EY sets out Technology strategy for continued advisory momentum
PAC recently attended the Tech Advisory Summit in New York where EY provided an update on its advisory business and showcased its digital capabilities. ConnectedAdvisory is EY's response to the global surge in demand for digital transformation partners, by which it aims to catch the wave of new digital deals and push EY advisory beyond its current double digit growth.
EY's advisory business traditionally had a swing towards pure management consulting services but over the past several years EY boosted its IT capabilities as well, mostly around applications and infrastructure project services, according to PAC’s segmentation.
EY transformed into a fully integrated global business by merging capabilities of all business units and incorporating digital technology as well as a digital mindset across all of them. This is a quite different approach to digital offerings from most of the SIs and some of remaining Big 4s, which created separate "Digital" business units instead. Such move might play well for EY as Digtial is becoming the new normal, and customers are expecting Digital from every IT deal.
EY also integrated its offerings, and structured it to provide streamlined and unified EY experience to the customers as well as access to its IP and knowledge, for which EY execs believe to be one of the most powerful pros when opting in for EY's proposals. The offering is tailored around the Synapse platform that features a set of infrastructure and applications services in a cloud environment, built around technologies of its core partners SAP, Microsoft, IBM and GE.
The company is also making big bets on technology both with strategic acquisitions and investments into its internal capabilities. As the latter is of critical importance for EY's long term strategy, it established a network of EY Wavespace innovation hubs to bring together EY's long list of clients on the one side and the ecosystems of acedemia, start-ups, analyst firms and alliances, on the other. Five key emerging technology areas for EY are IoT, blockchain, AI, RPA and 3D printing, for which it has appointed Global Leads and already has offerings in-place.
In IoT EY is working with a global airline on a predictive maintenance application helping it crunch the sensor data and reduce the amount of time needed for operational plane maintenance processes. Even though Blockchain as a technology is in early stage of maturity, EY developed its pioneering offering Ops Chain, a blockchain based solution that streamlines supply chain management by enabling digital contracts, and allowing better transparency into related information about logistics, pricing and payments.
In RPA, EY focuses on CPG, financial services, and life sciences customers, looking to deliver cost cutting of up to 45%. EY's AI activities are mostly related to customer facing value propositions such as chatbots, but efforts are made in the modernization of retail analytics as well. EY's Cyber practice is one of the necessary pillars for the future of the advisory thanks to growing cyber threats and regulatory requirements such as GDPR. This practice has 8,000 employees mostly working on assessments and consulting around cyber readiness of the clients, whereas the focus for the future will be a growing managed security services (MSSP) offering which will deal with implementations and management of cyber solutions.
It is also important to note that EY is already working on combining the aforementioned technologies in a push to unlock the additional value for the customer and enable both topline and bottom line growth. For example by fusing the Blockchain and RPA together, a viable business process automation can be achieved and applications such as cargo that insures itself will become reality. Another good example of joint efforts is by infusing AI into IoT solutions to enable automatic quality management which is one of EY's key offerings in IoT.
PAC believes EY is a strong contender in the digital transformation market with its advisory revenue of $8.1 billion and close to 54,000 workforce (with 32,000 located in global delivery centers in India serving the whole of EY), despite being smaller in scale than most of its SI peers in terms of IT delivery. However, even though EY is in a position to play the labor arbitrage game and chase large scale outsourcing deals, it's strategy is not to do it necessarily.
PAC believes this is right for several reasons. Firstly, its current strategy is aligned with the needs of the market in the era of digital transformation. This means that being comfortable with smaller deals that are based on innovation and provide quick time to value for the clients will be important for the growth on the long run.
Then, the strategy also aligns with its very decentralized and extensive geographical office presence throughout the world in which it can build up digital capabilities locally. This is something that none of the SIs can achieve at the moment, at least not to the same extent. Moreover with access to boardrooms of the world's largest accounts EY will be in position to build its digital capabilities even further, and PAC will keep track on progress.