PracticeConsultingGrowth rate falls below 10%

Growth rate falls below 10%

Management Consultancy's annual top 75 consultancies survey reveals that the fee income growth rate has subsided

Accenture has once again topped Management Consultancy‘s annual top
75 consultancies survey, recording both the biggest fee income and the largest
fee income increase across the industry.

Link: Management Consultancy Top 75 index, click
here

But despite continued optimism among firms as fee income continued to grow
overall, the survey revealed that the fee income growth rate had subsided.

Total fee income for the top consultancy firms grew by £455m last year, a
9.6% rise. Growth in the previous financial year had hit nearly14%, adding £574m
to total fee income.

Management Consultancies Association director Fiona Czerniawska said its own
figures showed an increase of more like 43%in business advisory services fee
income, although she believed growth among MCA members was ahead of the industry
overall.

‘In the course of the next 12 months it’s hard to see it continue at that
rate of growth – there will have to be a degree of consolidation,’ she said.
‘But it points to a good period in the immediate future.’

Czerniawska also expected the rate of growth of outsourcing to slow over the
next 12 to 24months.

Accenture, which recently lost a £400m transformation programme deal with
Centrica, declined to comment on its growth levels but UK managing director Lis
Astall said she was ‘delighted’ that the firm had topped the survey for the
second year.

Detica chief executive Tom Black said the firm’s growth of nearly 45% in 2005
had been ahead of expectations. While he did not believe growth would be as
strong again this year, analysts were confident of Detica hitting around 20%,
with staffing levels growing by the same amount.

‘The market is as good as we’ve felt it to be for some years,’ Black said.

IT specialist Xantus Consulting saw fee income go up by 69.6%in 2005, to
£3.9m. ‘Within our client base we’re seeing a degree of optimism basically,’
director Dave Yip said.

Yip said the 2005 performance was ‘not a flash in the pan’ and that the firm
had added 15 consultants in the last six months and would probably add the same
again next year –a significant addition for a firm of its size. Accenture saw
fee income rise to £835min 2005, up from £753min 2004.

But it was Aspiren that notched up the highest growth rate overall, up 81.8%.
It also took the title of fastest-growing firm over the last two years and
fastest-growing small firm.

For previous surveys, see
www.managementconsultancy.co.uk

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