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During the heyday of internet consultancies, Deloitte Consulting—like many of the old-line professional- services firms—waited patiently in the wings to regain the spotlight. Sure enough, when the dot-coms went into free fall, Deloitte reemerged with a vengeance, taking out full-page newspaper ads heralding its stability and strengths. Among them: almost 40 years of consecutive profitability, and the fact that it had been the fastest-growing major consultancy in 1999.
While “business headlines … have highlighted the precipitous decline in the share price of Internet consulting firm stocks,” the ads read, “Deloitte … has become the fourth-largest consulting firm by building on strength, stability and innovation.”
Clearly, one of Deloittes biggest strengths today is its e-business practice. By the end of 2000, it had completed more than 1,000 e-business engagements.
“Our goal is to be the No. 1 e-business consultant in the world,” says Deloitte CEO Douglas McCracken. “While others are looking inward, we have developed a leading-edge e-business practice, have continued to enhance our professional capabilities, and are focused on rewarding our people at all levels.”
Part of Deloitte Touche Tohmatsu (DTT), the giant international accounting and professional-services firm, Deloitte generated revenue of $5.4 billion last year, a 15 percent increase over 1999. More than one-fifth of that came from e-business. Meanwhile, the firm, which is frequently cited as one of the 100 best companies to work for in the United States, more than doubled the number of e-business practitioners on its payroll, going from about 2,500 in 1999 to an estimated 5,300.
The mass exodus from the dot-coms substantially bolstered its recruitment efforts in this area. In the period immediately following its self-congratulatory ad campaign last fall, the company received hundreds of résumés, says Cathy Benko, Deloittes global e-business practice leader.
Benko notes that Deloitte had been aggressively pursuing e-business more than two years ago. “The firm as a whole saw that e-business was more than just a trend,” she says. “We recognized that its actually a whole new playing field.” Benkos mantra: “E-business is the business.”
To become a major player in the e-business arena, Deloitte restructured itself, making all of its consultants pass a rigorous five-part e-certification program and reorganizing its practice around key e-business solutions such as sell-side, buy-side, inside, outside and B2B.
“We are doing nothing less than reinventing ourselves and creating the firm of the future—a full-service, client-focused global organization that is becoming the worldwide leader in delivering innovative business solutions and services to the e-economy,” says McCracken.
Last year, Deloitte, which operates in a mother ship/pod model, also created a number of new pods. Among them was Roundarch, a joint venture with BroadVision and WPP Group, one of the largest advertising and media-relations groups in the world. Combining brand marketing know-how, strategy and technology, Roundarch is geared toward helping clients build B2B and B2C capabilities. When Roundarch opened its doors, it already had 20 major clients, and Deloitte projected the startup would do $100 million last year. That has since proven optimistic. Reportedly, Roundarch generated about $45 million in 2000.
“We developed the mother ship/pod model about a year-and-a-half ago as part of our e-strategy and the notion of creating value networks and quickly getting access to capabilities and perspectives that werent in the firm,” McCracken explains. “Our belief was that one firm couldnt provide all of the perspective necessary, so creating partners and ventures would help bring those value networks together.”
Deloitte initially established a venture fund of $500 million and is still investing, McCracken says. Its most recent investment: Telispark Inc., which develops applications for wireless devices.
Another pod, Deloittes Accelerator unit, helps Fortune 500 and Global 1000 clients such as Cargill launch e-business spin-offs and “carve-outs” quickly. Recently, one of Deloittes multinational clients, a cement manufacturer, created a full-blown e-commerce spin-off in only three months.
More than three-quarters of Deloittes clients are major corporations, including Enron, Hewlett-Packard, Merrill Lynch, Microsoft and Nike. It does extensive business in financial services, health care, manufacturing, energy and the public sector.
Besides e-business, the firm also provides outsourcing, CRM, supply-chain management, among other solutions. But today its major focus is on Internet-based initiatives.
“E-business is still very strong,” says McCracken. “Also, mobile commerce is something thats very, very hot. I think were just beginning the e-revolution.”
Thousands of consultants and integrators hope hes right.