Deloitte, WorleyParsons deal signals professional services shift

Accounting firm Deloitte and engineering firm WorleyParsons will introduce each other to existing clients as well as bid for new work together, under a joint-venture arrangement that signals a big shift in the provision of professional services.

The new relationship the two firms disclosed on Wednesday, which has been operating as a pilot project since May, is the largest to date and the third, after similar arrangements between ASX-listed Worley and Deloitte’s operations in Canada and South Africa. It is one attempt to meet the growing need of all professional services firms to find new clients and package skills and offerings to clients that differentiate them from rivals.

It is a natural match of the complementary skills the two organisations have to offer, Deloitte Australia chief executive Giam Swiegers told BRW.

“Professional services are changing and changing very quickly,” said Swiegers, who heads Deloitte’s global response to disruption in professional services.

“It has opened an array of threats and opportunities to organisations. The far more exciting part is how do we make the most of disruption.”

Professional services are changing and changing very quickly

It remains unclear how the arrangement will work in practice and to what extent the collaboration between the two will be exclusive of other players among the so-called Big Four accounting firms or other engineering firms. Swiegers declined to reveal details of work the two did during the pilot phase.

Still, the move is a way for Deloitte to make money from the growing number of gas development projects in the region.

Getting into gas

“It gives us access to large first-tier oil & gas companies,” said Dennis Krallis, the Deloitte partner responsible for the alliance. “We’re specifically interested in the gas boom in Australia and getting involved in those large projects coming on stream in coming years.”

WorleyParsons, for its part – along with the Evans & Peck its infrastructure advisory firm it acquired in 2010 – will be able to offer its project management services and core engineering services to a wider range of clients, an imperative given the slowdown in new mining projects.

“Even though WorleyParsons and Evans & Peck will provide the alliance with specialist advisory services, we don’t intend imitating the financial, accounting and advisory services of Deloitte, and conversely nor does Deloitte intend building the engineering services that WorleyParsons has developed over more than 30 years – we’ve agreed to team up,” WorleyParsons Group Managing Director responsible for the alliance David Steele said in a statement.

Interesting partner choice

The fact Deloitte has chosen to partner with a project engineering firm like WorleyParsons, which typically funds construction projects off its own balance sheet and makes income from the longer-term provision of ongoing services, rather than with a traditional engineering consultancy that makes money by charging for time, such as AECOM, SKM or Aurecon, has been described as ‘interesting’.

“It’s very interesting move,” said Tristan Forrester, the director of professions at consultancy Beaton Research & Consulting. “It’s very interesting in that they’ve chosen a firm like WorleyParsons rather than one of the more traditional consulting firms in the consulting engineering space. That tells something about the competitiveness that is in between those two types of firms.”

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