The business press has been buzzing today with the news of a potential merger between AT Kearney and Booz and Company. As a Friday research assignment, we decided to do a bit of homework on the size and background of both firms. This post contains the highlights from our research as well as our high-level analysis of what a merged firm would mean for the procurement, sourcing and operations consulting landscape. If we take 2009 ranking numbers from Careers in Business Research, AT Kearney ranked 13th overall in terms of revenue with a revenue per consultant rank of 6 (i.e., the annual revenue per consultant). Booz and Co. ranked 11th for revenue and 8th in revenue per consultant. AT Kearney had roughly $785 million in revenue in 2008 and an average revenue per consultant of $413,158, compared with Booz's estimated $1 billion in revenue and $312,500 per consultant rank.
According to AT Kearney's website, the firm has 2,700 employees worldwide, including 1,900 billable consultants "who have broad industry experience and come from leading business schools" compared with Booz's 3,200 consultants (this number does not count the now split-off government consulting business, Booz Allen & Hamilton). ChicagoBreakingBusines.com suggests that ATK's revenue fell from $900 million in prior years to the above quoted $785 million. Consulting Magazine suggests "a combination of the two stalwarts would create the profession's third largest consultancy with some 6,000 employees and close to $2 billion in annual revenue."
We also glanced at LinkedIn and found that AT Kearney's line-employees are broken down in the following ways: 19% manager, 16% associate, 10% principal, 9% consultant and 6% business analyst. This compares with what appears to be even more of a pyramid model of Booz with 23% associate, 16% senior associate, 12% principal, 10% consultant and 8% senior consultant breakdowns.
These numbers only tell part of the story. For example, in the procurement and supply chain space, AT Kearney has a separate division, AT Kearney Procurement Solutions, focusing more on vanilla sourcing and supply management work. We believe this group had over $50 million in revenue last year. Moreover, AT Kearney is doing more contingency-based work as well. In a previous post on the subject, we noted "even big-name firms are bidding on projects, putting 100% skin in the game (or close to it). McKinsey and AT Kearney are two firms I know of that recently were willing to put over a dozen bodies onto a project based on being paid a percentage of savings vs. a day rate for teams."
But what does the rumored deal between the two forms mean from a cultural fit perspective? I've observed -- going back to when I interviewed with AT Kearney and other strategy firms as an undergraduate in the mid nineties -- a bit of a closeted elitist attitude relative to some of the Big 5 firms and the Booz culture, which seem more grounded by comparison (ATK is more akin to BCG, Bain and McKinsey in this regard). However, the Procurement Solutions group has always seemed more down-to-earth, going back to the eBreviate days. Interestingly, though, Booz seems to find its way into more large-enterprise transformation deals than AT Kearney.
One person we spoke with who knows both cultures today suggested that Booz is seen more frequently at the corporate level versus doing much stand alone work in procurement. Moreover, he said that "AT Kearney can actually roll up their sleeves and deliver better than Booz in some areas," with the caveat that "they're all a bit like Forrest Gump's box of chocolates -- you never know what you're going to get on any particular project." However, we would add to this comment that the same goes for just about any consultancy.
Our quick take on the potential deal from a procurement and supply chain vantage is that AT Kearney would give Booz much needed sourcing and operations credibility which they lack today. Moreover, it would also provide them with the technical, analytical and product IP contained within the Procurement Solutions Group (including expertise in spend analysis, sourcing optimization, broader data analytics, etc.). In most cases, large procurement consulting deals are fought between folks like "AT Kearney, Deloitte and expert boutiques," the expert we interviewed suggested, rather than providers like Booz, BCG, Bain and McKinsey (all of which, incidentally, also appear to have greater ambitions to pursue the sector as well).
For additional analysis on the procurement and operations consulting landscape and other competitors, you can also read a recent Spend Matters column on the subject from earlier this year.
Jason Busch (with Sheena Moore)