KPMG Consulting To Beef Up Managed Services Portfolio

The new strategy was revealed on the heels of the integrator's latest financial results. For its fiscal year ended June 30, KPMG Consulting last week reported a loss of $26.9 million, including nonoperating charges and a change in accounting principle. Sales for the year were $2.4 billion, off 17 percent from $2.9 billion in the prior fiscal year.

Managed services account for 5 percent of KPMG Consulting's total revenue. Rand Blazer, KPMG Consulting CEO, said during an earnings call last week that he hopes to grow that number to 15 percent over the next two years. "[Managed services is really a normal extension of the systems integration work we are doing," Blazer said. "We've already seen some key wins in this area and are targeting managed services to become 15 percent of our revenue."

For example, KPMG Consulting is looking to extend to other industries a Web-based service that manages the process of hiring contingent workers for financial services clients. The integrator also offers application management services such as order management, billing, customer care, e-mail and online services.

And KPMG Consulting isn't alone in its pursuit of managed services revenue. Hewlett-Packard and Dimension Data said late last month they are jointly marketing and promoting Dimension Data's application hosting and managed services solutions to SMBs in North America. In addition, IBM Global Services last month said it plans to target midmarket customers with Manage It For Me, an array of hosting, security and managed services that it sells directly or via channel partners.

Blazer noted during the earnings call, however, that IBM has its hands full with its pending acquisition of PwC Consulting.

It isn't clear whether KPMG Consulting plans to rebrand other companies' managed services as it extends its own managed services footprint. It also isn't clear whether it will tap solution providers or other business partners to help sell these services.

Follow-up calls to KPMG Consulting about its managed services strategy were not returned as of press time. But Blazer did say on the call that the integrator remains focused on Global 2000 enterprise accounts.

KPMG Consulting, based here, also has some integration work of its own ahead. It recently acquired several former member firms of Andersen Business Consulting to expand its international presence. The deal garnered about 140 partners and 1,400 employees from the consulting practice of Arthur Andersen.

AMY ROGERS contributed to this story.