Outlook On Management Consulting Services Spending And Adoption In 2011
First of all, thanks to everyone who contributed to my "What Constitutes A Management Consulting Firm 2.0?" discussion in The Forrester Community For Vendor Strategy Professionals. This discussion has driven quite a bit of traffic (more than 3,600 views), but we’ve gotten just six replies so far, all of them very valuable. Please be sure to contribute to receive a copy of my planned update report on the consulting market.
The identification of future business models is one of the top questions I regularly discuss with consulting leaders. The other, and more tactical question, is about the spending and adoption patterns for management consulting services this year. In Q4 2010, Forrester surveyed 2,691 business decision-makers globally and found that:
- About one-fourth of business leaders expect to increase their spending on consulting services in 2011. At first glance, it sounds like good news, but there are also 22% overall stating that they plan to decrease (5% and more) their spending: Even 40% of business leaders in France and 35% of leaders in the UK are looking to decrease their spending this year. Competition is certainly becoming tougher for consultancies in the established markets as buyers have become much more sophisticated over the past years. Fifty percent of leaders in India, on the other hand, said that they expect to increase (5% and more) their spending, followed by leaders in China (38%), and Brazil (37%). This is not surprising, as all of these markets are still nascent compared to the mature consulting markets in the advanced economies. However, expansion of their presences in emerging markets is a top priority for all consulting service providers; no longer just because of a "follow the client" mentality but also to address the increasing demand of local companies.
- Business leaders show most interest in customer relationship, analytics, and talent consulting services. As the graphic below shows, business leaders are primarily interested in engaging a consultancy for customer relationship management, analytics, and talent consulting projects. Keep in mind that we are talking here not about the underlying technologies but the broader spectrum of business issues, such as supporting marketing and sales transformation programs or advising on customer segmentation strategies. Corporate strategy and enterprise risk consulting are also enjoying solid interest from business leaders, while mergers and acquisitions (M&A) and sustainability consulting services are less in demand. However, M&A projects are predominantly initiated pretty much ad hoc from clients, and sustainability is still something that many companies have just started to embrace. Or, if the companies are more mature, they do not look at sustainability as a separate issue anymore, but as a dedicated part of their overall corporate strategy.
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