Tuesday, December 26, 2017

Business: Consultants Increasingly Want Agency Action

For management consultancies trying to be agencies, 2018 is the year they’ll have to prove they can do it.
“Next year is the year we’re focusing strongly on organic growth that is in part seeded by some of the acquisitions we’ve made around the globe,” said Brian Whipple, CEO of Accenture Interactive, which snapped up 14 agencies globally in the past five years.
Management consultants have been creeping in on agency turf for a while now, spending a lot on acquisitions. The biggest player is Accenture Interactive, but others aren’t far behind. Deloitte Digital acquired creative agency Heat in 2016, while IBM’s acquisition of Resource/Ammirati has now resulted in a 36-studio holding agency called IBM iX.
In 2017, consulting firms started a sometimes painful process of integrating those agencies into their existing operations. Next year, the pressure will be on to prove the integrations panned out.
When we buy a company, their destination is [Accenture Interactive],” Whipple said. “They might keep a brand identity for a transition, but the management team is emotionally and work-wise strategically signed up. If they wanted a founders’ culture, they can go to a holding company. Our mission is never to grow that business as standalone.”
Meanwhile, for agencies like Hill Holliday and Ogilvy, which have moved in on consulting companies’ turf, next year is the time to prove they can fight back.
Now, consultants are adding design, user experience and customer experience projects to their existing offerings. Traditionally, UX or creative projects were the domain of agencies, while consultancies used to do supply-chain management, information technology or tech-related work.
There have been indications that the pitch is working. Deloitte connected its win of LG’s work to its purchase of Heat; Accenture has won duties for Maserati. Deloitte also won pizza brand Papa Murphy’s, which needed to figure out back-end development that Deloitte Digital could handle, while Heat could take care of creative.

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