1. Genealogy of Consulting Firms
Genealogy of the Big 8 Consulting Firms
11/01/2005
Genealogy of Consulting Firms
Phil Osborn, Principle
IT Management Consultants
w/editorial assistance from
BCIS 4690 Class; Summer, 2008
June, 2008
BCIS 4690
BCIS 5700

2. 50 Bonus Pts Due: 7/8/2010: May be sent by Email to me. Requirements:
1. Update the Consulting History through July 2010.
A. Update These Slides; Add as many new slides as needed to complete this presentation.
B. Include a 1000 word narrative summarizing the significant changes
C. Include an annotated Bibliography to substantiate the events noted.
June, 2008
BCIS 4690

3. Preview Timeline Major Players in Accounting Industry
Beginning of Consulting
Big 8 Formed Companies
Main Movements
Intermediate Mergers
Big 4 Players
Ernst and Young
Deloitte Touche Tohmastsu
KPMG
Price Waterhouse Coopers
IT Consulting Players
IBM (Price Waterhouse Coopers)
Cap Gemini (Ernst & Young)
Accenture (Arthur Anderson)
Bearing Point (KPMG)
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BCIS 4690

4. Timeline Left out the sale/exit of Big 8 consulting businesses
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BCIS 4690

5. “The Birth of Management Consulting”
A.T. Kearney
Orginially Kearney & MicKinsey in 1922
A. Thomas Kearney kept the name after McKinsey left to be CEO of Marshall Fields
McKinsey starts with there beginning after A.T. Kearney, makes it appear as if they were first.
June, 2008
BCIS 4690

6. The Big 8 [circa 1970] Arthur Anderson
1913- Founded as by as Andersen, DeLany & Co
1918- Name changed to Arthur Andersen & Co
2001- Andersen consulting forced to change name to Accenture
2002-Convicted for shredding documents related to its audit of Enron.
2005- Conviction overturned by Supreme Court due to flaws in the jury instructions
Coopers & Lybrand
1957 merger of Cooper Brothers & Co; Lybrand, Ross Bros & Montgomery and a Canadian firm McDonald, Currie and Co
1998 merged in with Price Waterhouse to form PricewaterhouseCoopers.
June, 2008
BCIS 4690

7. The Big 8 Deloitte Haskins & Sells (Haskins & Sells)
1845- Deloitte founded by William Deloitte
1952-Agreement reached to merge the businesses of Deloitte, Plender, Griffiths & Company and Haskins & Sells in the U.S., under the name Deloitte Haskins & Sells.
1992- Coopers & Lybrand Deloitte became Coopers & Lybrand
Deloitte Haskins & Sells was a predecessor firm of Coopers and Lybrand UK and Deloitte Touche Tohmatsu
Ernst & Whinney (Ernst & Ernst)
1903- A.C. Ernst in 1903, joined with his brother, Theodore, to start Ernst & Ernst. Accounting firm
Whinney, Smith & Whinney had been closely allied with Ernst & Ernst since the 1940s, and in 1979 Whinney Murray, Ernst & Ernst, and Turquands Barton Mayhew joined together as Ernst & Whinney, creating the fourth largest accountancy firm in the world.
June, 2008
BCIS 4690

8. The Big 8 Peat, Marwick, Mitchell Touche Ross
Robert Fletcher establishes accountancy firm which later becomes Peat Marwick Mitchell
1925-  Peat and Marwick Mitchell & Co join to create a transatlantic firm
Touche Ross
1960-Touche, Niven, Bailey & Smart merges with George Touche & Co. (Britain) and Ross, Touche & Co. (Canada) to form Touche, Ross, Bailey & Smart
1969- Adoption of the name Touche Ross & Co., mergers completed with more than 50 other firms in the U.S. and formal associations created with national firms in 55 countries.
1975- Agreement reached with Tohmatsu Awoki & Co into Touche Ross
June, 2008
BCIS 4690

9. The Big 8 Price Waterhouse Arthur Young
Samuel Lowe Price creates firm in U.K.
Samuel Price partners with William Holyland and Edwin Waterhouse.
Price Waterhouse and Coopers & Lybrand announce plans for a global merger and integration.
Price Waterhouse and Coopers & Lybrand complete a global merger and the name of the new firm is PricewaterhouseCoopers
Arthur Young
1906 Arthur Young & Company was set up in Chicago
1989 Ernst & Whinney the fourth largest accountancy firm in the world merged with the then number five, Arthur Young, to create Ernst & Young
June, 2008
BCIS 4690

10. Primary Movements
Equity Funding Scandal (1973) precipitated computer audit practices
Saving and Loan Crisis (Started in 1980 fell 1988)
Y2K January 1, 2000
The Enron Scandal of 2002 brought to light problems in accounting auditing and was the precursor of the fall of Arthur Anderson the companies primary auditing firm (Filed Bankruptcy in November 2002)
Sarbanes Oxley Effective July 30, 2002
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11. The 3 Intermediate Mergers
Three Mergers
KPMG Peat Marwick
Ernst & Young
Deloitte & Touche
The three holdouts (only room for two)
Anderson Worldwide
Coopers & Lybrand
Price Waterhouse
June, 2008
BCIS 4690

12. Big 4 Ernst and Young Deloitte Touche Tohmastsu KPMG
Price Waterhouse Coopers
June, 2008
BCIS 4690

13. Ernst & Young 1989- Two biggest accounting firms merge
Note: Slogan from E&W
1989- Two biggest accounting firms merge
Arthur & Young & Co and Ernst & Whinney
1996- Consulting sector splits from management Service Activities
2001- Major take over of tax consultants
2003- Audit firm “Swaelen & Co” joins Ernst & Young
June, 2008
BCIS 4690

14. Deloitte Touche Tohmastsu
1952-Agreement reached to merge the businesses of Deloitte, Plender, Griffiths & Company and Haskins & Sells in the U.S., under the name Deloitte Haskins & Sells.
1952- Nobuzo Tohmatsu qualifies as a certified public accountant in Japan and becomes a partner in a foreign affiliated accounting firm.
1972- Touche Ross Chairman Robert Trueblood chairs a committee that leads to the establishment of the Financial Accounting Standards Board — the FASB.
1990- Merger that creates Deloitte & Touche.
1993- International firm is named Deloitte Touche Tohmatsu.
June, 2008
BCIS 4690

15. KPMG 1876- Robert and Sydney Stpkes establish Stokes Firm
1987- Firm becomes part of firm accountancy mega-merger
2000- Consulting wing becomes an independent firm
2002- Merger lead to enlargement of firm
June, 2008
BCIS 4690

16. PriceWaterhouseCoopers
1849- Founded in London
1890- New York office opened
1998- Formed from merger between Price Waterhouse and Coopers & Lybrand
1990- coopers & Lybrand merged with Deloitte Haskins & Sells in the United Kingdom
June, 2008
BCIS 4690

17. IT Consulting Players IBM (Price Waterhouse Coopers)
No merger between Arthur Anderson and Price Waterhouse due to cultural differences
Cap Gemini (Ernst & Young)
Grew out of services offering
Accenture (Arthur Anderson)
Faced legal challenges after Enron
Bearing Point (KPMG)
No deal when it tried to joint venture with CISCO
June, 2008
BCIS 4690

18. Conclusion Consulting opened new industry
Industry movements lead to mergers
IT needs own consulting area
Driven by regulatory acts
Big IT Consulting is captive to IT product vendors and outsourcers, no longer independent
June, 2008
BCIS 4690