Round table

Analysis

Business services M&A update: Q4 2017

With artificial intelligence becoming a necessity for businesses to stay ahead of the curve, technologies such as machine learning, IT systems, and other tools, will help drive outcome based approaches not only for external clients, but internal clients as well. This 'Business services M&A update: Q4 2017' provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the business services industry.

Business services trends

  • Leveraging B2C content marketing measurement systems1: Machine learning, which is a type of artificial intelligence (AI) that allows software applications to improve accuracy when predicting outcomes, is becoming an increasingly important tool for marketers to be able quantify and then track key performance indicators in order to optimize the effectiveness of a content marketing initiative. Forrester Research recommends marketers structure measurement and reporting according to operational roles and investigating digital full attribution to transparently link activities to outcomes. In 2018, marketers will continue to design marketing campaigns that apply machine learning to purchase path optimization.
  • Artificial intelligence’s impact on business process outsourcing2: Markets are becoming increasingly dynamic and many companies with rigid business processes are now finding themselves at a distinct disadvantage. To become more agile, many companies have been migrating from rules based systems to more flexible, outcome-driven approaches. Additionally, the use of AI technologies—a combination of IT systems, tools, and methods that enables machines to sense, comprehend, act, and learn—is fueling this transition phase. The traditional approach of business process outsourcing, being driven by service level agreements, is changing and companies may have to rethink how to structure relationships. Many companies will continue to move toward outcome-based approaches with agreements based on the business value created by the work.
  • US expansion in financial regulation and healthcare expected to drive growth in 20183: Financial institutions, most of which are located in the United States, are expected to represent the consulting industry's largest growth market over the next five years due to the continued implementation of new financial regulations. Banks and other financial institutions are expected to increase investment in consultants and other expert services to ensure regulatory compliance and better manage the wide range of operations that exist under their brand names. Additionally, the healthcare market is expected to experience strong growth over the next five years as uncertainty of the future of the Patient Protection and Affordable Care Act causes healthcare companies to seek out consultants to help plan for different potential outcomes.
  • Strategic onboarding for new hires can help drive results4: Organizations are starting to look at the new hire onboarding process as a complete experience. In fact, onboarding should begin from the moment the candidate says, “Yes.” That means personalizing the offer letter and pre-boarding experience and creating more than a task checklist about workspaces, computers, and paperwork. Strategic onboarding rapidly engages enthusiastic new hires into the life of the organization and keeps them continuously engaged with every career move or transition. Gallup’s State of the American Workforce 2017 says: “Engaged employees are more present and productive; they are more attuned to the needs of customers; and they are more observant of processes, standards, and systems. When taken together, the behaviors of highly engaged business units result in 21 percent greater profitability.”

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References

1 “Measurement powers content marketing success.” Forrester Research. January 3, 2018.
2 “Using AI to succeed in the new business process era.” Accenture. January 3, 2018.
3 “Global management consulting industry outlook.” IBISWorld. January 3, 2018.
4 “Industry insight: Strategic onboarding—Help new hires belong and deliver results.” Training Magazine. January 3, 2018.

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