Extracts of Pierre Briand's interview to Source Global Research

Source Global Research: How did the consulting market perform in Australia in 2023?
Not so well, mainly due to the “tax scandal”. This led to the government becoming hesitant about giving work to large consulting firms. Public sector consulting has been on hold since then, with all Big Four firms, and Accenture, losing significant work. This has had a dramatic effect on public sector consulting in general. The government has only started redistributing work recently, and it’s likely that smaller Tier 2 or Tier 3 firms will be the winners.

Another impact is the economic slowdown and uncertainty. This has meant that many corporates have either delayed or stopped projects.

Overall, the consulting sector suffered last year. Marketing and digital suffered a little bit. But IT, data & analytics, and AI didn’t suffer much.

It’s not been great for M&A, but I think the worst is behind us now. Tier 2 and Tier 3 firms are repositioning, and one benefit I see from this is these firms buying each other, merging, and making small acquisitions.

Source Global Research: Is defence a bright spot in the consulting market in Australia, with AUKUS?
Yes, and not just with AUKUS, but also with Japan. The defence sector is one sector which has been doing extremely well in Australia. Linked to this is cybersecurity and artificial intelligence. It’s not only about weaponry needs, but also infrastructure and recruitment, etc.

Source Global Research: Do you think we’re seeing a long-term trend of the government being less dependent on consulting?
I definitely don’t think it’s a long-term trend. If the smaller Tier 2 and Tier 3 firms do win this time, it might be harder for the bigger firms to come back in. I would bet, though, that the Big Four will come back into play in a few years’ time. It’s more of a cycle than a long-term trend.

Source Global Research: Are there any trends you see emerging in the Australia market?
AI and data & analytics are big trends in consulting firms. We can’t see much [of this] in M&A right now, but everybody is talking about it. People talk lots about ESG and sustainability, perhaps for political reasons, but there’s not much happening yet.

Source Global Research: Do you think you’ll see an uptick in M&A activity this year?
Yes, I expect more M&A opportunities for a few reasons. There’s still a lack of talent in Australia, and M&A is a huge solution to this. There are also plenty of buyers with plenty of money. The third reason is that, when you’re a large corporate with a slowing revenue but belief in the market, you buy the growth that you can’t deliver yourself. The fourth reason is that some macroeconomic issues will disappear in the second half of the year.

Overall, I am positive about 2024. I think there is plenty to come within the next 12 months.