The top reasons why UK clients hire management consultants

28 January 2019 Consultancy.uk

UK business leaders have outlined efficiency savings, Brexit and the drive for digitalisation as the chief reasons they will hire consultants in the coming months. According to the new survey from the Management Consultancies Association, close to half of businesses still seek external expertise on efficiency, as they look to tighten their belts ahead of uncertain economic times.

The UK’s consulting industry is the second most mature in the world behind the United States, and is currently worth around £10 billion according to the latest estimates available. The size of the market is not necessarily surprising, given the importance placed on tapping external expertise by various research pieces, however, with the UK economy slowing amid a productivity crisis and the impending completion of the Brexit project, many companies are looking to cut costs.

Ultimately, when asked to define consulting, clients chose answers involving one of two factors. 35% said that it was either down to transformational support, or external strategic advice. These two broad areas straddle the key issues faced by the clients of consultants in the UK at present; the uncertainty of the UK economy following a raft of unknowable geopolitical changes, and the challenges presented by digitally capable competitors. This is precisely why, for now at least, the UK consulting sector is still able to post higher growth figures than the broader British economy, despite pricing pressures.

Emerging business challenges among buyers of consulting services

Amid a flurry of public scrutiny on the costs of advisory work, many clients are looking to make savings. Conversely, however, one of the leading business challenges that clients look to pay consultants for advice on is efficiency. According to a poll of 250 UK industry decision makers across the public and private sector, performed by the Management Consultancies Association (MCA), 47% of businesses still seek external expertise on efficiency, suggesting that despite the need to cut costs, many businesses still conform to the received wisdom that money spent on consultants is dwarfed by the amount they can earmark in long-term savings.

What clients want

At the same time, Brexit continues to drive growth in the consulting sector. 40% of respondents said the UK’s protracted divorce from the EU had been a factor in pushing clients to tap management consultants. The continued uncertainty surrounding the outcomes of the two-year negotiation period, which remains deadlocked less than two months from Brexit’s realisation, means many firms are unsure of how to best prepare for life outside the EU.

The third key offering clients are looking to hire management consultants for is the deployment of digital technologies. Digital transformation consulting has boomed to a global market size of $44 billion, and it is likely to continue this explosive growth in the coming years, as clients look to innovative new technologies to find long-term savings and improve the efficiency and productivity of their business models.

Business needs requiring management consulting services

If consultants in the UK industry are to maintain their successful growth figures amid the coming period of economic uncertainty, they will need to keep one eye trained on the emerging business needs of tomorrow. However, unsurprisingly, the MCA’s study finds that the largest number of consultants anticipate digital and technology advisory services will maintain top billing in the immediate future. Just five points behind on 33% each, both business transformation and strategy advice services link into this, as do change management (30%) and process improvement (29%).

The future

With 80% of respondents indicating that that technological and digital disruption pose a significant threat to businesses in the coming years, there is a significant difference between its perceptions in each sector. Financial Services, Digital & Technology, and Manufacturing verticals see tech changes and disruption as posing a bigger threat than all other business verticals. Generally, the private health and life science segment seems least worried, although it featured the highest percentage of respondents that indicated tech change and disruption as ‘critically important’, at 15%.

Commenting on the findings, MCA CEO Tamzen Isacsson said, “UK's consulting industry is well equipped to assist businesses with future challenges.” The news comes shortly after another analysis found that 8 out of 10 UK companies that hire consultants are satisfied about the value they have received. “We’re encouraged by the feedback from business leaders about the value of consulting to organisations across the public and private sector."

Related: How do buyers of consultancy services find consulting firms?


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