Big Six Turmoil

By Bruce Caldwell

hat's the potential impact on users of the impending consolidation among the Big Six consulting/accounting firms? Fewer choices, obviously. But there are other worries: What happens to your project if key consultants don't like the way a merger is going and quit their company? And, asks Ben Vettese, director of SAP applications at chemicals company Elf Atochem in Philadelphia, when two merger partners have different approaches to implementing enterprise applications, "what does that mean for the prospective customer?"

Though the answers to those questions won't be clear for a while, it's apparent that users have plenty to worry about, as the big-league consultants under go unprecedented turmoil. Barring intervention by government regulators, Ernst & Young will soon merge with KPMG Peat Marwick, and Price Waterhouse will merge with Coopers & Lybrand. That will make the Big Six into the Big Four. Meanwhile a third member of the elite, Andersen Worldwide, is publicly airing its dirty linen in a life-or-death struggle between its two units, Andersen Consulting and Arthur Andersen.

Avoiding Conflict
Reduced choice could cause problems-particularly when users want to hire more than one firm to avoid conflicts of interest. When pharmaceuticals maker Monsanto Corp. implemented SAP's R/3 suite, for instance, it hired the U.S. unit of Deloitte Touche Tohmatsu for most of the design and planning work. But for financial applications, Monsanto hired Ernst & Young, because Monsanto wanted to avoid any conflict of interest for the DTT unit, which was also Monsanto's auditor, says Bob Barrett, who headed the project as a Monsanto employee and now heads an IBM/Monsanto ERP S olutions Center.

Though the situation illustrates a common user concern, it should be noted that DTT is the only Big Six firm not undergoing an upheaval. That point will be stressed in a new ad campaign for DTT's Deloitte Consulting unit, says Stephen Sprinkle, a managing partner for the unit.

When merging firms have different methodologies for implementing SAP, it's important that prospective customers find out how the methodologies will be affected-because at some point, there's likely to be just one SAP methodology, says Linda Cohen, an analyst with Gartner Group Inc. She says Big Six customers should probe for signs of skittishness among consultants assigned to their projects, and ask what the consultants' employer is doing to retain key individuals.

The outcome of the dispute between Andersen Consulting and Arthur Andersen is even less clear. The rivalry between the two units of Andersen Worldwide-whose business has often overlapped-turned into open warfare last month. Andersen Consulting, ch arging breach of contract and irreconcilable differences, said it wanted its independence and filed an arbitration case with the International Chamber of Commerce in Paris.

Andersen Consulting hopes to recover some of the hundreds of millions of dollars it has given, as the more profitable unit, to Arthur Andersen over the years as part of a cost-sharing arrangement. But Arthur Andersen is seeking 150% of Andersen Consulting's roughly $6 billion revenue, all rights to the Andersen name, and all technologies and methodologies developed by Andersen Consulting. Estimates for the date of the arbitration ruling range from months to years.

Price Waterhouse and Coopers & Lybrand expect a merger transition of about 18 months, although it could take three years to derive all the benefits, says Colin Price, Price Waterhouse's co-leader of the transition team. Price says the firms aim to select a new name, logo, and unified project teams by July.

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