EY Advisory continues to strengthen its technology capabilities
At their recent Technology Analyst Summit held in Toronto, in one of their waveSpace innovation hubs, EY provided an update on their technology vision, strategy and digital capabilities, including a range of actual customer engagements. Coming from a mainly management consulting background, EY has made significant progress in boosting its IT capabilities. The management consulting approach remains visible even in the technology-related projects, and the overall goal, as set out before, is to "support clients to achieve their technology-enabled business transformation objectives". As one of the EY executives mentioned, they “are looking at the balance sheets of the client” even when they speak about technology.
EY's Advisory Business, i.e. the management and IT consulting part of EY (and distinct from the audit and tax operations), continues to be set for growth and is clearly focused on innovation. EY claims to have some 30,000 technology resources now, but also works with an ecosystem of clients, partners, start-ups and academia to drive business outcome-focused innovation. Furthermore, EY has been aggressively acquiring tech companies. Over the past year alone, EY made 9 acquisitions, adding some 600 people and $900m in revenues. Acquisitions include Kivalahr, Brightree, Etventure, Applix, Sonoma, etc. More are certain to come... (subscribers to PAC's SITSI research can track past and future acquisitions through our ongoing M&A deal tracker).
Industry-specific solutions play an important role and EY is clearly aiming to enhance their professional services offering with IP (i.e. technology 'products') including platforms (in some cases co-developed with clients), as-a-service offerings, and new methods and tools. An example is InsurWave, a blockchain-enabled insurance platform built together with a consortium of maritime insurance companies. Another example is a blockchain-based platform for content rights and royalties management, co-created with Microsoft to streamline the royalties payment process for XBox (or other video games/digital content). It ensures confidentiality, creates near real-time visibility for publishers, and significantly speeds up statement reconciliation, approvals and auditing.
Intelligent automation, increasingly coupled with AI, is another focus area for EY. Here the company has use cases in the financial services sector (e.g. automation of the credit card replacement process or of mortgage property insurance admin processes), but also, for example, in the oil & gas sector, where it helped a large US-based energy provider to centralize all available data in one place (MS Azure-based) and then build new services around this, incl. analytics (e.g. customized data visualizations that allow predictive forecasting for sulfur explorations in an oil well).
IoT is another major activity, and EY presented a few use cases to the analysts. The preoccupation with the bottom line is again visible, with the cases having a strong financial impact for customers. The case of Velon, a professional sports association, shows how data gathered from sensors can be transformed into value and a marketable product, with the opportunity to generate new revenue streams. Another case from the oil & gas industry illustrated the benefits of IoT and analytics in the identification and prevention of production failures, which brings valuable savings to customers. The IoT solutions in conjunction with AI, analytics and EY’s process and industry expertise are expected to generate significant business in the next few years.
The business application integration area is getting stronger and stronger, with valuable own IP built on top of platforms such as SAP or Microsoft, two key software partners EY works with. Recently, EY announced an automated tool for migrating to S/4 HANA. This intelligent, automation-based migration approach also implies that processes can be redesigned to take advantage of new functionalities available in S/4, while considerably reducing the costs and time required, which is a worry for many companies. As approximately 70% of EY's clients run SAP systems, there is massive potential for further growth in this area, especially by pushing the add-ons and IP developed by EY based on their comprehensive expertise in various industries.
So what is EY's competitive advantage and differentiator as digital transformation partner compared to its peers, some of which are much bigger? Coming from a management consulting background, EY clearly approaches digital transformation from a business angle, starting with customers' balance sheet problems, rather than from a technology angle (as many SI companies do). Its long-established, boardroom-level relationships (gained from professional services engagements) give them access to the key stakeholders for digital transformation initiatives. Furthermore, EY's accounting, tax and audit expertise forms a strong complement to its industry and technology know-how. Finally, change management skills are an important asset when accompanying clients on their digital transformation journey. Equally important is the fact that EY does not have a legacy business in AM and/or outsourcing that it has to protect and transform. At the same time, it boasts a broad geographical presence and a sizeable global delivery organization.
In PAC's view, EY - though still somewhat smaller than the likes of Accenture, IBM or even Deloitte - is a strong contender in the market for digital transformation advisory. If it continues to focus on its specific capabilities and differentiators, it will certainly stake its claim successfully.