Deloitte positions for growth in 2024 in cautious start
As hackers look to take advantage of AI, the accounting and advisory major has bought a cybersecurity company as it prepares for a cautious start to 2024.
Deloitte Australia boss Adam Powick has called for certainty around the consulting sector, as the professional services firm prepares for the handover of its latest addition, cybersecurity firm ParaFlare.
The deal sees 66 staff from ParaFlare join Deloitte, including its chief executive Adam McCarthy and chief technology officer Frank Santucci, who will join the firm as partners.
Mr Powick said the ParaFlare deal was a “stake in the ground for 2024” in a sign of the priorities for Deloitte.
“We are growth oriented and prepared to invest in the future,” Mr Powick said.
“Our overall strategy is to invest in domains that are important and relevant for our clients over the short and long term.”
The cybersecurity acquisition comes in the wake of a torrid year for corporate Australia, with hacks and leaks damaging several major brands.
Mr Powick said there was a growing demand from clients for expertise in cybersecurity, as well as other practice areas including generative AI, workforce transformation, and climate reporting and transition.
“2024 will likely bring a range of considerations for business leaders. If I had to choose a focus word, it would be productivity,” he said.
“The economy will continue to be quite variable for a period of time, although we’re forecasting greater growth opportunity in the back end of this calendar year, when M&A activity and investments are likely to start to flow.”
“Within this environment, we see opportunities for growth for organisations that are prepared to invest in a focused and disciplined way.”
The Big Four consulting firms enter 2024 after a turbulent 2023, after the sector was subject to an unprecedented level of public scrutiny as multiple parliamentary committees, on both state and federal levels, unearthed dirty laundry.
This came in the wake of revelations PwC Australia misused confidential government information to boost its tax business, triggering a wave of investigations and government action.
The scandal surrounding PwC came as the Albanese government looked to scale back the use of consultants within the public service, after a boom during the Coalition’s tenure in power.
PwC was forced to amputate its government consulting arm in a deal with private equity players Allegro Funds amid a collapse in new work.
Deloitte has avoided much of the collateral damage, but Mr Powick stressed the firm’s leadership “know we’re not perfect”.
“We also acutely recognise we’re a part of a profession and that anything which impacts the profession impacts us,” he said.
“In this world, there is no room for complacency, and we have a responsibility to carry ourselves appropriately every single day.”
Mr Powick said Deloitte “still see a fair bit of work and consultation” in the year ahead, flowing from the range of inquiries.
“But what we hope at the end of the day is we are clear on the issues we are seeking to address and achieve an outcome that is thoughtful and applied consistently across the whole profession,” he said.
“This would include considerations such as governance, transparency and reporting, and a fit for purpose regulatory framework.”
The government has responded to the PwC matters, boosting the powers of regulators and putting in place procurement policies to punish firms caught doing the wrong thing.
Penalties for firms advisers and firms who promote tax exploitation schemes were also upped from $7.8m to a whopping $780m, alongside a raft of other changes.
Mr Powick said Deloitte supported a number of the government’s initial moves and responses.
“Moving forward, we believe there is an opportunity to clarify regulatory frameworks and drive greater consistency of reporting and governance expectations,” he said.
“At Deloitte, we are open to constructively participating in this review and change process and implementing any recommended changes or enhancements to the way we operate as a firm.”
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