As demand for consultancy services continues to wane across the APS, a new breed of advisor is taking up where the 'Big Four' left off.
Senior executives may have lost their jobs, consultants been stripped of professional licences, and big-brand consultancies received significant dents in their reputations. But for those left behind, the 2023 tax leaks scandal and other tales of consulting ignominy - and the new regulations that will likely result - have led to a more open playing field, and a sturdier platform on which to build the kind of relationships that lead to lasting change.
The scandals have also shown that, sometimes, the "mid-tiers" may be a better option to advise government than the "big boys" of the past.
While the Federal Government continues to cut spending on consultants and contractors (targeting $6.4 billion savings over the next four years), and to hire more public servants (30,000 in the past two years), and the 'Big Four's' Australian partnerships shrink as a result, some consultancy firms are bucking the trend and expanding their APS portfolios - with a promise to do things better, more transparently, and more sustainably than ever before.
One of those firms is Protiviti, a global consulting practice that's made a name supporting Australian governments with the specialised skills, advice, and technology required to meet complex challenges in internal audit, project assurance, digital transformation, risk management and resilience.
Gihan Mallawaarachchi, who leads public sector business at Protiviti, cut his crisis teeth during the COVID pandemic, when he served on a federal vaccination taskforce - a role he says perfectly embodies the specialised support consultants can provide.
"We don't need or expect the APS to be masters of everything," says Mallawaarachchi. "In these kinds of rapid response environments where the public service doesn't necessarily have all the required expertise, having specialised consultants with that depth of experience can mean the difference between program success and failure."
"Depth and specialist expertise" are terms you hear a lot from the consultants at Protiviti. For some people, they may be the big consultancy you rarely hear about, but for many APS clients, they are experienced, committed professionals, nearly always in the background, who have designed tools and processes that make service delivery more efficient and program delivery more accountable and transparent, and help government agencies better support, protect and serve their citizens.
In a recent review of comments from a federal agency for which Protiviti has provided assurance for major projects - senior leaders variously acknowledged the firm's agility, flexibility, responsiveness, close collaboration, and "genuine, deep alignment of approach with our organisation".
Protiviti's Canberra-based consultants say they're focussed on delivering engagements in a way that builds the capabilities and skills of the public sector - a key recommendation of the final report of the Senate inquiry into consulting services' integrity, which was handed down last June.
"We certainly agree that consultants should not be performing core roles in policy development, undertaking procurements or preparing policy proposals, but it's our contention that high-value, high-impact professional services still have an important role to play in supporting complex, high-risk programs," says Mallawaarachchi. "Bringing in people with insights and experiences from different organisations and jurisdictions allows these agencies to pinpoint the knowledge they need and design their programs in an effective, economical and timely way, without going through any specific discovery."
Protiviti advocates for "co-sourcing" of skills and resources for many public programs, where dedicated or seconded consultants bring value in emerging trends, different operating methods, or specialised technologies that can uplift internal capabilities. "Consulting should be outcomes-based, not milestone-based," says Mallawaarachchi. "I think this is one of our core values in terms of how we deliver services and skillsets, and how our work lives on after we walk out of the building."
It's an irony not lost on Mallawaarachchi's team that there's been far more coverage of the sums paid to consultants - sums that reportedly trebled every decade in the past 30 years - than the fact that, without them, many agencies would arguably have had to expend even more to deliver their services or programs effectively and securely.
"Gutting the system of [external] partnerships for the sake of immediate savings risks undermining national capability and slowing implementation of complex programs," Dr John Coyne, director of national security programs at the Australian Strategic Policy Institute, wrote recently in The Canberra Times. "Rather than casting the consultants-versus-public-servants debate in black-and-white terms, we need a more nuanced, outcomes-driven approach."
While the recent Senate inquiry recommended a variety of measures to improve the management and transparency of consultant contracts and a new regulatory framework and reporting mechanisms for the industry, it is this transfer of knowledge and skills - with specific activities and timeframes documented in contracts - in which action is starting to be seen.
It's here that Protiviti's experience across multiple jurisdictions makes it a useful partner, particularly for agencies that can learn a lot from their counterparts globally. Protiviti regularly connects its clients across both Federal Government and globally to share best practices.
Further Protiviti invests in its staff through a structured and robust training program across levels, an important differentiator is the use of consulting "schools" for each level, Protiviti trains its staff in a consistent methodology which is used globally, further this is complemented by technical, industry and solution training through online and face to face training.
For clients, Protiviti maintains a large "knowledge repository", KnowledgeLeader, which acts as a sort of library of publications, online tools, and best practices. For a number of clients and as part of its services, Protiviti provides a number of licences, further upskilling client staff. It also operates a busy program of "lunch and learn" sessions that help government clients meet and canvas subject specialists, and connect with private-sector clients involved in similar programs.
Tony Sanfrancesco, a Director who's has worked with Federal Government clients for the last 10 years, sees these ongoing relationships as critical to their success. He cites a project earlier this year to develop a framework to help an agency with a compliance requirement.
"We sat down with senior executives and really went through a journey with them to understand 'what good looks like', how they want to be known... ensuring the framework we developed was not only compliant with their regulations, but really reflected the values and outcomes they wanted.
"We didn't just come in and say 'this is the framework we want to use' - we analysed their work and co-designed the framework together."
It's this mutual respect and openness - embodied in co-design and collaborative program rollouts - that seem to be guiding governments' growing trust in smaller, specialised consultancies.
Shane Silva, who manages technology assurance at Protiviti, says the company never goes in with predetermined tools or methodologies, but works "like a subject-matter specialist" with internal team members to develop discrete solutions for each project.
This specialised IT expertise is common among mid-tier advisory services in Canberra, which are capitalising on procurement practices that now consider firms beyond the big four.
"I think government service delivery in Australia will increasingly be looking for further efficiencies, which firms that invest heavily in tech enablement will be able to provide," Silva says. "Being part of a closely-linked global network gives us scalability and continuity of services, because we have redundancy in our leadership that supports continuing growth in our people. We're not just centred around a single leader who might have set up a boutique firm but won't be there forever."
"Being part of a closely-linked global network mitigates the risk often associated with smaller firms that rely on key founders. Should those founders be unavailable due to capacity constraints, health issues, or retirement, it can severely impact the continuity of services. Our scalability in leadership ensure that we maintain and expand our services without such disruptions."
Gihan Mallawaarachchi sees three "natural" value drivers of a specialised consultancy with an international footprint: the close relationships that spring up around smaller firms and inspire collaboration and co-design; the need for the APS to be supported by "people not brand-names"; and insights from multiple sectors and jurisdictions - "which is particularly true with emerging challenges and technologies".
For Mallawaarachchi, it's a genuine commitment to clients - based on trust, transparency, and enduring value- that ultimately will repair the damage of the tax leaks scandal and ongoing questions about the merits and ethics of larger consultancies.
"There's been this mentality of abundance, which has led to a limited understanding over the scope of delivery, and agencies not holding suppliers to account when they hand over a project," he says. "I think we need to see more agencies insisting on real value, close collaboration, and targeted capacity-building that's going to be translated into reality.