Deloitte is a large professional services network. It was considered the 3rd largest privately owned company in the United States in 2020 by Forbes. In FY2021, the company generated a revenue of US $50.2 billion. Over the years, Deloitte has widened its reach globally and boosted its revenue continuously.
But, what exactly is the business and revenue model of Deloitte that has made it the biggest financial firm in the world? Read this article till the end to find answers to this question.
What is Deloitte?
If you are living under a rock, let me tell you Deloitte Touche Tohmatsu Limited which is popularly called Deloitte is one of the ‘Big Four’ accounting firms which is headquartered in London. The 'Big Four' is a nickname that is given to the four largest accounting firms in the United States. Deloitte offers audit and assurance, consulting, financial advisory, risk advisory, AI and analytics, cloud, tax, and legal services.
Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG) are the other three accounting firms. Deloitte operates in more than 150 countries. In 2021, Deloitte had a total of 3,45,374 working employees.
William Welch Deloitte, a British accountant, founded this company in London in 1845. The company further made its footprints in the United States in 1890. In 1972, the company merged with Haskins & Sells and formed Deloitte Haskins & Sells. Later, in 1989 the firm merged with Touche Ross in the US to form Deloitte & Touch. In 1993, the firm was renamed Deloitte Touche Tohmatsu which is now popularly known as Deloitte.
Deloitte provides its financial and legal services to Fortune 500 companies. But, the firm also provides its services to small and medium-sized companies and even startups. The firm's major client base is in the American division.
Business Model of Deloitte
Let's dive deep into the business model of Deloitte.
Apart from the traditional accounting and audit services, the firm also focuses on internal auditing, IT control assurance, and Media and Advertising Assurance. In FY2021, audit and assurance services resulted in a 6.1% increase in their revenue.
Deloitte auditing services are more than just numbers. The company evaluates the relationships with your technology priorities, capital investments, inventory on hand, workforce, and growth strategies. This helps Deloitte in bringing valuable insights that connect with your brand vision.
The firm explains where your company stands and how you can grow in the future. Working with Deloitte means that your company will get access to an experienced and highly skilled group of people that will provide you with deep insights. The firm uses cutting-edge modern auditing technology to deliver the most accurate results.
The firm offers consulting in the following areas:
- Analytics and M&A
- Customer and Marketing
- Core Business Operations
- Human Capital
- Enterprise Technology and Performance
The consulting team of Deloitte not only answers all your complex questions but gives you actionable strategies that boost your revenue and disrupts the market. According to Deloitte, the most important aspect of any business is people. So, the team will give you strategies that elevate your customer’s experience. It will make sure that your core operations are working smoothly. Their strategies will make technology your friend.
Deloitte offers corporate finance services which include:
- Commercial and personal bankruptcy
- Mergers & acquisitions
- Document review
- Capital projects consulting
The highly skilled professionals will tell you the potential risks and opportunities for your business. The firm uses cutting-edge technology like cognitive intelligence, analytics, and robotic process automation to solve complex problems.
Risk advisory at Deloitte help you in evaluating the following risks:
- Strategic and reputation risk
- Regulatory risk
- Project risk
- Cyber risk
- Enterprise risk management
- Information security and privacy
- Data quality and integrity
- Business continuity management and sustainability
The firm will help you in understanding the risk so that your company reaches its full potential.
Tax and Legal Services
Tax and Legal Services in Deloitte include increasing the net asset value of the company, handling international tax activities, reducing the tax liabilities, undertaking the transfer pricing, and implementing tax computer systems.
Specialists help private companies understand and plan effective business and tax strategies that help the company respond to the evolving market conditions.
Artificial Intelligence and Analytics
Deloitte's artificial intelligence and analytics services reveal all the hidden relationships from all the data. Using the helpful insights the team will help you in implementing the right strategy at the right time using the advanced technology. The team will help you improve your outcomes in key areas of your business which will ultimately boost your revenue.
Deloitte takes your data to the next level using the latest cloud-enabled platforms and big data architectures. The robotic and intelligent automation team will implement automated processes to make accurate decisions and judgments and find new ways to expand your business. AI insights and engagement tools will generate highly actionable predictions and insights using the data.
What Makes Deloitte Stand Out in the Market?
The four things which make Deloitte stand out in the market are their constant drive for innovation, highly skilled professionals, number of employees, and emphasis on making the customer experience more powerful.
All their services revolve around finding creative solutions for their clients. To push the boundaries of innovation the firm has set up five innovation centers:
- Deloitte U.S. Center for the Edge
- Deloitte Center for Energy Solutions
- Deloitte Center for Financial Services
- Deloitte Center for Health Solutions
- Deloitte Center for Regulatory Strategies
The firm knows that if they have a huge workforce of highly skilled professionals they would be able to target a huge number of companies. Among the ‘Big Four’ Deloitte has the largest number of employees: 3,45,374.
How Does Deloitte Make Money?
As you saw above, the business model of Deloitte revolves around these 5 services: audit, consulting, financial advisory, risk advisory, AI, and analytics. They offer these premium services to Fortune 500 companies and earn huge revenue. Consulting is one of the major business units of Deloitte, accounting for 40% of total revenues in 2021.
Half of their revenue comes from North and South America. In 2020, the financial giant generated 25.3 billion U.S. dollars from its Americas division. Deloitte has understood that its major client base is in the American region. To serve these clients the firm hired a lot of employees:156,000. Revenue from the Asia Pacific and Europe, the Middle East, and Africa (EMEA) regions accounts for 25 billion U.S. dollars.
If you see the business model of Deloitte closely you will understand that they provide a range of financial and legal services instead of just focusing on one service. This helps the company in earning a huge amount of profit. Most importantly, Deloitte has understood that the only way to thrive in the market is to constantly innovate.
So, what did you learn from the business and revenue model of Deloitte? Hire specialized employees that have the courage to take risks. Remember, if you don't have talented employees you will never succeed. Try to diversify your services. Always provide quality service to your clients and help them grow because if your clients make profits you will also make profits. You should always look for ways to innovate because this is the one thing that will help you grow.
What is the core business of Deloitte?
The core business of Deloitte revolves around audit and assurance, consulting, financial advisory, risk advisory, AI and analytics, cloud, tax, and legal services. Deloitte provides innovative solutions to their clients using advanced technology.
Why is Deloitte so successful?
Deloitte is successful because of its wide range of financial and legal innovative solutions, advanced technology, and a huge number of employees. Among the Big Four companies, Deloitte has the largest number of employees: 3,45,374. Their dominance in the American division is another reason why the company is still thriving in the market. In 2020, Deloitte generated 25.3 billion U.S. dollars from the American division.
Who are Deloitte's biggest clients?
Deloitte’s biggest clients are:
- Berkshire Hathaway
- Morgan Stanley
- Procter & Gamble
- Apollo Global Management
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