Management consulting market summary
Regardless of whether the pandemic lingers, re-emerges in the second half of 2020 or significantly subsides, TBR expects consultancies will benefit from opportunities created by the chaos of COVID-19, such as uneven responses from government authorities around economic fallout, pandemic protocols and continued uncertainty throughout 2020. Vendors with greater scale, more established technology-centric brands, and deeper partnerships with cloud and software providers will weather the crisis and alleviate pressures on front-end management consulting by price-conscious clients that demand flexible payment terms. TBR expects management consulting revenue growth for the benchmarked vendors to decelerate to 3.5% year-to-year in 2020 but to continue to outperform revenue growth for the benchmarked IT services vendors.
Every part of the global economy, including the IT services and management consulting markets, are experiencing serious disruptions from the global COVID-19 outbreak. Countrywide lockdowns and changes in travel and personal interaction to limit the spread of the virus, have forced changes in human resource management for vendors and their clients, some short term and some likely permanent. Macroeconomic uncertainty due to the pandemic is pushing clients to re-evaluate their spending and shift their priorities from high-touch, large-scale strategic transformational discussions to tactical run-the-business and price-competitive managed services opportunities.
Benchmarked vendors in the management consulting segment increased revenue 7% year-to-year in 2019, a growth trend that continued to surpass that of benchmarked IT services vendors in TBR’s IT Services Vendor Benchmark, which expanded 1.9% year-to-year in 2019. The Big Four vendor group remained the largest revenue contributor at 55.8% of benchmarked revenue in 2019; however, strategy-led vendors increased their market share by 10 basis points year-to-year to 28%. Big Four and strategy-led firms are expanding their intellectual property assets and managed services capabilities to position as business advisers with holistic service capabilities.
The Management Consulting Benchmark provides key service line, regional, vertical and operational data and analysis for 13 leading management consulting firms. The research program also includes a deep dive into 11 vendors’ business strategies as well as SWOT analysis.