Consultancy is very much back on the corporate agenda. It was an industry that seemed to all but die for a year or two as, especially at the top end of the market, companies scythed back all the discretionary spending they could find.
Add to the fact that most of the big accountancy firms pulled out of the consulting market under pressure from US regulators, and you can see why the ‘c’ word is one of that has fallen out of favour lately.
But, with spring very much in the air, it seems timely to report on the green shoots of a consultancy recovery. At the tail end of last year, a report by International Financial Services London revealed that the UK management consultancy market had taken over from Germany as the largest in Europe.
Now the Management Consultancies Association reports that spending on consultancy has risen by 9.4% in 2003, helping UK consultants’ earnings to top the £10bn mark for the first time.
Anyone who remembers the halcyon days of not so many years ago, when significant double-digit growth was the dish of the day, might sniff at that rate of increase. But you shouldn’t. No one expects those sorts of growth rates to return any time soon, and it doesn’t matter whether you are selling consulting services, tax advice or audits.
The pie may be expanding for the first time in a while, but there is no shortage of firms looking to pick up a slice. Away from the headline withdrawals of PricewaterhouseCoopers, KPMG and Ernst & Young from the consulting market, other accountancy firms have been expanding operations.
A defiant Deloitte is the most significant, but the likes of PKF, Kingston Smith and Vantis are also expanding their consulting operations.
Growth is being fuelled by the outsourcing market. It is a sector that has expanded by more than a quarter in the last 12 months and doubled in the last five years. It will continue but other areas will grow too.
The sales cycle for IT work will shorten by the summer and new clients in utility, financial services and public sectors will come knocking too.
Don’t order the new Porsche just yet, but do expect to be busy.