Insight Interview: Richard Houston, Deloitte

Deloitte’s Managing Partner for Consulting, Richard Houston, describes 2016 as another strong year. “We saw headline growth of around 12% on a like for like basis. Indeed, this was largely driven by digital and technology consulting, but our operational and human capital businesses also performed well. All our major sectors grew, with particularly strong results in financial services, pharmaceutical, consumer goods and the public sector.”

Richard attributes Deloitte’s success to its end-to-end involvement in transformation. “Clients want advisers who take a greater ownership of business transformation and see it through into delivery. We’re doing that. These new requirements are underpinned increasingly by sophisticated outcome-focused commercials. Our transformational delivery support can mean providing both the business advisory services and the underlying technology solutions, which may ultimately include managed services. With a major retailer, for example, we have designed and built their entire online model. We host it and are rolling it out for them globally.”

2017 is likely to be a little slower, in Richard’s view, owing to political and economic uncertainty. “However, clients are not as yet altering the fundamentals of what they want from us. And if anything, the economic uncertainties are intensifying their need for innovation. Clients must have workforces that are fit for the future. Their organisational design, systems and culture must be as agile as possible. Business leaders have to understand where to invest in new capabilities and products. They also need to decide what to deliver themselves and what to outsource or achieve through collaboration with others.

“Collaboration is also increasingly important to us as advisors. As part of our strategic alliance programme, we have announced partnerships with Apple and McLaren Applied Technologies.” Alliances such as this, as well as the products and IP they develop, represent a further shift away from the time and materials consulting model. “We might, for example, deploy a solution for a retailer, in conjunction with one of our strategic alliance partners, which allows them to optimise their discount stock pricing. We then receive a percentage of the money the retailer saves from using the solution.”

Disruption to client markets and the knock-on effects on the consulting model impact Deloitte’s recruitment profoundly. “As recently as five years ago, our new hires would have focused on strategic and analytical capabilities. We still need them. But now we need many more people with a mix of technical and creative skills. We are engaging more proactively with education institutions, with a much greater breadth of graduates and school-leavers, to enhance our understanding of what is out there and to promote improved awareness of the broad range of capabilities we need.”

Richard suggests that the traditional consulting analyst is not yet quite a dinosaur. But analysts have had to evolve, adapt and acquire new capabilities. “And that isn’t just being driven by Deloitte and the needs of our clients. Increasingly, graduates and school-leavers desire complex, satisfying careers, in which they will move from business to business, working across sectors. These exciting new career paths require adaptability and a richer palette of workplace skills.” Richard’s ideal consultant teams now include people well versed in the concept of ideation. “They can visualise and create a new user experience. But they can then translate it into a technical solution which they plan, build and execute.”

Technology is also expanding Deloitte’s advisory toolkit. “We’re seeing much more use of AI, cognitive and robotic process automation.” Will that mean the replacement of consultants by robots? “There will certainly be increased automation of some processes. But I don’t predict the end of human consulting!

“Instead, what we will see in the immediate future is a smarter industry, one that will blend human and technological resources. But what makes the scale of the industry di cult to predict at this stage is the complex nature of business digitisation. There is certainly large-scale mass software production on the one side, with remote, Cloud- based solutions. But on the other, clients also need agile delivery teams, often located very close to the business. Meeting that need will require skilled people and may even put pressure on some existing o shore delivery models.”

One technologically enabled innovation, which Deloitte is embracing as an early adopter, is crowdsourcing of insight, ideas and market evidence. “We are very strict about whom we use and apply quality controls. We don’t think this kind of model will disintermediate consulting. But it can augment our o er. Through it we might obtain visual evidence for clients to support a product placement or market entry strategy. That evidence still needs to be put in a persuasive framework by advisors the client trusts. But the approach is definitely a new and rather powerful part of the advisors’ armoury.”