Time for consulting to re-balance?

by Alan Leaman, MCA

More from this author

15 May 2012

  • Comments

THE MCA'S LATEST DATA for the UK consulting industry, looking at performance in 2011, show that the industry responded well to the dramatic fall-off in public sector work that it has experienced in recent years, especially since the general election of 2010.

Clearly, Britain's consulting firms have reacted swiftly and effectively to the challenge of austerity, and the wider business and economic challenges.

While it is good news that consulting firms' fee income has now recovered to the levels last seen before the financial crisis - not least because it is a signal that UK plc is thinking about opportunities for growth as well as surviving the downturn - there may well be further tough times to come.

The bounce back in private sector consulting work was led in 2010 by the financial services sector and much of that growth continued through 2011.

The added and very positive ingredient last year was a healthy increase in consulting for manufacturing companies. Consulting can be a leading indicator of future economic activity, so this could be a sign that Britain's manufacturing companies are getting themselves better prepared for opportunities in the up-turn.

But this balance of fee income by sector, while a tribute to the industry's skill and dexterity, also means that it is heavily exposed to the financial services sector and, in particular, to the banking industry.

The challenge for 2012 and beyond is to ensure that management consultancy can re-balance itself or, more appropriately, sell a diverse portfolio of services to a larger number of clients outside the financial sector.

Reducing the relative proportion of fee income - though not the absolute total - that flows from the financial services sector will be one of the key tasks for an industry that must manage its financial and business risks carefully in what remain difficult economic times.

Increasingly, clients understand that spending on consulting is an investment that generates a valuable return. And they are looking at their purchasing decisions in that light. Consulting firms that deliver high returns and focus their efforts on value will be well placed to prosper in uncertain times.

Alan Leaman is chief executive of the Mananagement Consultancies Association

Image credit: Shutterstock


Visitor comments

blog comments powered by Disqus

Add your comment

We won't publish your address

By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

  • Send


Financial Planner

The Ministry of Defence Surgeon General’s (SG) Finance Department, Lichfield, Staffordshire, Permanent, Full Time, £ £30,008




Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials


Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you



Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.


iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.