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Analysis

Business services M&A update: Q1 2018

While many see emerging technologies as a threat to human served jobs, businesses have seen the implementation of advanced tech systems work in complement to human workers and improve overall business processes. This business services M&A update 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 business to consumer (B2C) content marketing measurement systems1: The use of technology to relieve marketers of some of their more mundane duties is expected to bear fruit in 2018. Brands and agencies have been experimenting with using machine learning to process data and handle repetitive tasks so that their teams can focus on generating insightful and creative work. “Now that autonomous technologies are emerging to do the heavy lifting around data management and campaign execution, marketers will be freed up to return to creative, sparking a renaissance that’s informed by data and, perhaps, more meaningful than ever before,” said Amy Inlow, chief marketing officer of artificial intelligence (AI) marketing platform Albert.
  • Business process automation2: New technologies that have emerged over the past few years, including robotic process automation (RPA), have begun to impact the business process outsourcing (BPO) industry. RPA is slowly penetrating all industries and types of business processes due to the incremental cost savings, speed, and efficiency it provides. Growing businesses are able to avoid hiring large numbers of people for small tasks, such as processing insurance claims and data entry, which can be easily handled through automation. In 2018, automation will be a dominant trend and outsourcing companies will automate more processes to bring innovation to existing clients, improve productivity, and regain a labor cost advantage
  • Accounting firms dominate consulting market3: Since 2012, the big four accounting firms’ combined global revenue from consulting and other advisory work has risen 44 percent, compared with just three percent growth from auditing. The result is that the bulk of the firms’ revenue now comes from consulting and advisory, $56 billion last year, compared to $47 billion from auditing. Five years ago, auditing pulled in roughly the same amount—$46 billion—while consulting and advisory’s haul was only $39 billion.
  • AI and people are smarter together4: Leading companies increasingly recognize that AI and related technologies are most effective when they complement humans, not replace them. Amazon now has 100,000 robots in operation, which has shortened training for holiday workers to less than two days. Walmart recently deployed virtual reality technology to improve its in-store training and effectively simulate customer environments. Manufacturers such as Airbus and Nissan are finding ways to use collaborative robots, or “co-bots,” that work side by side with workers in factories. There is also growing recognition that AI tools require human oversight. Behind the scenes, major tech firms have tens of thousands of humans continuously watching, training, and improving their algorithms.

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References

1 “10 Trends that will shape marketing in 2018.” CMO. January 8, 2018.
2 “Business process outsourcing: 7 Trends to expect in 2018.” Time Doctor. January 2018.
3 “Did the big four auditors get $17 billion in revenue growth? Not from auditing.” Wall Street Journal. April 7, 2018.
4 “The rise of the social enterprise.” 2018 Deloitte Global Human Capital Trends. April 2018.

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