Global client spending on analytics consulting hits record $43 billion

11 June 2018

New research indicates that the global analytics consulting market is worth around $43 billion, including both in-house data analytics teams and external consulting costs. Though the US accounts for more than half of the revenue, analytics consulting is evolving quickly as a distinct field in the UK market.

In 2017 the world’s largest corporations spent $43 billion on analytics – a multi-dimensional and evolving field that harnesses statistics, AI and other tools to identify meaningful patterns in large data-sets. The capacity to use analytics can dramatically advance an organisation’s understanding of both its own internal systems and broader trends involving its customers, clients and industry.

A survey from Source Global Research found that 91% of executives believe their company’s use of analytics had “generated substantial value” for the firm. They also revealed that expenditure on spent on analytics consulting was almost evenly split between developing in-house capabilities and contracting external consultants.

More than two thirds (67%) of the executives polled said they expect their organisation to increase analytics consulting spending in 2018-19. This is significantly higher than the 55% who expect a spending increase across the spectrum of consulting services.

Global client spending on analytics consulting hits record $43 billion

It is, however, important to stress that analytics consulting is not generating entirely unique revenue. Instead, with the advance of technology and changes in terminology, consulting projects which may once have been placed in the strategy or supply chain boxes are now part of the analytics puzzle.

For the Director of Source Global Research, Fiona Czerniawska, the advance of analytics consulting both in terms of revenue and annexing other consulting fields, reflects its importance to the industry.

“Many firms have made a significant investment in this space; some would put it at the heart of virtually everything they do”, she said. “Nobody—we think it’s safe to say—is complacent about the opportunities, perhaps the threats, that analytics represent in the future.”

Executives seem far more excited by the opportunities analytics investment can bring to their organisations, rather than worried by the threats. Nine in ten of those polled are keen to measure the impact on new revenue growth. A similarly large majority expects concrete results in terms of cost savings.

“Clients have been investing in this area for years; building teams of data scientists and running experiments,” said Chris Brahm, Global Practice Leader, Advanced Analytics at Bain & Company. “Now they want to know what the benefit is and establish how they take their investment to the next level.”

“In the last few years, we have seen clients start to innovate with analytics pilots and establish centres of excellence. That’s successful to a degree, but they find it challenging to scale things out to the wider organisation. We’re entering a new phase, and it's one where the scalability of analytical capabilities has become much more important.”

Analytics Gold Rush

For Czerniawska, opportunities for consulting firms without considerable analytics pedigree to enter this lucrative market are rife. Her firm’s report concluded that, among corporate clients, little distinction is made between technology consulting firms on the strength of their analytics work. Rather they are concerned with how their consultants plan to leverage analytics to help them achieve particular goals.

Czerniawska points to the ecosystem model as the best hope for non-tech consultancies to advance into the analytics space. Consulting firms without the deep expertise and deeper pockets of IBM or Cognizant should “create ecosystems with less obvious organisations, allowing them to quickly draw on a toolbox of solutions from multiple suppliers and match them to the needs to the client,” she argues.

“Embracing the partnership model means that firms can avoid having to develop their own technology. It also partly mitigates the problem around competition from non-traditional players— from the likes of Google, Amazon, and LinkedIn.”

Whether her advice will be taken up by smaller and boutique consultancies without a substantial tech offering remains to be seen. In the UK one foothold gained by analytics consulting is in the internal audit game, although consulting firm Protiviti still believes the role of Big Data analytics in audit is in its infancy.

Last year PwC UK appointed Neil Hampson leader of its rapidly growing data and analytics team. French technology consulting giant Capgemini now offers a UK-based Analytics Consulting Academy, while specialist firms which concentrate solely on analytics – such as Data Consulting and the recently bought Big Data Partnership – continue to make inroads.


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.