EY navigates new terrain after shelving Project Everest

After shelving Project Everest — an ambitious plan to split its audit and consulting services — EY is now in a critical transformation phase to enhance its value to clients. The “Rethink EY” analyst day in April provided a platform for the firm to showcase how it is adapting its strategies and initiatives to thrive in a post-Everest world.

This event marked the beginning of a transformation of the way EY positions its service and partnerships, revealing a firm that is revising its focus more through evolution than revolution. Yet, the exact strategy remained opaque, which is not surprising given the imminent leadership transition with new CEO Janet Truncale set to take the reins in July.

Life after Everest represents a period of transformation for EY

During the event, EY’s leadership outlined what Truncale’s strategy could be. Key strategic shifts were highlighted to better align EY with new market realities:

• Integrating business and transformation: Positioning itself as a “business engineer,” EY is focusing on integrating business processes with technological innovations to ensure strategies are both actionable and effective, leading to tangible outcomes. This provides a clear differentiation from most service integrators and enables EY to leverage synergies from its fields of play in tax, risk, and assurance, and focus on delivering long-term business value for its clients.
• Investing in technology and leveraging AI: In line with its peers, EY is making significant investments in technology, highlighted by a $1.4 billion investment in AI technologies. This spending is designed to harness generative AI to augment human capabilities while enhancing decision-making and operational efficiencies. However, EY executives conceded that GenAI is not creating new budgets but rather is resulting in a shift of existing budgets.
• Human-centric transformations: EY mitigated concerns about GenAI’s impact by double-clicking on its “Humans@Center” approach, emphasizing the importance of emotional intelligence, a supportive culture, and proactive employee engagement in driving successful organizational transformations.
• Enhanced core capabilities and a shift in service delivery: EY has enhanced its core capabilities in tax and audit and increased its focus on strategic managed services by prioritizing IP-driven services. This strategic shift aims to better align with revenue generation from proprietary technologies while maintaining client centricity.
• Expanding partner ecosystem: To grow its service ecosystem and effectively navigate regulatory challenges, EY is deepening its relationships with key technology partners including SAP, Microsoft, and ServiceNow.
• Shift to industry-led go-to-market: Discussions with EY executives made it clear the organization will shift to an industry-led go-to-market strategy, which will align with how its key competitors operate.

These strategic shifts and increased focus on enhancing its core strengths position EY to successfully navigate the post-Everest landscape and emerge as a leading force in the industry.

To realize its vision, EY must sharpen its pitches on GenAI and transformation, focusing on actionable outcomes and industry-specific solutions.

Looking ahead, EY must do two key things. First, it must continue demonstrating how it has addressed the challenges that led to Project Everest. Second, EY must articulate how it is preparing for the disruptive shift of GenAI. Areas for improvement include enhancing the clarity and transparency of its GenAI applications and ensuring clients fully understand the tangible benefits. EY also has the opportunity to refine its approach to transformation services, avoiding the generic jargon that plagued digital transformation during the last few years to clearly define what “transformation” really means in a way that resonates more effectively with clients.

Additionally, EY’s shift toward industry-specific solutions presents a chance to move away from one-size-fits-all approaches. However, this will require embracing deeply customized, sector-specific strategies from the outset to meet unique industry demands. Addressing these areas thoughtfully will not only enhance client satisfaction and outcomes but also solidify EY’s competitive edge in the marketplace.

The Bottom Line: EY is adapting its strategies post-Project Everest, but this might not be the last time we hear about separation.

As EY moves forward, the “Rethink EY” event has set the stage for its new strategy, which the new CEO will announce later this year. The foundational strategy indicates a future where technology, human-centric approaches, and ecosystem collaborations play pivotal roles.

However, navigating the challenges of industry differentiation and regulatory constraints while driving clear messaging around services will be crucial if EY is to strengthen its market position and harness growth opportunities post-Everest. Maintaining vital C-level relationships and driving business transformation will keep the firm distinctly positioned from the plethora of SIs. But we believe enterprise leaders also should plan for the possibility of Project Everest being reloaded at some point in the future.