Consulting markets of Germany, Switzerland & Austria grow to €8.7 billion

05 December 2016

The consulting industry of the German speaking countries – Germany, Switzerland and Austria (DACH) – has grown by over 6% last year to a size of €8.7 billion. Financial services remains the region’s largest industry for consultants, while strategy consulting is the market’s most important service. The strong growth, in combination with the high share of high-priced consulting work, makes DACH the globe’s most attractive consulting market.

Every year analysts from Source Global Research (Source), a UK-based analyst firm that specialises in the management consulting industry, conducts research into the development of the DACH consulting industry. The firm’s latest analysis, which focuses on the top segment of the consulting industry (mid-and large-sized consulting firms with more than 50 consultants), shows that the German speaking landscape has seen strong growth in 2015 and is forecasted to end this year on a high as well.

Industry drivers

The firm’s data estimates the DACH consulting market to be worth €8.7 billion, up 15% since 2012, when the industry for advisory services was said to deliver €7.5 billion in fee income. Germany is with a value of just under €7.5 billion – roughly 7% of the global consulting industry – by a distance the region’s largest consultancy space. Including the turnover of small consulting firms and boutiques, as well as the consultancy contractor market, the country’s market is, according to the BDU (the German association for consulting firms), worth over €27 billion.

Germany was, on the back of strong demand for financial services and manufacturing consultants, also DACH’s fastest growing region in 2015, booking growth of 6.5%, compared to 5.7% for Switzerland (growing to €943 million) and just 2.9% for Austria (growth to €265 million).

Size of the DACH Consulting Industry

Austria’s poorer performance can for a large part be attributed to its exposure to volatility from Eastern Europe and Russia. Eastern Europe, a market valued at €1.1 billion, saw its growth rate drop by 0.6% in 2015, while Russia’s consulting market faced a double-digit decline (-13%) to a total size of €450 million, with political turmoil and economic uncertainty putting a brake on consulting spend.

In the period between 2012 to 2015, DACH’s consulting market has seen more than €1 billion added to its total, the overall performance was buoyed by the two main sectors, financial services and manufacturing. Financial services grew by 7.1% to €3 billion in 2015, on the back of 8.3% the year previous, while manufacturing realised 8.9% growth to €2.2 billion last year, 1.1% above the level of the year previous. “Manufacturing spend on consultants was mainly driven by the automotive industry, which makes up almost half of the total manufacturing market for consulting across the DACH region – together with a significant and growing interest in Industry 4.0”, explains Edward Haigh, Director of Source Global Research.

Although the pharma & biotech consulting market represents a relatively small market in DACH, it was the fastest growing industry in 2015 from a consulting perspective – up 10.4% to €275 million. A myriad of pressures on pharma companies, including consolidation and regulation, were strong drivers of consulting work in the sector.

Size of the German Consulting Industry

Service areas

In terms of service areas, strategy consulting remains to be the largest service in the German, Swiss and Austrian market, growing 6.1% to €2.8 billion. Risk & regulation was the fastest growing service – up 8.9% to €707 million, lifted mainly by growing concerns around cybersecurity. PwC’s 2016 CEO study for instance found that cybersecurity – digital crime which caused more than $400 billion in damages globally last year – today ranks as one of the top priorities of executives globally, with another study, by KPMG, finding that CEOs globally are significantly ramping up their spending on technology frontiers to counter the threats of digital intruders.

Industry 4.0, which for the most part sits within the manufacturing and industrial sectors, is another functional area that is enjoying strong demand. The researchers highlight that while consulting spending on Industry 4.0 in recent years has focused on strategic work, roadmaps and the development of concepts, in 2015 a large chunk of fee income came from consulting engagements aimed at helping companies get to grips with the practical aspects of Industry 4.0 – moving from theoretical, strategic discussions to turning these ideas into reality. Going forward Industry 4.0 is forecasted to remain a driver of growth for external support – a recent Strategy& report highlights that investments needed to adopt Industry 4.0 will boom to $4.5 trillion to 2020, with consultants specialised in helping organisations design and implement Industry 4.0 solution set to play a key role in the ecosystem.

This drive towards digital saw technology consulting services grow by 8.2% to €2.4 billion. At the same time, there was a continued fall-off in ‘traditional’ technology work, such as SAP and ERP initiatives – and the work that was available tended to be at the more commoditised end of the spectrum with high levels of competition continuing to push down prices.

Size of the DACH Consulting Industry - by segment

As part of its trend analysis, the report by Source highlights that consulting firms are increasingly using Eastern Europe as a nearshoring location for commoditised activities, displacing hubs in Asia, such as India – thanks to geographical proximity, linguistic capabilities, and the availability to relevant sector and functional experience. Further, large consultancies are increasingly wanting to convince clients they can do everything in order to win large, much sought-after transformation projects. However, at the other end of the spectrum, despite their desire for simplicity and accountability in working with consultants, clients remain careful about the idea of a one-stop shop. Mid-sized and smaller consulting firms are responding to the need for multi-disciplinary services by forming partnerships with other firms as a way of bringing together different capabilities to create the best of both worlds.

Most attractive consulting market of the globe

A comparison of the DACH’s consulting fundamentals with other fifteen major markets shows that the region can call itself the globe’s most attractive consultancy market. Source assessed four criteria – talent, growth prospects, average revenue per consultant, and propensity to buy – and concluded that DACH’s score puts Germany, Switzerland and Austria combined well ahead of Australia, the UK, the US and the GCC. The DACH region stands out in average fee income per consultant, because high-priced consulting work represents a much higher proportion than it does elsewhere, although even on a like-for-like basis average revenues in the DACH region still top the table.

The analysis in addition highlights that in DACH there is a relatively good supply of high-quality talent and that clients show a strong propensity for using external support, despite an also above average tendency to create their own internal consulting divisions.

Most important consulting firms

The DACH consulting market is dominated by dozens of familiar names globally, including the likes of the Big Four, the large American strategy consulting firms (McKinsey & Company, The Boston Consulting Group, Bain & Company, A.T. Kearney and Strategy&), as well as consulting household names such as Accenture, Capgemini Consulting, Oliver Wyman and Arthur D. Little. Detailed market share numbers of the complete landscape and top players are not fully available; the region hosts several sources that shed light on (parts of) the industry, including analyst firm Lünendonk, business magazines Manager Magazin and Wirtschaftswoche, studies from Dietmar Fink and Frank Höselbarth, as well as rankings from Handelsblatt and the BDU.

In a bid to understand which players lead the pack, builds on data from a recent study by Statistica and brand eins Wissen, which asked consultants and clients of consulting firms (1,600+ respondents) to rank firms on quality across 13 sectors and 18 advisory categories*. In total 293 consultancies made the 2016 edition of the list, with those mentioned representing the firms with the broadest and/or most recognised service portfolio. Accenture ranks as the most cited consultancy, holding positions in 31 categories, followed by four consultancies with 30 nominations: McKinsey & Company, German-origin Roland Berger, The Boston Consulting Group and Deloitte (which includes both Deloitte Consulting and Deloitte Financial Advisory Services).

20 most important consulting firms in Germany

The top ten further hosts two strategy consulting firms, Bain & Company and Strategy&, two more Big Four counterparts, EY and PwC, and Capgemini Consulting. The ranking includes, aside Roland Berger, four more consulting firms that were established and are headquartered in Germany: Horváth & Partners, Kienbaum, zeb.rolfes.schierenbeck and Q_Perior.

Top 10 German-origin consultancies

The revenues of the ten largest German-origin consulting firms shows, not surprisingly, that Roland Berger is the largest player – the Munich headquartered consultancy, established in 1967, has over 2,300 professionals globally, generating revenues of €560 million. The firm, led by the Frenchman Charles-Edouard Bouée, has an ambitious strategy however, with plans on the table to triple in size in the years to come. In comparison, A.T. Kearney has over 3,800 staff globally, Bain & Company has 6,400, The Boston Consulting Group over 12,000 and market leader in the strategy segment, McKinsey & Company, around 20,000.

The new number two of consulting firms founded in Germany is Simon-Kucher & Partners, a specialist in strategy, sales and marketing. Simon-Kucher has seen impressive growth in recent years, managing to triple its revenue over the past decade, and it too has set bold plans to bolster its position in the high-end segment of the industry. 2015 – a year which marked its 30th birthday – was a record year for the firm, led by co-CEO’s Georg Tacke and Klaus Hilleke, and this year Simon-Kucher is well on track to achieve its €240 million target.

Top 10 largers German-origin consulting firms

Number three is financial services specialist zeb.rolfes.schierenbeck, number four is Horváth & Partners, with the top five closed by KPS, a player that gears its services to the industrial and retail sectors. One of the largest growers in the top ten, d-fine, is found on the sixth place, followed by Kienbaum, Q_Perior, Porsche Consulting Group (another firm that saw impressive growth in 2015) and goetzpartners.


Looking ahead, the analysts forecast that the DACH region will face another solid year. “Despite nervousness around global political volatility, DACH consultants are remarkably optimistic about the coming year”, says Haigh. German consultants are the most optimistic, backed up by the strongest economic indicators and continued growth in financial services and further momentum behind Industry 4.0. Although concerns in Switzerland remain around the stubbornly high Swiss franc, consultants in the country are confident that they will be able to use innovative means to continue finding work until the storm passes. Austrian consultants expect the lowest growth rate of the bunch, although they are sensing a slight upturn in their fortunes.

“Despite plenty of potential threats bearing down on the DACH consulting market, whether in the form of Brexit and its wider impact on the EU, currency issues in Switzerland, or Austria’s exposure to a troubled market to the East, the region continues to be attractive for consulting firms”, remarks Haigh. He nevertheless points out that it will be unlikely that the DACH consulting market will be able to sustain its high growth rates over the next couple of years. “The DACH region is probably near the zenith of its growth potential for the time being.”

* Note that the ranking by Statistica and brand eins Wissen is focused on the German consulting market.

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Accenture's push into the creative sector is an identity crisis

18 April 2019

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.