Spanish consulting market grows for fifth consecutive year

06 June 2018

The improving Spanish economy has boosted its consulting market growth to over 7% – lifting its total value past €1.4 billion in 2017 – however political turmoil means this may falter in the coming months. The consulting market has been on a rapid road to recovery since a crash in 2011, when a number of Eurozone economies flagged amid a second recession, but now Spain’s consulting sector is expanding well beyond its 2011 value.

In 2017, analysis estimated that Spain’s management consulting industry had grown by around 6% during 2016 to reach a market value of €1.3 billion. Having declined by a dramatic 3% between 2011 and 2012, the consulting sector of Spain has since recovered thanks partially to firms finally making a concerted effort to expand their footprint to other Spanish speaking markets, exporting particularly prolifically to Latin America in particular, with Spanish firms and their clients feeling a historical and cultural tie to them, as well as a linguistic one. A year on, the tactic seems to have paid further dividends, as Spain’s consulting scene has upped its growth rate to 7.6%, according to data from Source Global Research relating to management consulting work done by mid and large-sized consulting firms (those with more than 50 consultants) carried out on behalf of mid and large-sized clients.

The impressive results of 2017 now see the value of the Spanish consulting industry recording annual revenues of €1.42 billion, towering above the value recorded in 2011, before its last period of decline, of €1.13 billion. The move may come to be seen as particularly shrewd, as consultancies look to insulate themselves from the uncertain state of the economy and political culture of Spain in 2018 – something which may impact on future growth, as businesses once again bed down into ‘wait and see mode’.

In 2017, growth in the Spanish consulting market was primarily driven forward by financial services which, along with retail, was one of the only sectors to experience double-digit growth. As many financial institutions weigh up their future in the potentially isolated post-Brexit UK, the increasing maturity of Spain’s FinTech scene has attracted fresh attention from companies considering relocation, and pushed incumbent players to improve their use of technology in their engagement with customers.

Size of the management consulting market of Spain

Zoë Stumpf, Head of Consulting Market Trends at Source Global Research said of Spanish consulting’s performance, “The consulting market in Spain really is going from strength to strength with both consulting firms and their clients now embracing the opportunities presented by new technologies, such as robotics, to change the way they operate.”

Meanwhile, in retail, bricks-and-mortar clients invested in omnichannel to fight back against online-only competitors. Mirroring trends already present in the bulk of major consulting industries, Spanish firms have subsequently already seen a boost to their digital transformation lines partially thanks to this demand from clients in the retail sector, keen to avoid losing market share to ecommerce – something which has led to the decimation of British high streets in early 2018. Digital transformation consulting is now worth $44 billion globally, largely thanks to this fear factor – and Spain’s consulting economy will likely continue to benefit from this into 2018 and 2019.

In terms of service lines of the consulting sector in Spain, this meant that technology remained the largest line by some distance, despite the risk and regulatory segment seeing double figure growth in 2017. As pressure on budgets eased amid a buoyant Spanish economy and clients took the opportunity to transform neglected business models and processes – digital work took off. Data & analytics and robotics demand likewise continued to mature, while AI remains at an experimental stage – though this leaves the market with room to grow into in the near future.

Possible issues

While the Source research seems geared toward a prosperous future, however, there is still some cause for concern, as Spain is by no means immune to the geopolitical instability that is spreading across EU member states. While Britain continues its turbulent march toward Brexit, polls in Italy, Austria and Hungary have each returned results favouring populist Eurosceptic parties.

In Spain, while the political outcomes vary, with left-wingers and centrists set to be the chief beneficiaries of on-going constitutional mayhem, the one constant is that businesses face an uncertain future in 2018 and beyond. The ousting of former prime minister Mariano Rajoy in June 2018 plunged the country into yet another political crisis following gridlocked elections in 2015 and the disputed Catalonian independence referendum two years later. Spain faces the further uncertainty of fresh elections unless Socialist leader Pedro Sanchez can cobble together a working coalition or minority government. 

Elsewhere, price pressures continues to blight the market thanks to a lack of large clients and the resulting intense competition for work among smaller companies which will not pay the same amount for consulting work. As a result, growth rates in 2018 are not expected to match 2017, as a certain amount of pent-up demand dissipates together with concerns about the impact of the political turmoil of the nation. This is not to say that growth will not remain strong across the board, driven by persistent demand around digital, but it will likely be less explosive than it was in 2017.

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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.