Scyne Advisory targets big opportunities
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Walking into Scyne Advisory’s Perth office provides a clear illustration of how quickly the firm has come together.
Occupying a floor in Brookfield Place formerly used by PwC, there is no reception and no signage.
It may lack some corporate trappings but, after six months of tumult, Scyne Advisory has launched itself as a major new competitor in the consulting services market.
“No doubt it has been a challenging few months for everybody but we have come out the other side now with a robust business,” Perth partner and WA leader Tricia Tebbutt told Business News.
Ms Tebbutt spent three months this year on the east coast as part of a small group of partners leading the carve-out of Scyne from PwC.
That was after the ‘big four’ firm became enmeshed in a political and commercial scandal over the misuse of confidential tax advice to the federal government.
While many observers saw the formation of Scyne as a desperate scramble to save jobs, Ms Tebbutt not surprisingly has a much more positive take.
“We sat in a room and over three months we designed what we wanted this organisation to be; you don’t get many opportunities to do that in your career,” she said.
Nationally, Scyne has 109 partners and about 1,400 people, while in Western Australia the firm has eight partners and 90 people.
Its core market is the public sector, after PwC was effectively banned from government work because of the tax advice scandal.
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However, it is also targeting growth in other sectors.
“A lot of the last few months has been asking what the focus of this business is,” Ms Tebbutt said.
“We started with government and then we added in public purpose.”
That term covers a large and diverse set of organisations, including not for profits, First Nations entities, religious organisations, charities, peak bodies, and public universities.
And when Scyne talks government, it also includes government trading enterprises, which in WA includes the likes of Western Power, Water Corporation and Fremantle Ports.
Ms Tebbutt said it was inevitable there would be market segments where Scyne competed with PwC.
“There are parts of the market that will be contestable,” she said.
“My view is you can never have a complete, clean split between government and non-government.”
Ms Tebbutt believes Scyne has carved out a unique niche.
“It’s an at-scale public-purpose advisory business, and I think that is the really interesting part.
“We are the first in the market and that’s what makes it so exciting.
“Obviously we have national coverage and … a really good mix of capability and experience here in Perth.”
Staff and clients
The scale of the Scyne business is less than originally envisaged.
When private equity investor Allegro Funds announced in July it had agreed to buy PwC’s public sector consulting practice for just $1, it said the spin-out business would have 130 partners and 1,750 staff.
Ms Tebbutt said the numbers were fine-tuned as the Scyne team gained more clarity on their focus.
“You can’t decide your size until you decide what you want to be,” she said.
During the transition process, about 80 PwC staff were invited to join Scyne but were subsequently found to be surplus to requirements.
They were sent back to PwC and were included in the 300 job cuts PwC announced earlier this month.
This group included a handful of people in Perth.
Reflecting on the journey over the past few months, Ms Tebbutt said she was particularly impressed by the response of her staff.
“I’m so proud of how resilient our team has been,” she said.
“We’ve retained our entire team through this process, and that tells you a lot.
“We could have all gone to other places but actually we haven’t because we want to be here.
“The people here have chosen to work at Scyne Advisory.”
Craig Shepherd, who led the WA business while Ms Tebbutt was on the east coast, said clients had to take pause during the transition.
“We went through a very rigorous process with the WA government to establish Scyne as a supplier,” he said.
“During that process, new work was slower than what it normally would be.”
However Mr Shepherd said clients had been accepting and understanding.
“Our clients have been very supportive. We've been able to retain a lot of the work we had in the legacy business,” he said.
“We’ve got a good pipeline ahead of us and clients are engaging with us as Scyne.”
Scyne’s Perth team covers four practice areas, with Ms Tebbutt, Emily Readhead and newly promoted partner Luke Mitchell working in strategy and transformation.
Ms Tebbutt, who came to Perth in 2011 to work on the commissioning of Fiona Stanley Hospital, has a particular focus on the health sector.
“My client base scanned the whole public and private health arena, but the vast majority of work I’ve done in the 12 years I’ve been here has been with public sector and not for profits,” she said.
Mr Shepherd leads Scyne’s infrastructure and property practice in WA while other partners lead the finance, risk and cyber practice area, and the data and digital practice.
Competition
Mr Shepherd said Scyne set out to be a disrupter in the market, and that would include taking on the big four accounting and consulting firms: Deloitte, EY, KPMG and PwC.
“We are used to having competitors,” he said.
“We don’t shy away from being a disrupter to that type of market.”
That included in his own practice area.
“What we’ve got, that is a bit different, is that we have designed a practice that covers the infrastructure life-cycle, from strategy and planning all the way through to delivery and asset management and transactions,” Mr Shepherd said.
“No-one else has done that.”
Ms Tebbutt said there were different competitors in each part of the market.
“The competitive landscape is changing all the time,” she said.
As well as the big four, Scyne’s competitors will include mid-tier accounting firms as they move further into consulting.
Scyne will also compete against the international strategy houses such as BCG, McKinsey & Co and Sia Partners.
Other competitors could be as varied as global consulting giant Accenture, Australian firm Nous Group, which has a strong presence in the public sector, through to engineering firms, project managers and tech firms focused on cyber security.
The blurring of traditional consulting business models has been illustrated by several recent acquisitions.
Early this month, Deloitte announced it had bought Perth-based engineering services consultancy Nihar.
Its 70-strong team specialises in life-cycle asset management for the oil and gas, mining, manufacturing, and the utilities sectors.
Accenture has also grown its WA presence.
In August, it bought Perth firm ATI Solutions Group, which specialises in automation technology for mining companies.
That followed its purchase a couple of years ago of Perth-based OT service provider Electro 80, which helps clients digitise their manufacturing, operations, and engineering.
Governance
Ms Tebbutt believes Scyne’s governance and management structure will be an asset for the business.
Its board has an independent chair in John Mullen, whose experience includes chairing Telstra, Brambles, and Treasury Wine Estates.
Scyne’s 109 partners, who collectively own about one quarter of the business, will shortly have their own representative on the board to sit alongside Allegro’s nominees.
The firm appointed former Federal Court judge Andrew Greenwood to lead its focus on ethics and integrity during the set-up phase.
“Everybody who has joined Scyne has been cleared to say they were not involved in the [PwC] tax matters,” Ms Tebbutt said.
She said another notable difference would be having a professional chief executive rather than a managing partner.
Ms Tebbutt said Scyne was a big change from her previous experience.
“I certainly feel a lot of more involved in the running of the business than I did as part of a nine hundred-partner practice at PwC,” she said.
Growth
Ms Tebbutt said Scyne was aiming to expand its local presence.
“In WA I think there are significant opportunities to develop the practice further,” she said.
“We are recruiting and looking to grow, but not for any sake; we want to grow sustainably.
“We also want to make sure we have career growth for our people and we do that by sustainably growing the business.
“I would think in three years’ time we will be significantly bigger in WA than we are today but we will never compromise on quality to achieve that.”
Mr Shepherd believes Scyne’s independent status could be a benefit, as it had the ability to form alliances or partnerships with national and international firms.
“That’s a great opportunity,” he said.
“We are unbridled by the traditional bureaucracies of our competitors.
“Some things we thought we weren’t able to do in a big four firm are no longer a constraint to us.
“We don’t have external audit, which restricts certain activities.
“The opportunity is quite endless for us at the moment.”