough and cross-disciplinary problems or opportunities,
should be able to build excellent business from this. On the whole,
Deloitte could exploit some real relative advantages here.

Midmarket Penetration
Deloitte already has excellent penetration in this segment. It reports
that outside the U.S., 70% of its total revenue comes from small
and midsize businesses (SMBs), and in the U.S., 61% comes
from SMBs. The local country-based audit practices provide
good access to this market. This could be exploited further, and
some of Deloittes innovations, such as Deloitte Digital, may prove
valuable for this. Deloitte conducts specific research into midmarket
business. In Australia, Deloitte is already experimenting with solution
offerings based on software as a service for SMB clients.

Other High-Growth Sectors


Other high-growth sectors that represent good opportunities for
Deloittes business consulting include sovereign wealth funds and
the public sector worldwide. In the longer term, the health services
industry will offer good potential.
Among service lines, enterprise cost reduction presents obvious
demand now but will remain strong in the long term. Deloitte has
good credibility in this area. For similar reasons, consulting related
to cash and liquidity continues to be an opportunity.

Threats
More-Focused Competitors From IT Heritage
Deloitte is to some extent vulnerable to more-focused IT services
providers because it is not easy, even at the scale of Deloitte, to
cover all aspects of IT that are needed to implement its consulting
advice. For some enterprises, working with consulting providers
that also provide their own technology is a pragmatic advantage.
This puts a limit on Deloittes ability to effectively control the
outcome of all its business consulting projects.

IT Providers With Business Capability


The competing brands that have successfully combined a business
focus with a strong IT background predominantly IBM Global
Business Services and Accenture, but also Capgemini and some
others pose a threat to Deloittes business. In an era when no
business decision can be effected without IT, competitors with
an IT heritage are not as disadvantaged as they once would have
been.
This is not to deny the validity of the strength pointed out earlier
Deloittes strong business orientation. This particular threat should
be seen as acting as a partial brake on the force of that strength.

Software Brands
Software brands, especially SAP and Oracle at present, have a high
degree of recognition and intent to use among buyers of consulting
services. Even though the consulting offerings of these vendors are
today centered on their own products, our demand-side research
does show a willingness by buyers to consider them for businessoriented services. Even if these specific vendors do not become
more active in that space, this buyer perception opens the door
to new types of competitors, new entrants and substitutes for
business consulting.

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Implications for Deloitte
Deloitte is in a strong position in the business consulting market.
But nothing stands still. We recognize that Deloitte is a firm whose
leadership is constantly challenging its own assumptions and the
business model. It should actively continue the following:
Invest, experiment and innovate in the areas of automation,
online services, emerging business models and offshore labor.
Apply thought leadership marketing, and manage it even more
rigorously.
Deliberately extend the capability and the brand into new areas
of client need, such as sustainability consulting, while avoiding
overextension.
It should undertake these steps to secure the future:
Work on an appropriate level of global integration of the
consulting business that is compatible with the current global
structure.
Carefully extend the relevance and awareness of the brand
among more nonfinance executives.

Automotive
Industrial products and services
Process industries
Consumer products
Retail, wholesale and distribution
Tourism, hospitality and leisure
Transportation
Electric power
Mining
Oil and gas
Water
Banking and securities

Closely monitor the Internet-based providers of business


services (and consumer services and digital content): They may
act as substitutes or competitors for some services, but they
are also potentially among the largest prospective clients.

Insurance

Develop local services and solutions for the high-growth


markets of Asia.

Real estate

In addition, we have identified several major opportunity areas in


this SWOT analysis. These are the ones that look most promising
for investment by Deloitte.

Company Overview
Deloitte refers to Deloitte Touche Tohmatsu, legally constituted
as a Swiss Verein (association) whose members are separate
partnerships in 140 countries worldwide. Each partnership is a
legally separate entity under the laws of its country and may have
its own subsidiaries. Thus, for example, Deloitte LLP is the peak
legal entity in the U.S. The Deloitte name and the origins of the
earliest member firms go back to the middle of the 19th century.
Deloitte provides audit, tax, consulting and financial advisory
services to public and private clients.
Worldwide, the firm employed 169,000 staff at its reporting date at
the end of May 2009.
The vertical industries served by Deloitte are as follows, varying
somewhat by geography:

Investment management

Education
International governmental organizations
International not-for-profit and nongovernmental organizations
National, regional and local governments
Health plans
Health care providers
Life science
Technology
Media
Telecommunications

Aerospace and defense

10
They are grouped into sectors as follows:

Technology integration Business integration and


optimization; information management; performance
management; platform architecture and infrastructure;
systems development; technology strategy

Consumer business and transportation


Energy and resources

Outsourcing Application management services; business


process management services

Financial services

Audit and enterprise risk services:

Life sciences and health care


Audit Auditing services, global IFRS and IFRS
implementation services; cross-border services; reporting
advisory services

Manufacturing
Public sector

Enterprise risk services/business risk Contract risk and


compliance; corporate responsibility and sustainability;
governance, regulatory and risk strategies; internal audit

Real estate
Technology, media and telecommunications

Enterprise risk services/information and technology risk


Data risk services; information and controls assurance; risk
management technologies; security, privacy and resiliency;
technology risk and governance

The main service lines are as follows:


Consulting:

Financial advisory services Forensic and dispute services;


electronic discovery services; reorganization services; valuation
services; corporate financial advisory; transaction services

Strategy and operations Strategy; finance; integration,


divestiture and restructuring; operations; supply chain;
outsourcing advisory

Tax services Business tax consulting; compliance and


reporting services; tax management consulting; private
company services; legal services; research and development
and government incentives; indirect tax; customs and global
trade; global employer services; high-net-worth individuals and
employed wealth; international tax and transfer pricing; mergers
and acquisitions.

Human capital Talent/people strategy; strategic change


and organization transformation; talent, productivity and
rewards; technology adoption; HR transformation; mergers
and acquisitions; actuarial, risk and analytics service
Enterprise applications Customer relationship
management; emerging solutions; financial services
solutions; Oracle; SAP; supply chain management

Table 2. Deloitte Combined Revenue (Billions of Dollars)


2009

2008

2007

2006

2005

2004

Growth
(%) 2009

Growth
Growth
(%) 2008 (%) 2007

Growth
(%) 2006

Growth
(%) 2005

Audit

11.9

12.7

11.0

9.8

8.7

7.4

-6.3%

15.5%

12.2%

12.6%

17.6%

Financial Advisory

2.0

2.4

1.9

1.5

1.3

1.2

-16.7%

26.3%

26.7%

15.4%

8.3%

Consulting

6.5

6.3

5.2

4.5

4.3

3.9

3.2%

21.2%

15.6%

4.7%

10.3%

Tax

5.7

6.0

5.0

4.3

3.9

3.8

-5.0%

20.0%

16.3%

10.3%

2.6%

Total

26.1

27.4

23.1

20.1

18.2

16.3

-4.7%

18.6%

14.9%

10.4%

11.7%

Source: Gartner (May 2010)

11
In May 2009, Deloitte acquired substantially all the North American
public-sector practice of BearingPoint, bringing some 4,250
principals and employees and an estimated $745 million in (2008)
revenue into Deloitte through an asset purchase agreement that
included assets associated with the Middle East public-sector
practice of the same firm (see Table 2).

Methodology
Deloitte was chosen for this SWOT analysis because of its
overall stature and influence in the business consulting service
marketplace as the largest global provider in terms of consulting
service revenue in Gartners 2009 market share.
The Gartner vendor SWOT analysis is designed for the use of
vendors as a supplement to their planning processes. Its primary
value is as an independent analysis of the vendors competitive
situation. The SWOT analysis provides a unique independent view
of the strengths, weaknesses, opportunities and threats for a
specific vendor in a specific market and geography.

Definitions
An audit firm is a legal person or entity approved in accordance
with law by the competent authorities to carry out statutory audits.
The term network means the larger structure that is aimed at
cooperation and to which a statutory auditor or an audit firm
belongs. The network aims for profit or cost sharing or shares
common ownership, control or management, common quality
control policies and procedures, a common business strategy, the
use of a common brand name, or a significant part of professional
resources.
Statutory audit means the audit of annual accounts or
consolidated accounts as required by law.
Statutory auditor is a person approved in accordance with law by
the competent authorities to carry out statutory audits.