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Management Consultants - Market ReportProduct Type: Market Research ReportPublished by: Key Note Publications Ltd Published: May 2003 Product Code: R310-1230 Description This report examines the UK management consultancy market, which is undergoing major changes. The market only grew by 6% from 2001 to 2002, as conditions in the management consultancy industry have become much more difficult. Management consultancy comprises nine sectors: outsourcing; information technology (IT); corporate strategy and organisation development; financial and administrative systems; project management; production and services management; human resources management; marketing and corporate communications; and economic and environmental studies. Key Note estimates that the value of the UK management consultancy market was £6.94bn in 2002. This excludes consultancy work that concerns overseas clients even if it was negotiated in the UK. In 2002, the major industries for consultancy were financial services, telecommunications and transport. The vast majority of clients came from the private sector. A significant change in this industry is that the large accountancy firms have withdrawn from the management consultancy market, while the global IT companies are becoming ever more dominant. The big consultancy firms are very dependent on IT clients and as a result, the tougher IT market has had a considerable impact on the firms and on the industry as a whole. There have been thousands of job losses among those consultancies that traditionally derive a large proportion of their revenues from the IT sector. Problems in the IT sector were a contributory factor in the many mergers during 2002. The merger of Logica and CMG is an obvious example. The buyers of consultancy work are now much more sceptical and demanding, both in terms of service and price. The collapse of Enron in the US has resulted in negativity across the industry. For the larger IT projects, the major IT-based consultancies will always be ahead because of the sheer scale of their resources, but for other kinds of projects the smaller and medium-sized management consultancies remain very attractive. A clear trend in 2002 was pressure on fee rates. This is expected to continue throughout 2003. Key Note forecasts that the UK market will grow by 4% in 2003, to £7.22bn excluding overseas earnings. Key Note Market Reports
Table of Contents Executive Summary 1. Market Definition report coverage Role of Consultancy MARKET SECTORS Outsourcing Information Technology Corporate Strategy and Organisation Development Financial and Administrative Systems Project Management Production and Services Management Human Resources Management Marketing and Corporate Communications Economic and Environmental Studies MARKET TRENDS ECONOMIC TRENDS Gross Domestic Product Table 1: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100), 1997-2001 Inflation Table 2: UK Rate of Inflation (%), 1998-2002 Unemployment Table 3: Unemployment Rate and Actual Number of Unemployed Persons (% and 000), 1998-2002 Household Disposable Income Table 4: Index of Household Disposable Income (index 1971=100), 1997-2000 MARKET POSITION The UK Overseas 2. Market Size THE TOTAL MARKET Introduction Management Consultancies Association Data Table 5: The Total UK Management Consultancy† Market by Value (£bn), 1997-2002 Table 6: The Total Fee Income of the Members of the Management Consultancies Association (£m), 1997-2002 By Industry Table 7: The UK Private and Public Sector Fee Income of the Members of the Management Consultancies Association (£m), 1997-2002 The Private Sector by MARKET SECTOR Table 8: The UK Consultancy Fee Income of the Members of the Management Consultancies Association by Market Sector (£m), 1998-2002 Outsourcing Information Technology Corporate Strategy and Organisation Development Financial and Administrative Systems Project Management Production and Services Management .Human Resources Management Marketing and Corporate Communications Economic and Environmental Studies OVERSEAS trade 3. Industry Background INTRODUCTION RECENT HISTORY INDUSTRY STRUCTURE IT, Telecommunications and Technology-based Companies US-based Consultancies Small to Medium-sized Consultancies Actuarial Firms Business Schools Small Consultancies Sole Practitioners NUMBER OF COMPANIES EMPLOYMENT REGIONAL VARIATIONS in the marketplace how ROBUST iS THE MARKET? LEGISLATION Key TRADE ASSOCIATIONS The Institute of Management Consultancy The Management Consultancies Association 4. Competitor Analysis THE MARKETPLACE Table 9: Leading Consultancies Ranked by UK Fee Income (£m), 2002 MAJOR COMPANIES Accenture Company Structure Current and Future Developments Financial Results Atos KPMG Consulting Company Structure Current and Future Developments Financial Results Cap Gemini Ernst & Young UK PLC Company Structure Current and Future Developments Financial Results CSC Computer Sciences Ltd Company Structure Current and Future Developments Financial Results Deloitte Consulting Ltd Company Structure Current and Future Developments Financial Results IBM Global Services Company Structure Current and Future Developments Financial Results LogicaCMG PLC Company Structure Current and Future Developments Financial Results Mercer Company Structure Current and Future Developments Financial Results PA Consulting Services Ltd Company Structure Current and Future Developments Financial Results Xansa PLC Company Structure Current and Future Developments Financial Results OUTSIDE SUPPLIERS marketing activity Table 10: Main Media Advertising Expenditure by Management Consultants (£m), Years Ending to September 2000 and 2001 5. Strengths, Weaknesses, Opportunities and Threats STRENGTHS WEAKNESSES OPPORTUNITIES THREATS 6. Buying Behaviour DIFFERENT KINDS OF CLIENTS Buying Methods Payment The One-Stop Shop or `Pick and Mix'? What Clients Look For 7. Current Issues INTRODUCTION MERGERS AND ACQUISITIONS Andersen IBM buys PwC's Consulting Business KPMG Arthur D. Little Merger of CMG and Logica Job Cuts 8. The Global Market INTRODUCTION THE WORLD MARKET GLOBAL CONSULTANCIES THE EUROPEAN MARKET 9. Forecasts ECONOMIC FORECAST Table 11: UK Government Economic Forecasts, 2002-2006 FORECASTS 2003 TO 2007 Table 12: Forecast UK Management Consultancy Market by Value (£bn), 2003-2007 FUTURE TRENDS 10. Company Profiles Cap Gemini Ernst & Young Uk Plc Csc Computer Sciences Ltd Logicacmg Plc Pa Consulting Services Ltd Xansa Plc 11. Further Sources Associations Publications General Sources Bonnier Information Sources Government Publications |
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