Traditional management consulting grows by 16% to £5.4billion, according to the ‘The UK Consulting Industry 2006/7’ Report
22/05/2007
A new MCA Industry Report, published 15 May 2007 has found that traditional management consulting [1] increased by 16 per cent to £5.4billion [2] from the previous year as client satisfaction levels remain high. The report also found that the largest industry sector was financial services, increasing by nearly a third (31 per cent) to £1.1billion; way ahead of the next biggest sector, Services [3] (£701million).

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The new report, ‘The UK Consulting Industry 2006/7’, published by the MCA in conjunction with PMP and IRN Research also draws on independent research across 80 client side organisation directors and project managers; finding that the majority (88 per cent) were either satisfied, very satisfied or impartial with the results of management consulting projects.

This satisfaction has been driven by a combination of factors including: the professionalism with which the consulting firm managed the project; the way in which the individual consultants conducted themselves and the results achieved.

This publication is sponsored by Maconomy.

For the second year running, the report found that the steepest growth sector has been in manufacturing and construction, up by 49 per cent to £578million. This is now a definite sign of a consulting uplift within this sector, with the best markets for consultants in electrical engineering, pharmaceuticals and biotech and consumer products.

Service Line Growth Areas

The new report also identifies the key service lines within management consulting. These included IT consulting (up 24 per cent on 2005 to £1.5billion), programme and project management (up 20 per cent to £1.1billion) and operations (up by 46 per cent to £613million). Financial management consulting continues to boom: up 28 per cent from £324million in 2005 to £415million in 2006.

Andrew Crowley, Vice President of Financial Services EMEA, CSC Computer Sciences and MCA President 2007/8 commented: "The consulting industry in this country enjoyed another year of healthy growth in 2006, with financial services, telecoms, transportation and energy sectors all growing substantially. MCA member firms continue to help organisations improve their operational performance, realise the benefits of their investment in technology, respond effectively but efficiently to regulatory changes and get more from people they employ."

MCA members collectively employed just over 18,000 fee-earning management consultants in 2006, an increase of 26 per cent on 2005. Despite the huge growth in the number of consultants, the ‘war for talent’ remains consulting firms’ biggest complaint and a shortage of good staff its greatest constraint.

Fiona Czerniawska, author of the report, and Director of the MCA Think Tank concluded:

"The MCA report shows that client satisfaction remains high amongst buyers of consultancy. Our research has also demonstrated that a high proportion of those satisfied clients credited consultants with helping them do something more quickly than they would have been able to achieve by relying on their own resources making this far and away the most valuable aspect of consulting."

[1] Traditional ‘pure’ management consulting services include strategy; human resources; change management; business process re-engineering; operations; marketing and corporate communications; project and programme management; economic and environmental consulting; and outsourcing advice plus IT consulting.

[2] As fee income from MCA member firms is estimated to be roughly 70 per cent of the total UK consulting industry, the total market for management consulting was worth £7.7billion in 2006. The other 30 per cent consists mainly of firms too small to be eligible for membership of the MCA and independent consultants.

[3] Services include retailing, leisure, media, private healthcare, business and IT services and real estate.

For more information please contact:

David Pippett

Director

Creatrix Public Relations

Tel: 01225 423 400/07899 798 197

david@creatrixpr.co.uk

About this report

The new report, ‘The UK Consulting Industry 2006/7’, published by the MCA in conjunction with PMP and IRN Research has been compiled using statistics provided by MCA member firms, covering the calendar year 2006.

For the first time, the MCA has segmented its member base by type of firm, attempting to show how these groups have fared differently. In this report management consulting covers the following services: Strategy, Human Resources, Change Management, Programme Management, Financial Management, Operations, Business Process Re-engineering, Economic and Environmental Consulting, Marketing/Corporate Communications, Outsourcing Advice, IT Consulting.

The term ‘fee income’ is used throughout the report to denote the UK management consulting fee income of MCA member firms. This represents a change from the data used in previous years, when fee income from IT systems development and outsourcing/managed services were included in the figures. In this year’s report, the focus is entirely on management consulting.