In a rare move, A.T. Kearney buys a data analytics consultancy
Global management consulting firm A.T. Kearney has bought Cervello, an analytics and data management consultancy with offices in the US, the UK and India. Following integration, the acquired company will operate as ‘Cervello, an A.T. Kearney company’.
The purchase comes at a time when strategy consulting firms – with 3,500 employees A.T. Kearney is among the globe’s ten largest firms specialized in strategy & operations – are investing heavily in their digital footprint amid a boom in digital consulting.
McKinsey for instance bought QuantumBlack a while back, and more recently Oliver Wyman bolted-on Draw in the UK, and Bain & Company picked up FRWD, a US-based digital player in the marketing realm.
“Winning with data, that is what it’s all about,” explained Alex Liu, global managing partner and chairman of A.T. Kearney. Founded in 2009, and headquartered in the US, Cervello is regarded a frontrunner in the business analytics space. The company works at the convergence of digital strategy, enterprise performance management, data management, business intelligence, and CRM to help clients gain insights that provide direction to business and functional strategies.
Combined with A.T. Kearney’s management consulting expertise, “Cervello’s team of data engineers, data scientists, and developers will work closely with A.T. Kearney client service teams to power client performance improvement and transformation programs,” said Liu.
The chief executive, who took over from the Dutchman Johan Aurik in May last year, added that Cervello will in addition provide A.T. Kearney with new capacities in the area of big data, cloud, data platforms, applications development and technology-led innovation. “This will help us develop more robust tools and customized solutions for our clients’ most difficult problems.” By integrating Cervello’s solutions and managed services offering into its propositions, Liu expects to be able to provide a more end-to-end offering, while tapping into new opportunities.
From consulting to solutions and managed services
Extending portfolios into solutions and further down the line managed services is a popular topic in consulting boardrooms. Consultants such as A.T. Kearney are typically engaged for shorter assignments, often on strategy work or to support complex transformations. While fees can be lucrative, the projects tend to be short and finite, meaning that when consultants roll-off, they are faced with the challenge of having to find new revenue streams. Integrating “leave-behind” solutions into their package allows them to not only sustain value-delivery to clients long after the assignment has been completed (nurturing a relationship), but also provides for a more steady, albeit lower, flow of income.
Strategic consultancy McKinsey & Company is well known for the development of its solutions business (operating as ‘McKinsey Solutions’), with BearingPoint and Mercer other examples of consultancies that have successfully developed solutions that now hold a market-leading position in a niche – BearingPoint’s Abacus is a leader in regulatory compliance within financial services, and Mercer’s Thomsons Online is top of mind among many HR leaders for compensation & benefits planning.
The integration will see Cervello’s around 120 employees in Boston, New York, Dallas, London and Bengaluru join A.T. Kearney. Scot MacGillivray, CEO of Cervello, remarked: “All of us at Cervello are excited with the news. Joining forces with A.T. Kearney will exponentially increase our business impact to our current and future clients. First, we will dramatically increase our global reach. Second, we see our strengths as blending remarkably well – our technology expertise will embed seamlessly within A.T. Kearney’s deep industry expertise. Third, our clients see the value and urgency in this combination of strengths.”
According to both Liu and MacGillivray, the two companies share a similar approach, anchored on a passion for delivering tangible results and a culture that builds on transparency, collaboration and openness.
A.T. Kearney and M&A
Turning to M&A as a means for growth is a rare move for A.T. Kearney. The last formally announced acquisition the firm closed is that of Quintel in the Netherlands in 2011, and way back, in the 90's, the consultancy bolstered its position in France with the addition of Telesis and in Latin America with Keisai Asociados.
In 2010 A.T. Kearney came close to merging with Booz & Company, however the deal feel through reportedly due to a lack of cultural fit. Four years later, Booz was absorbed by PwC, and today operates as Strategy&, PwC’s strategy consulting subsidiary.
