Consultancy – Togetherness is key to survival

The consultancy market has big players working on big deals, while the smaller guys are offering niche products and services.

Although the 10-year multi-billion pound outsourcing contracts make the biggest headlines, there are plenty of contracts to be picked up at the lower end, which are usually ignored by the likes of Accenture and IBM.

And the smaller consultancies often get the opportunity to work alongside the larger firms, due to the specialist expertise often required in mega IT consulting and outsourcing deals.

In fact, Lynton Barker, the new head of the MCA and chief executive of mid-tier firm Hedra, has extolled the virtues of this model in the consultancy sector. He says that small consulting firms do not compete for work against bigger firms. And they naturally concentrate in niche sectors such as financial services or human resources. This allows the larger consultants to rely on the small guys for particular solutions. And everybody lives happily ever after. Well, not quite.

Mid-tier firms are very much part of the equation, and the consulting arms of BDO Stoy Hayward and PKF fall into this bracket. They are 18th and 25th respectively in the league table, with consultancy fee incomes of £40m and £20m.

BDO and PKF are examples of firms that have the scale to pick off consulting work from the top, as well as the bottom end of the scale. They are ambitious businesses, and despite looking to grow and challenge the big boys, will continue to take on smaller deals.

This is why consultants at both ends of the market can’t relax. In truth, there aren’t many signs of ‘relaxation’ in this sector.

Small firms are focusing on what they are good at, and will even turn away work if it doesn’t fit into their core service offerings.

The large firms have looked inwards after several very tough years, and are making sure that high-profile contracts they undertake stay high profile for the right reasons. And the mid-tier firms are trying to do, well, both.

  • Kevin Reed edits the consultancy page for Accountancy Age

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