Mo’ Money, Mo’ Problems – Deloitte And An Unhappy Client

“I don’t know what they want from me, It’s like the more money we come across, the more problems we see.”
Notorious B.I.G

Deloitte is doing very well financially. Although numbers for the US for fiscal year 2007 are not yet up on their website, I did see this article about results in the UK:

Deloitte records 15% revenue surge
Tax leads the way with a rise of almost 20% on last year, while Connolly earns £4.6m for the year’s work.

“Deloitte’s revenues grew by 15.6% in 2006-7, to just over £1.8bn. The firm announced profits for the year of £572m today, an increase of 17% on the previous year. The numbers were driven by a huge growth in tax revenues, up by 19.2%. The surge saw chief executive John Connolly’s pay soar to £4.6m, a 12% rise. Average profit per partner at the firm is now £877,000.

Connolly said: ‘A changing tax environment with increasing focus by tax authorities and tax payers on the accuracy, efficiency and timeliness of tax reporting saw exceptional growth in our tax management consulting service line…”

It’s interesting that Tax is leading the way. Perhaps Deloitte is enjoying the fact that KPMG, E&Y and BDO are preoccupied with tax issues of another kind.

However, it’s always necessary to keep an eye on that pesky Consulting practice. Although Consulting has been a steady ~30% of US revenues for the last few years, bad projects can sometimes make it seem like that’s the only thing you’re doing and to seem to everyone around that you’re not doing it very well. In particular, when you don’t do it very well for a government body, the cow pies can really hit the fan!

Looks like a job for Super Deborah!

Gimme Your Wallet, Superintendent Brewer
And let’s withhold the school board’s checks and boycott Deloitte until teachers get paid
“Heads should roll in L.A. Unified’s payroll debacle, now entering its seventh month. Thousands of employees—mostly all-important teachers— of the nation’s second-largest school district either do not get their monthly checks, or they get too little, or, in the cases of the lucky ones, too much…And there are other steps that teachers – and a sympathetic public – can consider. One would be boycotting the worldclass financial and consulting firm Deloitte & Touche. Several busloads of angry, picket-carrying, foul-mouthed teachers stationed outside the firm’s downtown high-rise at 350 S. Grand Avenue would make a bold statement.

We tried to find out how Deloitte is addressing the Category 5-PR-disaster, but the firm’s representative, Christine Brodeur wouldn’t stray from the firm’s unresponsive, prepared statement, the second sentence of which makes it sound like it’s all the school district’s fault. “We empathize with those district employees who have been affected by the transition to a new payroll system. We have been working very closely with district officials to help them resolve remaining issues they face operating the system.”

We’re not here to place blame, but it seems reasonable that the district and Deloitte share it. Instead of hiding, Deloitte should strike a high profile and dispatch 10 limousines to ferry its top-notch systems people to school district headquarters. Call a joint news conference with school officials to announce when the problem will be resolved. And tell the public that you are returning all of the taxpayer money. Do it, even if you’ve done nothing wrong. The firm doesn’t seem to fathom the PR-nightmare on its hands. If this is the best crisis management a world-class firm can muster, public agencies should show caution before signing rich contracts with them. And the rest of us should take our business elsewhere.

Maybe a creative civics teacher could draft a compelling lesson plan about the shortcomings of capitalism, as shown by the handling of this computer disaster by the district and its greedy contractor.”