It’s been said repeatedly over the past year — the New Zealand IT services market is headed for a shake-up.
The most recent prophet of change is Phil Royal, who joined CGNZ (formerly Cap Gemini Ernst & Young) in Wellington this month after giving up the chief executive job at BearingPoint in February.
Royal says consulting prices have been driven so low that thaere isn’t enough money to support the handful of tier-one firms in the New Zealand market.
“The face of it will have changed within 18 months,” says Royal, who picks that today’s three or four big firms will shrink to one or two through merger and acquisition.
Consolidation will also be a feature of the “commodity” end of the market, he believes.
Royal won’t publicly pick the winners but obviously thinks his new employer will be one of them.
CGNZ came into being last December, when David Steward, Alan Sinclair and Paul Cook bought the local business from international consulting firm Cap Gemini. They’ll be familiar companions for Royal, who worked with them at Ernst & Young about 12 years ago.
After that, he did an 18-month stint as Transpower CIO before spending long periods overseas with BearingPoint and its predecessor, KPMG Consulting.
“I got a little tired of being part of a globally owned organisation,” says Royal, who left BearingPoint without lining up a new position. Local ownership allows greater pricing and resourcing flexibility, he believes.
Royal becomes a director and shareholder of CGNZ, which has about 150 staff.
CGNZ’s Cook says the company is “delighted” to have Royal back.