It used to be in the accounting field that only certain firms could handle the consulting end of the industry. Specific types of accounting firm consulting only happened with companies that had years of experience in the field, such as BCG, Accenture or McKinsey. Then the digital transformation happened, which may open up an entirely different world to smaller firms that could engage with the consulting side of the business.
Expanding the Business
When the Big Four used digital tools to try to capture larger shares of the consulting market, Deloitte stood out from the rest. It acquired a strategy firm and partnered with several companies that created digital tools. Deloitte was then one of just a few accounting firm consulting businesses around. Once other companies recognized Deloitte's success, large accounting firms followed suit as they tried to swoop in to earn the business of enterprise-sized companies.
Other Big Four companies created their own ecosystems of accounting firm consulting. They realized that Deloitte's success came at just the right time, when the Great Recession hit, and Deloitte's move diversified its services. Companies struggled to keep up with changes in finance laws, and they needed help. No longer was Deloitte just dependent on handling complex accounting or financial strategies for larger companies. It branched out to be a consultant for companies of all sizes, which meant its accountants stayed busy year-round instead of during the first four months of the year.
Just Getting Started
The transformation from pure accounting to accounting firm consulting is just the beginning. More and more smaller companies that partner with the Big Four plug into their proprietary software. The software helps companies run as a business. Software can make recommendations for marketing, pricing strategies and growth patterns over short-term and long-term goals.
The difficulty that large accounting firms face is that their reputation precedes them. Firms are reluctant to hire them for consulting since they are mainly known as accounting firms. Smaller, more agile startups may have more expertise in marketing, financial growth and business strategies with their own market insights compared to the slow-moving, lumbering giants of accounting. If Deloitte's success is any indication with its 12 percent of the market share for accounting firm consulting, it's only a matter of time before more companies join the bandwagon.
Digital transformation stands to pick up the pace because investment in technology makes these digital tools less expensive. When prices came down, smaller firms could invest in the same types of digital tools that the Big Four already had. Computer software, cloud computing and connectivity help to level the playing field. Smaller firms may add consulting services to their repertoire once they have the tools to develop their own software for consulting. As more accounting processes become automated, consulting has to be an option for smaller firms that need to keep growing and add value to survive.
Accounting firm consulting is just one more way firms reach out to earn more customers and more business. Firms that learn to market themselves as such win the battle sooner rather than later when they expand their services over the competition.
Photo courtesy of Stuart Miles at FreeDigitalPhotos.net