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What M&A Activity at SQS Means for its Management Consulting Model

 

We recently spoke with QA specialist SQS about how its acquisition of Moorhouse Consulting and its own acquisition by Assystem Technologies (AT) are each supporting its management consulting (MC) services ambitions.

SQS continues to deploy its MC units across geographies

Firstly, Moorhouse Consulting. This U.K.-based company brings in ~140 consultants and £22m in annual revenue (2017). As well as bringing in scale, Moorhouse complements SQS’ program management capabilities, an area of strategic importance to the company. Following the arrival of Diederik Vos in 2012 as CEO, SQS identified its MC offerings as a priority for investment. With its MC arm, SQS offers change and program management services for large business and IT projects and programs, providing help in ensuring the success and quality of these projects. MC means that SQS becomes involved early in the project life cycle, and can thus position its QA/software testing capabilities at a more strategic level than just pure test execution.

This is where Moorhouse fits in: it delivers transformation projects in areas including change management, customer journey improvement, strategic design, digital and technology transformations, post-merger and acquisition integration, program management, and performance improvement.

SQS continues to execute on growing its MC strategy, something it has accelerated in the past three years with the acquisitions in the U.S. of Trissential (2015, $32m revenues in 2014) and more recently in Italy with Double Consulting (€7m in 2016 revenues). SQS believes it now has its major countries (U.S., Germany/Austria, Italy, and, with Moorhouse, the U.K.) well covered.

A priority is sharing country-based capabilities across MC units. For example, Trissential in the U.S. is deploying its agile development approach and lean methodologies in other MC units. And so is Italian unit Double Consulting, around its financial expertise. A next step is Moorhouse Consulting sharing its CX and post-merger integration capabilities.

Being part of AT means new opportunities

So, what does SQS’ acquisition by AT, an engineering and R&D (ER&D) services vendor headquartered in France, mean for its MC ambitions? SQS is now part of a €1bn group with 14k employees, triple its former size.

In the short term, MC will continue to expand its capabilities in its largest market, Germany. Short term growth there will be mostly organic, though it will be opportunistic with M&A.

In the longer term, AT (which itself is now owned by PE Ardian) presents new opportunities for SQS and MC both in terms of geography (expansion in France) and also in capability. SQS highlights that, though the nature of work in ER&D services is different from that in IT projects, the required program management skills are broadly similar in both areas. Hence, AT’s client base potentially represents a brand-new target market for MC. The obvious opportunities are in managing IoT programs, currently a high growth market. And of course, IoT sits nicely at the intersection of IT and ER&D, in the physical to digital convergence space, and will thus help MC in developing ER&D program management expertise.

Comments to this post:

  • By recycling through M&A Moorhiuse and SQS practice what they preach : value creation Great analysis. Thanks

    Apr 10, 2018, by William Bierce

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