In its Annual Report 2017, the MCA (Management Consultancies Association) examines the revolutionary changes impacting the consulting industry and its clients.
The Report is the definitive analysis of around 50% of the fee income of the UK consulting industry, a sample of around £4.46bn in size. The sample includes PwC, Deloitte, KPMG and IBM, as well as many big consulting practices in technology and infrastructure firms, and specialist consulting practices.
The data reveals that in 2016, the UK’s world leading consulting industry saw a 4.76% growth in fee-income. Niche specialist firms grew substantially faster than any other type (20%) including pure consulting firms and audit firms. While the large firms have the largest share of consulting revenues (78%), they grew by 4% while medium-sized firms grew by 6%.
The MCA analysis shows that the growth of niche specialists and the success of some medium-sized consulting practices is attributable to specialisation and differentiation in response to client demands for expertise.
The report also shows how consulting firms are digitising not just in response to client demands, but also in their own operations. Digital consulting remains the largest area of specialised consulting advisory at 28%. Consultants remain at the heart of the digital value chain, providing advice on AI, data analytics, automation, the Internet of Things and ‘disruptive’ techniques right across sectors. Indeed, the data shows that consultants provide substantial amounts of digital advice to digital and technology companies, revealing that their insights are regarded as cutting edge even by the experts.
Consulting continues to operate in important UK sectors. Financial services, a sector of huge strategic significance, retains the largest share of consulting fee income at 29%. Consulting activity in retail and leisure, where the UK is a leading centre of innovation, grew by 24%. Consulting also remained strong in energy and resources and grew for the second year running in its contribution to private health and life sciences.