What does the Consulting market place look like so far for 2013? An insight from the Manager of our Consulting Team, Paul Mullins.
The Strategy Consulting market is experiencing a boost as we move towards 2014. Certainly not booming but it is the best we have seen for a few years now. Our feeling is that the current momentum in Strategy Consulting is driven by the positive headlines in the press and what seems like a cautious upturn in the economy, the result of which is increased confidence in our clients.
An increase in M&A activity has seen a desire from clients to seek profiles from those candidates with experience in Commercial Due Diligence and an interest in re-establishing a growth agenda has meant a higher demand for more ’blue sky’ thinkers.
It is pertinent to mention the acquisitions that have been made in this space, specifically Monitor Group being taken by Deloitte - which was widely seen as a very positive move. Deloitte have taken a decsive step forward in the battle for prestige. We understand that ’Monitor Deloitte’ is now larger than Bain in the UK which is certainly a statement of intent to the market. There are clear differences between these firms in terms of culture and structure and it remains to be seen how these differences will affect the integration process.
Market information tells us that Monitor Deloitte will not be the only large-scale acquisition in the strategy consulting arena. It is clear that there is/will be a consolidation of the ’strategy boutique’ environment involving a number of the big names. We wait eagerly to understand who is involved and when these moves happen. Our gut-feeling, however, is that the Big Four accountancy firms stand to gain ground on typical strategy houses, with their powerful proposition of brand, scope and variety of their offering being too good to turn down in a cost-sensitive attitude towards strategy consulting work.
Operations consulting has expectedly been a relatively buoyant market in recent times due to the common themes of cost reduction and efficiency improvement being at the forefront of CXO agenda. General market optimism has encouraged further corporate spend on consultancy services so the outlook for 2013 as it stands is strong.
With larger businesses rejuvenating activity in the M&A market, consulting in Operational Due Diligence has been very active and this is certainly in a strong position to continue. Lean/Process transformation has also been an area of significant development as businesses try to optimise their internal operations in order to put themselves in a strong position to harness expected market growth.
With the large accountancy and consulting firms looking to further solidify their position as the market picks up, we expect 2013 to be a year of further consolidation in operations consulting. A number of smaller businesses are actively seeking the fast-growth prospects that an acquisition could bring and this notion sits well with senior Partners of the larger firms who are looking to quickly increase market share and many talks are quite developed.
The IT Advisory market is seeing quite an upturn with more and more organisations sensing the real value of their CIO. Businesses are becoming more reliant on the CIO office and technology as a whole as the digital revolution continues to grow. Areas such as Cloud services are in increasing demand which has led to consultancies launching new services.
An ever increasing number of companies are reaching out to consultancies for IT advisory services to boost competitiveness. With there being an upturn in Mergers and Acquisitions the need for Advisory firms to consult on IT integration projects has risen and is expected to continue to do so. This can also be said for IT Sourcing, IT Due Diligence, IT Cost reduction and IT Infrastructure services.
The Procurement consulting market has recently enjoyed something of a boom. There has been an increased demand for services but the war for talent continues.
Many blue chip organisations are looking for further cost reduction, 3rd party spend reviews or the implementation of improved processes this activity has been driving demand for consultancy services. Across all sectors we are also noticing an increased demand for organisations to better understand the detail of their 3rd party spend. Consultancies are therefore noticing greater uptake of their data analytics services. Technology products that aid procurement services are also on the increase this is another area that consultancies are eagerly tapping into.
Procurement is still a comparatively small function, coupled with its continued expansion the demand for experienced and talented professionals is outweighing supply. We have noticed an increase in graduate intake to overcome this but also interim professionals moving across. As interim procurement professionals look to return to permanent careers many are viewing consultancies as the perfect middle ground. Consultancies enable them to have the stability that a permanent role brings, with the diversity of projects and varying clients.
The outsourcing market has seen increased activity throughout 2013. Outsourcing Procurement enables organisations to manage headcount and fixed costs, whilst still delivering savings and value. Procurement consultancies /outsourcing organisations are also able to provide the strategy as well as the delivery, providing a one-stop shop.