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  Richard Stewart, Managing Director at Mindbench, examines the emergence and success of smaller consulting firms and the growth of the larger consulting firms, fuelled by data-analytics related services.

Mindbench: Trends in management consultancy

At Mindbench we advise consulting firms on their talent agenda and help consulting professionals with their career aspirations. We have a privileged position from which to witness trends in the consulting market.

Here we briefly examine two trends we have seen develop over recent years – the emergence and success of smaller consulting firms and the growth of the larger consulting firms, fuelled by data-analytics related services.

Specialist smaller consulting firms emerge and grow

Back in 2003, when we set Mindbench up, the consulting market was severly disrupted. The internet crash and the end of Y2K projects led to a brief downturn. This loss of direction was compounded by the separation of KPMG, E&Y; and PwC’s consulting business.

Several senior consulting professionals decided to leave their firms to launch their own consulting practices focussed on a specific sector or functional area.

Many of these smaller consulting firms honed their specific propositions, built a solid client base before 2007, then survived the recession and went on to become thriving mid-size consulting firms. Other smaller firms that use a particular data driven application have also emerged over recent years.

From a candidate’s point of view, the appeal of smaller firms is usually the potential for accelerated career progression, more specialised work and (often) reduced travel requirements. One of the smaller consulting firms we work with specialises in the procurement of health services for local authorities. High calibre consultants are attracted to the firm by the opportunity to make a hands-on difference in social welfare provision and by the conscious choice of the directors to work only on London centric projects.

Consolidation of the consulting market place by the “Big Four” and the growth of “business intelligence” consulting services

Since 2010, the pace of consolidation occurring amongst the largest consulting firms has accelerated dramatically. The “Big Four” in particular have seen consulting as the major growth driver for their firms over traditional audit or tax services, and have developed internal processes to enable premium offers to buy consulting assets.

Rather than just extending numbers of consulting professionals, many of the consulting acquisitions have helped firms expand their capability into rapidly developing areas such as procurement & supply chain, business intelligence, and mobile applications.

Recent notable acquisitions by major consulting firms

Firm acquired Function of acquired Acquirer Year
Ariba Sourcing and procurement Accenture 2010
DiamondCluster Management and technology PwC 2010
Core Metrics Web Analytics IBM 2010
Netezza Data Analytics and warehousing IBM 2010
PRTM Supply chain PwC 2011
i2 Data Analytics IBM 2011
PRTM Supply chain PwC 2011
Emptoris Procurement software and analytics IBM 2011
Xantus IT transformation KPMG 2011
Cataphora (E-discovery division) Business Intelligence Ernst & Young 2011
ISA Consulting Business Intelligence Ernst & Young 2011
Oco Business Intelligence, Analytics Deloitte 2011
BrainNet Supply chain / procurement KPMG 2012
Ubermind Mobile Applications Deloitte 2012
IE Discovery Knowledge management and information security Deloitte 2012
Neo Metrics Data Analytics Accenture 2012
Work Light Mobile Applications IBM 2012

______________________________________________________________________

The growth of business intelligence services has been driven by the explosion in the volume of customer and corporate information, produced through increased use of the internet, together with technology that allows the collection and analysis of complex data. Consulting services now include data storage and security, data integration, software application development, data mining and decision support. Business intelligence is being used to underpin customer management, marketing, finance, sourcing, and risk offerings.

One of our specialist clients is using diverse data sets and data analytics to help a major high street bank with liability provisioning. Another client uses data analytics to help a major auto manufacturer understand the resale market better through data collection at forecourts.

I was recently talking to a consulting client that provides advice to the retail sector using transmissions from mobile phone signals. They can track people moving around stores in order to help shop and mall owners decide on store and product positioning.

The skill sets required are varied depending on the focus and include modelling, synthesis, programming (in a range of languages), data architecture, marketing, branding, and procurement.

 
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