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The management consultancy market is currently
enjoying boom conditions. In 1997, the combined revenues of the largest
consultancies rose by 20 percent, with a rise in UK sales as well as increased
activity in the rest of Europe.
Key Note estimates that the market is worth
£6.33bn, including outsourcing. The market breaks down into nine market
sectors: information technology (IT); corporate strategy and organisation
development; production and services management; financial and administrative
systems; project management; human resources; economic and environmental
studies; marketing and corporate communications; and outsourcing. The largest
of these sectors is outsourcing (which is sometimes seen as adjacent to the
consultancy market rather than inside it), followed by IT, and then by strategy
and organisation development.
During 1997, the high growth sectors were
outsourcing, production and services management, and project management.
Marketing and corporate communications have had minimal growth as sources of
consultancy income, but have been an excellent market to advertising agencies
and public relations firms.
Indeed consultancy sectors, such as marketing and
IT are served by a multiplicity of professionals. Management consultants only
occupy part of the market, meaning that the market is actually larger than is
usually realised.
The market is served by a wide variety of
suppliers, including large international consultancies, IT companies,
medium-sized specialists, and thousands of small firms and sole practitioners.
Accountancy-based firms and IT-based companies dominate the top 15
consultancies.
There has been more consolidation in the industry, the most obvious example being the merger of Price Waterhouse and Coopers & Lybrand, in July 1998. Meanwhile, the major IT companies, such as IBM, Cap Gemini and Sema are all planning to grow their global consultancy businesses. Another key trend has been a greater accent on education and training, with many new courses and degrees on consultancy, as well as several initiatives from the Institute of Management Consultancy (IMC).
Text © 1998 Key Note
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Last updated by Duncan Nottage 5th March 1999