By any measure, Deloitte Consulting's had a pretty good year. Even with a slowing economy, the firm grew at an 18 percent clip for the fiscal year ended May 31, and is forecasting low double-digit growth for this year. Consulting's editor-in-chief Joe Kornik sat down with Doug Lattner, Deloitte Consulting chairman and CEO, to discuss what lies ahead for the firm, the market and the industry. Consulting: So, May 31 wraps up a pretty good year.
Lattner: We've put together double-digit growth rates for the past four or five years, and we will again at the end of this fiscal year. After 18 percent growth, we're at $2.7 billion. I don't think it's sustainable for us to continue to grow at 18 or 19 percent, but we're still forecasting low double-digit growth next year.
Consulting: Is the more conservative forecast due to what's going on with the economy right now?
Lattner: I do think this slowdown will affect certain segments—financial services, homebuilding, and construction, to name a few. But even with an economic downturn, we're seeing an emphasis on performance improvement and a number of other areas that will continue to help us grow. I don't think this slowdown will be anything like it was in 2000, 2001 and 2002, when the overall consulting industry declined. All the forecasters are predicting a 3 percent to 5 percent increase on average for the year.
Consulting: Have you seen an impact to your business?
Lattner: Consulting lags the economy by two or three quarters so we haven't seen any impact of it yet, and I'm not sure we will. We have no indication from our clients that spending is down. Overall, our pipeline is strong and opportunities are there.
Consulting: What are some of those opportunities?
Lattner: We have a pretty good backlog going into next year in terms of sold engagements, but I think our advantage is our portfolio. We have 19 different industry sectors where we go to market. We're able to balance a little bit with respect to the different services we provide. The healthcare industry has a very big spend requirement on technology. I think technology spend will abate from what it was [a few years ago], but it will still be positive. But overall, technology will still be a big play for us. If people think that ERP is dead, it's not. In fact, what we're seeing is that the technology engagements are even larger that they were even five years ago; sometimes they get up to $100 million. We're doing well, but we can't rest on our laurels. That why were going through a strategy refresh right now.
Consulting: What does that 'strategy refresh' entail?
Lattner: I'm a firm believer that great organizations change before the times change. We've doubled our practice over the last four or five years, but we can't stand on that forever. So, I'm challenging our organization and asking what's the next level we can get to? We're taking a look at how we go to market, our process and what our business imperatives are. Internally, our talent agenda is a big priority for us, and it goes all the way from our women's initiative to our diversity program, which are both leading edge in the industry right now. Our attrition rate is down from 23 percent when I first took over about five years ago to about 16 percent today. That's a big shift, and I think it says we're doing something right.
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