Irish consulting industry expands to €676 million, growth slows to 5%

23 October 2017

The Irish consulting market, worth 676 million, has seen growth slow to under 5% in the last year. Ireland’s industry is advanced when it comes to its engagement with technology, however it is heavily dependent on domestic business, with just 11% of revenue arriving from overseas, making it vulnerable to national economic turbulence resulting from Brexit.

An analysis of data from FEACO, the European Federation of Management Consultancies Associations, and the Institute of Management Consultants and Advisers (IMCA), the professional institute for management consultants and business advisers in Ireland, shows that Ireland's consulting industry is growing, although its momentum has slowed last year.

The Irish consulting sector is projected to continue to expand in 2017. The industry had experienced an explosive bout of growth at 11% leading to 2015, which tapered off to 5% by 2016. The IMCA now projects a further-slowing, with an increase of between 4% to 5% for this year.

The Irish management consulting market (€ / million)

Both Irish exports and the business investment, which surged due to temporary impetus by multinational enterprises, will moderate but remain solid. Activity in the domestic sector will remain firm and employment will grow steadily – however the outlook is complicated by uncertainty surrounding ‘Brexit’. While the Republic of Ireland is entirely independent of the United Kingdom, and as such, will remain within the European Union, negotiations in Brussels have cast into doubt the nature of the Northern Irish border – which many have speculated will become a “hard” border for the first time. This, among other things, will likely have a significant impact on trade between the two nations.

Most independent assessments of Brexit’s implications also suggest an adverse outcome for the UK economy would have clear implications for the Irish economy, as Britain remains a large importer of Irish produce. Exports grew by 13.8% in 2014 and are projected to grow by 8.9% in 2016 and 7.9% in 2017, suggesting trade is already feeling the bite of Brexit. The close economic ties to the UK mean the slowdown in that respective consulting market’s growth will undoubtedly cause concern among Irish consultants and their clients.

According to the Management Consulting Association, the British equivalent of the IMCA, the UK consulting industry grew by just 4.76% in 2016, which is significantly closer to the trend of growth for the economy as a whole than many other mature consulting markets, where the industry is generally growing more rapidly than the national economies.

Ireland's consulting industry has however still managed to outpace the UK over the past two years, expanding 11% in 2015 to €644 million, and a further 5% last year to an estimated value of €676 million.

Ireland’s consulting industry – European benchmark

As consulting has historically been seen to both lag behind economic patterns and to anticipate new trends, with economic recession and growth both being outlined by growth patterns in consulting, a slowing consulting sector suggests firms are preparing for a fall in output by cutting expenditure on external expertise. Not only does this suggest Ireland’s consulting sector may see slower growth in the future then, but that the nation’s economy more generally may well be in line for sustained slowing in the near future.

As Ireland’s consulting sector is much more dependent on domestic trade than many similar economies, this could be exacerbated further. 89% of the sector’s revenue was sourced from clients on Irish soil, and while a portion of Ireland’s overseas revenue will have been sourced from UK clients, who as mentioned are likely to scale back on spending due to Brexit, that means the aforementioned economic turbulence may hit Irish consultants hard. 

The Irish consulting industry - by sector and service

Meanwhile, the Irish consulting market is also one of the most dependent on the public sector in Europe. Only Greece has a larger section of public sector revenue, at 37%, while a quarter of Ireland’s comes from government spending. Despite sustained criticism of the public expense caused by consulting, Ireland’s government have so far managed to maintain its spending levels on external advisors. Should Ireland’s economy enter into further difficulty, during which further austerity cuts were to occur, it is possible that the government will also have to re-evaluate its consulting bill, as a matter of political expedience. In terms of client industries, beyond the public sector, the Consumer & Industrial Products (22%) and Financial Services (21%) segments are largest spending clients in the Irish consulting industry.

An analysis of service line expenditures highlights the predominance of the Operations and Technology segments (30% and 23% respectively), followed by Strategy and People & Change at 17% and 11% respectively. Irish consulting’s technology service line is comparatively well developed, at 23% of the market share, and is in fact larger than respective segments in other consultancy economies, aside from the UK, on 28%. Ireland regularly appears at the head of industry leader lists when it comes to the FinTech and cybersecurity industries, with the consulting sector investing heavily in the region as a result of the technical prowess.

The Irish consulting industry - benchmark by service

Ireland’s expansive Operations service line suggests a large demand for business transformation. 30% of the consulting industry’s clients required these services, which is more in line with the demand of the German economy (40%) than that of the UK (11%). People and Change consulting were the least in-demand services associated with Irish consulting, meanwhile, suggesting technological solutions are broadly being preferred in terms of business transformation, rather than Human Resourcing changes – as businesses look to automation and technology in order to cut costs related to wages, and talent shortages – which have exacerbated these costs across European economies.

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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.