10 largest management consulting firms of the globe

15 June 2015 Consultancy.uk

Deloitte Consulting, PwC / Strategy& and EY Advisory are the largest consulting firms of the globe, reveals new research by Gartner. The Big Four accounting and consulting giants together hold 40% of the market, with the top 200 firms globally distributing nearly 80% of the $125 billion advisory market.

Every year Gartner, a global analyst firm, conducts research in the state of the consulting industry. Its latest edition of the so-called ‘Market Share Analysis: Consulting Services’ looks into the development of the consulting market, as well as the market shares of the most important players in the landscape*.

The analysts find that globally spending on management consultants has grown to $125.2 billion in 2014, up 6.1% from $118.1 billion in 2013**. The top four largest consulting firms, all with a heritage in the accountancy sector, known as the Big Four (Deloitte, PwC, EY and KPMG), hold a combined 40% of the total consulting market. Compared to a decade ago the Big Four firms have significantly increased their market share, through organic growth and dozens of acquisitions. The top 10 consultancies account for 52% of the market, while down the line the top 200 service providers with consulting services hold 79% market share, suggesting a non-fragmented and consolidating market according to the analysts.

Global Consulting Market

The largest consulting firm

Deloitte Consulting ranks for the fourth year in a row as the largest consulting firm of the globe. Deloitte's top position is the result of two key reasons: it is the only one of the Big Four that did not divest its consulting practice between 2000 and 2002, in addition Deloitte can build on the broadest palette of advisory services compared with its peers, in particular when it comes down to implementation services***. PwC has gained major terrain through the acquisition of Booz & Company last year for a reported $1 billion fee, the strategy & operations consultancy now rebranded as Strategy&. EY's robust consulting growth was a combination of organic and inorganic growth. It has also fortified its resources, repositioned its strategy approach and eradicated challenges that membership firms typically face when ramping up global and regional resources.

KPMG maintains its fourth position. In 2014, KPMG's consulting service revenue was $10.7 billion, up 5.2% compared to 2013 ($10.2 billion). Its consulting strengths lie mainly in its business consulting services, although KPMG Capital has helped focus the firm in directing its investments into focused solutions, such as security, risk, and data and analytics.

Top 10 largest consulting firms of the globe

Accenture moves up one position to fifth. Accenture's consulting profile has according to Gartner a balanced mix of a business and technology consulting service portfolio, with its key strength in the “cohesive approach” it maintains when selling to its clients. The analysts also highlight Accenture’s successful strategy in building a high-end advisory practice, known as Accenture Strategy, to complement its Digital, Technology and Outsourcing units.

IBM drops one position to sixth, driven by sluggish or even negative growth across all service segments. IBM's consulting revenue (IBM GBS) was $3.99 billion in 2014 and $3.91 billion in 2013, its consultancy profile however leans heavily toward technology consulting.

McKinsey & Company – the globe’s largest strategy consultancy – retains the number 7 position in management consulting services. The firm's business is predominantly in the corporate and business consulting service arena, although it has in recent successfully adapted its model to include many new service lines in the technology space, such as McKinsey Advanced Data & Analytics, McKinsey Digital, McKinsey Implementation, McKinsey Recovery & Transformation Services and McKinsey Solutions.

Also Booz Allen maintains its position, realising the overlarge majority of its $2.0 billion revenue in North America, with some business in the Middle East, North Africa and off late in Asia. A large part of its clientele is in the U.S. federal government space – Gartner estimates that 98% of its consulting revenue is from the government sector. The negative growth rate of 2.9% is the consequence of  cutback spending from the U.S. government sector.

Number of Acquistitions per top 10 consulting firm

CGI moves into ninth position, with a consulting growth rate of 3.4%. The acquisition of European-based Logica in 2012 has played a major part in driving its global consulting revenue to its $1.5 billion. CGI is according to the analysts making strong inroads for digital business and the Internet of Things, while clearly understanding that security concerns need to be at the forefront.

The top 10 is concluded by CSC, which drops from ninth last year. The consultancy has a stronger lean toward technology consulting services, and can build on a “relatively sound” consulting business in the operations area. CSC's consulting service revenue was $1.41 billion for 2014 and $1.46 billion in 2013, with a slowed growth rate for 2014 of -3.6%.

Looking ahead

Going forward Gartner highlights that business models of consulting firms will continue to change as consultants stretch to redefine, reposition and differentiate their go-to-market approaches, capabilities and skills, and embrace new strategies to compete in the new world of digital. “A consulting firm's appetite for change, whether they are ready or not, has to be ravenous; otherwise, they will lose revenue and be out of the consulting game faster than expected. The need for a faster speed to change is no longer an option”, conclude the analysts.

Related: The 10 largest consulting firms in the world (2017 update).

* For the analysis Gartner assessed the revenue in the area of business consulting and technology consulting services. The total revenue of firms can be (significantly) higher. In addition, Gartner's analysis highlights a select number of vendors. For example, with a total revenue of roughly $4 billion BCG would qualify for the ranking, the Boston-based strategy and management consultancy was however not part of Gartner's scope.  

** Note that analyst firms have different definitions for assessing the size and value of the consulting market. For example Source estimates the global consulting market to be worth just over $100 billion, while Kennedy believes the market is worth more than $230 billion. See the page Global Consulting Market for details. 

*** EY sold its consulting practice to Capgemini, PwC Consulting was divested to IBM while KPMG Consulting continued as BearingPoint. The consulting practice of the fifth major accounting network at the time, Arthur Andersen, was following independence rebranded as Accenture.


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.