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

18 April 2019 Consultancy.uk

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.