Source Information Services highlights the key consulting trends for 2013
After speaking to 260 consulting leaders across 26 countries, and 800 global buyers and end users of consulting services from both the public and private sectors in 2012, Source Information Services (Source) has identified five key consulting trends for 2013.
The list includes expectations for growth in Europe, consultancy strategies, market consolidation, hotspots for global growth, and finally, the consulting firms best placed for future growth.
1. Low levels of growth in Europe: The European consulting industry may bounce back, but much rests on the continued strength of the German market which grew by just over 7 per cent in 2011, and was the second biggest in the region (behind the UK). On balance, a lot relies on the performance of the financial services industry across all European countries. Things could head in either direction, but Source expects more of the same – low levels of growth across the European consulting industry.
2. Testing strategies: Source client research has identified three major opportunities for growth for consulting firms in 2013: new services, new roles, and new delivery models. Of those, new delivery models – which concerns consulting firms moving away from the old pyramid consulting model in favour of something more flexible – appears to hold the greatest potential. In response, says Source, consulting firms appear to have identified 10 different strategies: in 2013 Source will be asking clients what they think of those strategies.
3. Further consolidation: Deloitte’s acquisition of Monitor was another sign of continued market consolidation. These acquisitions may hold potential for consulting firms but Source research has found that clients tend to be cynical about market consolidation, suggesting that what it does in reality is to remove capacity and choice from the market. So the test in 2013 will be whether the interests of consulting firms and clients can be balanced by a restructuring industry.
4. Hotspots: The Gulf Cooperation Council (GCC) has been the strongest performing consulting market over the last few years. The signs are that Saudi Arabia, which now represents 32 per cent of the GCC market, and Qatar, representing 13 per cent, will continue to fuel a booming market – but Source also expects India to recover from a period of disappointing growth. In 2013, for the first time, Source will be taking its research to China and Brazil to find what role both are playing in the global market.
5. The best placed for growth: New client interviews conducted by Source are seeking, amongst other things, to find out which firms appear best positioned (in the minds of clients) for growth. Earlier in the year, The Boston Consulting Group (BCG) was ranked as the firm best placed for growth because of the fact that it is seen by clients to be increasingly capable of diversifying by role and delivery model. Source expects BCG to be well placed again: the big question will be whether one of either PwC or Deloitte can start challenging it for top spot and whether – as the evidence so far seems to be suggesting – client sentiment will continue to turn against McKinsey.
Edward Haigh, Director of Source, said: “The assertion that critical times lie ahead for the consulting industry may be sounding a bit repetitive now, but it remains true. Consulting firms in 2013 will no doubt be looking for the watering holes in a persistently tough market, but the smartest amongst them will recognise that the greatest potential doesn’t lie in seeking out new markets, it lies in being ready to challenge the received wisdom about what consulting is and how it’s done.”
During the first quarter of 2013, Source Information Services will publish further research on private sector end-users’ predictions for their consulting needs over the next 12 months, and their views on consulting firms’ strategies for growth, and which segments of the consulting industry are best positioned to grow.