| Management consultancy sector responds quickly to recession |
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| | The management
consulting industry has
changed the balance of
its work dramatically in
the last year, according
to authoritative
analysis from the
Management Consultancies
Association, the
industry’s trade
association.
Consultancies adapted
quickly as recession hit
the British economy in
the 3rd and 4th quarters
of 2008 and the needs of
their clients changed.
A positive force
for the economy is the
latest report from the
MCA. It shows
significant differences
between 2007 and 2008 in
the type of work being
carried out by
consultancies. There was
a substantial rise
during 2008 in the use
of consultants by UK
companies to increase
productivity, raise
performance and reduce
costs.
In particular,
spending on business
process re-engineering
was up by 31%, and by
19% on operations
consulting. While IT
consulting and
programme/project
management remain the
largest services, even
there the focus has
shifted significantly
towards work that helps
clients adjust to the
demands of a shrinking
economy and a tougher
economic climate.
Alan Leaman, chief
executive of the MCA,
commented: “The downturn
hit fast and furious in
the second half of 2008.
Management consultancies
adapted quickly by
focusing intensely on | |
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| | the new needs of their
clients. The consulting
industry is helping
business through the
pain of this recession,
and also equipping
companies to prosper
once the recovery
comes.”
UK based
consulting firms
increasingly win
business abroad
The MCA estimates
that management
consultancy contributed
£914m in exports to the
UK in 2008. The
government-sponsored
Professional Services
Global Competitiveness
Report recently stated
that “UK management
consultancy is a world
leader”. This is
reflected in demand for
British consultants
around the globe, with
particularly strong
growth in the Middle
East and significant
opportunities in Asia.
Leaman said: “The
reputation of UK-based
consulting firms is on
the rise around the
world as overseas
organisations
increasingly recognise
the depth of knowledge,
skills and experience
within the sector.”
UK consulting
still growing but at a
slower rate
The UK consulting
industry continued to
grow overall in 2008,
though at a much reduced
rate compared with
recent years: 5% growth
in the past year
compares with 10% in
2007 and a peak of 27%
in 2005. The MCA
estimates that the total | |
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| | industry in the UK is
now worth around £9bn
and employs more than
55,000 people.
Other findings in
the MCA report include:
• Financial services
and manufacturing both
saw falls in spending on
consulting in 2008, down
6% and 3% respectively;
• The sectors with
the largest growth in
consultancy spend were
resources/energy and
construction/transportati
on, both recording 8%
growth;
• Environmental
consultancy continues to
show significant growth,
up 31% to £77m;
• There has been
some further growth in
employment in the
industry during 2008 as
consultancies fight to
win and retain business
through the quality of
their staff;
Leaman concluded:
“Management consultancy
is certainly not immune
from the recession and
we know that 2009 will
be an exceptionally
tough year for the
industry. But this data
also shows how resilient
it is, and how quick
firms have been to spot
what their clients need
in the downturn. The
value of working with
expert and independent
outsiders is, if
anything, even greater
in these difficult
times.”
The full report can
be downloaded
here. | |
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