RSS feedsAccording to the Management Consultancies Association, the worldwide market for management consultancy has grown from $10bn (£5.5bn) to over $100bn in the past decade. And the UK has been at the forefront of this expansion, with UK-based firms generating around 10% of global consultancy revenues.
The UK management consultancy industry is arguably busier than ever,given the downturn and cutbacks seen in the early part of this decade,but what are we all busy doing?
The answer is,delivering a vast range of different services to clients across many sectors. The UK market is a diverse and rich one. While retailing clients tend to focus on managing their supply chain more effectively, in banking the issue is how to expand and sell in highly competitive, tightly regulated markets.
Utilities and insurance, on the other hand,look for how best to respond to changing customer behaviour and improve field force productivity.
DIVERSITY’S STIMULUS
Such variety is a constant stimulant,with clients asking new strategic
questions on how to generate growth in saturated markets, seize new
opportunities and address
threats from India and China.They are also looking for support and advice on
complex delivery challenges involving many new technologies and channels.
These client challenges are mirrored by continual change on the provider side. As the influence and scale of the largest players grow,a new generation of niche consultancy firms has also emerged.
And while UK providers have been quick to establish expertise offshore to tap into highly skilled but low-cost workforces elsewhere in the world, they also face competition from IT service providers based in those same offshore centres.
In the UK,management consultancies are evolving rapidly as businesses and as
a sector. Both the industry and its clients are striving for better performance
– and
each plays a key role in helping the other to get there.
TRANSFORMING THE BUSINESS
How will the industry respond to all these developments?
Will its shape be very different in the future? The answer depends on where in the industry you look.
Take outsourcing.UK companies are global leaders in the take-up of business
process outsourcing,with NelsonHall forecasting that the UK BPO market will
reach $31bn by 2007,following five consecutive years of compound annual growth
averaging 25%.With the trend towards BPO now well established, attention is
turning to outsourcing’s potential to transform business processes and
performance.More than 40% of large UK organisations are already involved in such
projects.
This reflects a defining shift on the client side,away from a focus on cost
reduction and towards sustainable business improvement.As a result, consulting
projects are
becoming much more sophisticated and complex, involving many different
components, frequently including outsourcing and offshoring. At the same time,
the offshore sourcing landscape is being transformed by the emergence of new
centres, in Eastern Europe and elsewhere.
The short and medium term outlook in the UK management consultancy market is
for solid, sustainable growth accompanied by sweeping change and fresh
challenges driven by rising client demand,advancing technology and the declining
relevance of geographical barriers. Recent years in the industry have been
exciting;
the next few promise to be even more so.
