| | There are three big
stimuli that can cause
demand for a product or
service to rise
dramatically. For the
consulting industry the
good news is that one of
these stimuli is just
coming into play and is
set to sustain rising
consulting demand for a
good few quarters to
come.
So what are these
stimuli and which of
them is about to
revitalise growth
patterns in our
industry?
A new technology
or fad. The first major
stimulus is the sudden
introduction of a new
technology, fad or
business challenge. In
the consumer world think
the introduction of
DVDs, Apple's iPod or
the plasma TV. Each has
created a frenzy of
demand and we have seen
them become must-buy
items.
In consulting the
parallel is the ''next
big thing" for
businesses to address -
think combating Y2K
issues or the rush to
become e-enabled at the | |
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| | turn of the Century; or
more recently the
stampede to outsource
non-core business
functions. Yet nothing
is really on the horizon
to take up the reigns -
RFID technologies and
mobilising data for the
workforce are seemingly
small developments by
comparison.
The economic
climate. Which brings
us to the economic
climate and the
disposable income
available for certain
types of purchases.
There is little to be
gained expanding on this
point here. But suffice
it to say that in the
coming 18 months modest
and steady growth is
looking more likely than
economic boom, so
consulting growth is
unlikely to be boosted
by a sudden wave of
corporate feel-good
factor.
Rising investment
in sales. The last
consideration is the
sales effort being
funneled into a
particular sector, for
without doubt all
sectors have an active | |
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| | demand level dictated by
the two previous factors
- and a latent demand
that if suitably stoked
will ignite. It is here
that pronounced
structural shifts in
consulting could help to
propel the industry into
2OO6 and beyond.
Arguably the demand
for consulting services
is swayed considerably
by the sales effort
being deployed in the
industry. Two new
sources of sales impetus
have emerged this year
to propel our market
further. Firstly the
unmistakable resurgence
of accounting firms as a
force in the consulting
market. When the
combined partner-level
talent of KPMG, PwC and
Ernst & Young all set
their sights on a return
to consulting, you can't
help thinking
opportunities will be
uncovered - and clients
sold - on consulting
engagements they would
otherwise not be
contemplating.
Look at the
recruitment activities
and recent press
statements of these | |
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| | accounting firms and
their intention is
clear. Deloitte has
shown that accounting
and consulting brands
remain a good fit - and
with non-competes now
out of the way we can
expect the other majors
to make big inroads into
the sector this year. So
the sales effort
targeted at consulting
clients is going to
swell considerably.
However, equally
important (though often
overlooked) is the
proliferation of
spin-off consultancies -
new entrants to our
market that are out
there offering a range
of differentiated
services and all the
while multiplying the
sales effort being
deployed by the
consulting sector.
Another major trend of
the last 3 years has
been the rapid emergence
of new consulting
brands, formed by teams
of consulting
professionals leaving
the major firms to go
out on their own. These
firms are now at the
stage in their growth | |
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| | where they are expanding
rapidly and
professionalizing their
sales approaches. Again,
a significant rise in
sales effort is the net
outcome.
The exciting
implication for the
consulting world is that
sector revenues will now
inexorably rise - with
or without either of the
first two stimuli coming
into play. Investment in
the consulting
salesforce has
inadvertently
accelerated through
these structural shifts
and will now foster
growth in our sector as
a whole. Our prediction
is for revenue growth to
hit at least 10% these
next 12 months, with
obvious knock-on
benefits for those
looking to secure a job
in consulting in the
coming months. Feedback
from the IMC conference
earlier this month
suggests few in the
sector would argue with
this figure, so 2006
looks set to become a
vintage year!
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