Global energy & resources consulting industry reaches $14.7 billion

14 December 2015

Despite oil prices slumping to their lowest price since 2009, the global energy and resources consulting market has grown by 6% to a value of $14.7 billion in 2014, accounting for 13% of the $115 billion global consulting industry.

In 2012 companies and governments worldwide spent approximately $13.1 billion on consultancy in the field of energy and resources, reveals new data from analyst firm Source Information Services (Source). In 2013 spending grew to $13.9 billion, driven mainly by high demand for technology and operational improvement services. Twelve months down the line the market’s growth has accelerated, picking up to 6% in 2014, taking total spend on energy & resources consultants to an estimated $14.7 billion. Efficiency and cost cutting services were most in demand, with demand for technology and M&A services also playing a driving force as companies look for ways to respond to challenging market conditions. 

The US, which is worth more than $50 billion, almost half of the entire industry, makes up just under half the entire energy & resources market, and in 2014 grew nearly 10% to $6.8 billion. An active utilities sector, a large and demanding energy sector, and newer areas like shale exploration, all of which created opportunities for consultants, were the foremost drivers.The health of the North American market is keeping the overall global picture buoyant,” comment the analysts. 

Global energy & resources consulting sector ($ / billion)

Europe represents approximately one third of the global marketplace*, with the UK one of the largest markets, harbouring just under 6% of global fee income. UK-based consultants have in particular seen demand from cost cutting and efficiency projects – the cost of extracting oil from the North Sea is relatively high compared with other markets around the globe, presenting consultants with an opportunity to help bring that cost down. Long planning cycles also helped to keep consulting work on an even keel and the market grew 6.1% to $816 million in 2014 as a result.

Service areas

Across the globe, regulation is shaping as an increasingly important rationale behind consulting work. The need to adhere to the rising maze of (international) standards is on the rise, and compliance is increasingly complex, with all parts of the energy and resources industry seeing an increase in the number of regulatory requirements. As a result the financial management and risk consulting service line has grown 13% to $3.24 billion in 2014. The authors highlight that it’s not just about meeting deadlines and being compliant, it’s also about reducing the cost of compliance, about process and technology, and even about business strategy.

Another in-demand area is customer excellence. Clients are increasingly turning to management and IT consultants to help them work through what these changes mean for them; many are focused on customer-centric transformation, enabled by the vast wealth of data now available to them. Most are still in the early phases of planning major initiatives however, with the upside that consultants can charge good rates and that pipelines for the coming years are forecasted to remain healthy.

The largest service areas in energy & resources are technology and operational improvement. The former, which spans from IT advisory to IT implementations and IT architecture work, is estimated to represent 30% of the market, while the operational improvement domain takes around 24% of the cut*.


Looking ahead, the analysts believe that consultants, in sync with the industry’s broader ecosystem (which has to date seen 250,000 jobs slashed), are likely to start feeling the effects of low oil prices. So far the low oil prices haven’t caused many clients in the energy sector to slash consulting spend yet, but it is having an impact on where consulting demand is coming from, both within client organisations and globally. In 2016, the tide is forecasted to turn, and growth is expected to decelerate.

Utilities, currently valued at $3.4 billion, is expected to be the stand-out sub-sector going forward, thanks to new competition, regulation, green technology, and smart metering. Smart meters in particular will have a big impact on the European sector as the EU has mandated that 80% of customers should have a smart meter for their electricity by 2020. In Italy for instance the government has already implemented electric smart meters and is now working on the gas roll out, while UK officials are pushing for all households to have one by 2020.

* Data based on Source’s previous report of the energy & resources consulting landscape.


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.