Accenture cracks $200 million in New Zealand amid headwinds
The New Zealand branch of global professional services firm Accenture has hit the $200 million revenue mark, a staggering ~$135 million increase over just the past two years.
The professional services behemoth that is Accenture has reached another milestone en route to total worldwide domination, cracking the $200 million revenue mark in New Zealand for its 2022 financial year. While the exceptional local growth has been driven in part by its 2020 purchase of home-grown SAP consultancy Zag, there are some warning signs of slower growth on the horizon, a potential harbinger for the industry at large.
“A huge thank you to the team for putting in the Mahi, creating waves and using your expertise to create impact,” stated former Zag CEO and now Accenture New Zealand country managing director Nick Mulcahy. “The last 12 months have seen us continue on this upward growth trajectory – tackling an array of interesting and innovative projects, working with partners to deliver top tier solutions, and expanding our network of people across New Zealand.”
Since its founding at the turn of the century as an independent spin-out from Arthur Andersen, Accenture has grown into a business generating in excess of $60 billion in global revenues to contend for the title of the world’s biggest professional services firm. That figure has more than doubled in just the past decade, on the back of an endless wave of acquisitions and moves into new markets such as through its digital agency Accenture Song.
While a comparative drop in the ocean, the firm’s New Zealand branch has followed a similar trajectory, jumping from revenues of $66 million just two years ago, when it purchased Wellington-headquartered SAP and cloud consultancy Zag for a reported $45 million, to above $200 million over its past financial year to September. The bulk of those revenues however, more than 75 percent worth, stem from its local consulting business.
Such ratios wouldn’t ordinarily be a cause for concern. The Big Four, and Accenture, have after all swollen to unprecedented sizes on the back of their consulting lines. As just one example, KPMG, the smallest of the Big Four, recently posted record global revenues of $35 billion, driven by an almost 20 percent boost to its advisory line. Like its traditional accounting and audit competitors, business consulting now accounts for the majority of their revenues.
Yet, in its recent first quarter results, for which Accenture was up by another 5 percent overall for its corresponding 2021 quarter, its consulting revenues were stagnant – enough so for the NYSE-listed firm to issue a forecast warning. It seems ongoing economic uncertainty amid rising global inflation is seeing the postponement of company spending on consulting projects following the post-pandemic IT and digital transformation boom.
The duration of the slowdown and its impact on individual smaller markets such as New Zealand remains unknown. Globally, Accenture expects just a slight, short-term consulting downturn as companies which focus to cost resilience. CEO Julie Sweet also remains defiant, stating during an earnings call; “I just want to remind everyone that this is exactly the environment that you see the strength of Accenture. It is because we are so broadly diverse.”
