Embed Size (px)
Citation preview
SPECIALISED RESEARCH AND ADVICE
How Source Global Research can help
© Source Information Services Ltd 2016 2
What Source can do for you
Source Global Research has worked with consulting firms from around the world providing them with specific views of the consulting market and the opportunities within it. Our analysts cut data to suit your needs, and provide analysis and strategic advice based on it.
Our customers use us because:
• We have huge amounts of experience advising the world’s leading consulting firms about their businesses, at all levels
• We provide the most accurate, detailed, and up-to-date information on the global consulting market that’s available anywhere
• We don’t just provide numbers–we add analysis, interpretation, and strategic advice, based on our analysts’ deep understanding of the management consulting market
• We’re fast, efficient and pro-active
An example of some work on the German consulting market: The macro-economic environment
• Germany’s economy powered through the global financial crisis, not exactly unscathed, but comparatively undamaged, largely as a result of a robust banking system and manufacturing companies which shifted their attention to buoyant export markets.
• That resulted in a consulting industry which has grown fairly steadily since 2010: although the rate of growth here has now been eclipsed by that of the UK, the German market has been growing for longer.
• Although German business people are habitually cautious about the prospects for future growth, the economic indicators are broadly positive: the economy is growing reasonably well; unemployment is falling; Germany is still seen as a good destination for foreign investment; levels of innovation and R&D are high.
• While German executives don’t “like” consultants as much their British counterparts tend to, Germany boasts many large, multinational corporations which are big buyers of consulting.
• The fly in the ointment here is the uncertainty around the euro zone, the possibility of a Greek exit from the euro (deferred, rather than avoided, by the recent agreement). Germany and German banks are particularly exposed to a Greek default and the general concern about the future viability of the euro has dented business confidence.
2011 2012 2013
1.2% 1.4%2.0%0.4%
0.7%1.6%
Real GDP growth
Real GDP growth
ICT investment and innovation Presence of very large and large organisations
Inflation
Foreign direct investment inflows as a % of GDP
2012
2011
20122013
2012
20132014
2013
20142015e
2014
1.0%
7.6%7.9%
2.1%0.4%
1.5%1.6%
7.7%
1.7%1.6%
7.5%
OECD averageGermany
Source: World Bank; Knoema
ICT investment expressed as a % of gross fixed capital formation; global average
in 2010 was 16%
Source: OECD, 2015
Proportion of Forbes Global 500 HQ’d in country
Rank in terms of amount spend on
R&D in 2014
Source: Bloomberg Innovation Index, 2105
Source: World Bank
2010
13% 4%2015
3rd
© Source Information Services Ltd 2016 4
Buying patterns THE GERMAN CONSULTING MARKET
• German multinationals are keen to use consultants to help improve productivityand manage their international operations, but they’re more sceptical than theircounterparts in the US about technology and whether consultants have a role in growth.
• If anything, what they want is access to specialist expertise: the appetite for large-scale transformation projects is less marked than in the UK, for example, althoughso, too, is the willingness to use consultants as straight-forward staff substitutes.
• Germany is famed for the strength of its “Mittelstand”, the 99% of the country’sbusinesses which are small- or mid-sized. There are 3.6m in total, which providemore than 60% of all jobs and 52% of GDP.
• But the significance of Mittelstand companies is not their direct impact but in the factthey’re more likely than their counterparts in other countries to invest to create jobsand have long-term planning horizons. In theory this makes them more likely to investin consulting support, but the premium placed on specialist knowledge applies here,too, resulting in a large number of highly specialised, mid-sized consulting firms.
• Formal, central and very sophisticated procurement
• German companies tend to make more effort than those in other countries to measure the value consultants add—perhaps because they have mixed views about risk/reward payment methods
• Very focused on buying expert support on an ad hoc basis
• Tend to buy from mid-sized firms (like themselves)
• Brand isn’t particularly valued
Differences in buying habits
Very large and large organisations Upper mid-sized organisations
1%Large
businesses
48%Large
businesses
99%SMEs
52%SMEs
Market size broken down by size of organisation
© Source Information Services Ltd 2016 5
The consulting market, by service THE GERMAN CONSULTING MARKET
Commentary:
• With fears for the euro zone likely to dog German clients’ expectations andinvestment decisions, and a relatively slow take-up of digital transformation work,we think that this market will grow by only 5%-6% for the next couple of years.
• Thereafter, we expect demand for strategy work to grow slightly less quickly, butthat will be partially offset by increasing demand for technology consulting (asdigital catches on). Risk consulting will also increase, bringing Germany more in lineto the levels of spending we see in the UK and US.
• Overall, we estimate that the addressable transformation consulting market willgrow by 28% between 2016 and 2020, taking it from $5.5bn today to $7.4bn in 2020.Growth rates for technology and risk will be highest—43% and 40% respectively.
• With a clear preference for specialist skills rather than one-stop-shopping, and afairly cautious attitude to technology and large-scale transformation programmes,we think that only 39% of transformation consulting work is bought as part of anintegrated, multi-disciplinary service—a relatively small proportion.
2014 2015 2016 2017 2018Market size (€m) % Growth Market size (€m) % Growth Market size (€m) % Growth Market size (€m) % Growth Market size (€m)
Strategy consulting 2539 6% 2691 5% 2826 5% 2967 5% 3116
Management consulting 1650 5% 1732 5% 1819 4% 1892 4% 1968
Risk consulting 87 4% 90 5% 95 6% 101 7% 108
Regulation consulting 156 3% 160 3% 165 3% 170 3% 175
Technology consulting 983 6% 1042 7% 1115 8% 1204 8% 1301
Tax consulting 92 4% 96 4% 100 3% 103 3% 106
Total / average 5507 6% 5813 5% 6120 5% 6437 5% 6773
18%Technology
consulting
46%Strategy consulting
2%Tax consulting
Market size broken down by size of organisation
30%Management
consulting
1%Risk
consulting
3%Regulation consulting
© Source Information Services Ltd 2016 6
Primary resources THE GERMAN CONSULTING MARKET
Commentary:
• In this large but mature market, continuous improvement is a key theme and will drive some consulting opportunities.
• Environmental, green and sustainability programmes and targets will also be a source of ongoing work.
• The German policy to build new coal-fired power plants is projected to support its coal mining industry, since the power sector has traditionally accounted for more than 90% of the country’s coal consumption.
• Five state governments in Germany are putting pressure on the Agriculture Minister introducing a bill for a nationwide ban on GMOs. Green politicians are concerned that the ban will create a patchwork system, resulting in GM-free states beside states allowing GM crops.
• Germany has the longest tradition in organic farming and marketing for health products. The first reform shops (Reformhäuser) opened more than 100 years ago as part of a food reform movement.
• Major product innovation has taken place in the area of wood construction based on hardwood and hybrid products. The beech and hybrid glulam have been developed and successfully applied in construction projects. For example wood engineering companies Hess Timber GmbH & Co KG and Schaffitzel & Miebach Faszination Brücken GmbH are both offering high-end and innovative wood construction solutions based on hardwood and hybrid glulam.
• In 2014, German coal production was an estimated 195m tons, up by 2% over 2013.
• Much of the coal produced is lignite, and production is concentrated in four provinces: Rhineland, North Rhine-Westphalia, Brandenburg and Saxony.
• Lignite is the cheapest source of electricity from fossil fuels, and Germany has the world's largest reserves.
• Consumption of coal in 2014 was an estimated 247Mt, 98% of which was consumed by the power generation sector.
• The forestry industry comprises of 150,000 companies, with annual sales of approx. € 170 billion and almost 1.2 million employees.
• One third of Germany is covered with forests.
• There are almost 300,000 agricultural holdings in Germany. 90% of agricultural holdings are family-run. In 2013, family farms cultivated 10.9 million hectares, which is 65% of the total utilised agricultural area.
• Production in aquaculture businesses went up 3.0% in 2014.
• Meat production in Germany was up 1.3% in 2014 compared with 2013.
PEST analysis
Political/regulatory issues:
Social/demographic issues: Technology/disruptive issues:
Economic/competitive issues
23%Technology
consulting
41%Strategy consulting
1%Tax consulting
31%Management
consulting
2%Risk
consulting
2%Regulation consulting
© Source Information Services Ltd 2016 7
We can create data packs for 84 countries globally, 29 sectors, five firm types, six services, and can include up to seven years of data.
Algeria Angola Cameroon Ivory Coast Egypt Ethiopia Ghana
KenyaLibya Morocco Mozambique Nigeria Rwanda South Africa
Sudan Tanzania Tunisia Uganda Zambia
AustraliaChinaHong KongIndiaIndonesia
JapanMalaysiaMyanmarNew ZealandPakistan
PhilippinesSingaporeSouth KoreaThailandVietnam
AlbaniaAustriaBelgiumBosniaBulgariaCroatiaCyprusCzech Republic DenmarkFinlandFrance
GermanyGreeceHungaryIrelandItalyLuxembourg Macedonia Netherlands NorwayPolandPortugal
RomaniaRussiaSerbiaSlovakia SloveniaSpainSweden Switzerland TurkeyUnited Kingdom
BahrainIranIraqIsraelKuwait
OmanQatarSaudi ArabiaUAE
ArgentinaBrazilCanadaChileColombia
MexicoPeruUnited States Venezuela
84 Individual countries
North and South America
Africa Middle East
Asia Pacific
Europe
SPECIALISED RESEARCH AND ADVICE
© Source Information Services Ltd 2016 8
29 Sectors and five firm types
Sectors Firm types
Type S
Strategy
Type P
People
Type MManagement consulting
Type T
Technology
Type A
AuditA
T
S
M
P
Financial services
BankingCapital marketsInsuranceInvestment and wealth managementPrivate equity
Manufacturing
AerospaceAutomotiveConstructionConsumer packaged goodsConsumer electronicsIndustrial products
Public sector
DefenceEducationNot-for-profit
Services
Business servicesLeisureLogisticsReal estateTransportation
Technology, media & telecoms
High techMediaTelecoms
Energy & resources
EnergyPrimary resourcesUtilities
Pharma & biotech
Retail
Healthcare
SPECIALISED RESEARCH AND ADVICE
© Source Information Services Ltd 2016 9
Six services and seven years of data
Services Growth rates2012, 2013, and 2014
Current year2015
Forecasts2016, 2017, and 2018
StrategyIncludes business and financial modelling, corporate re-structuring, corporate recovery and turnaround, corporate strategy, market analysis and strategy, market research, policy formulation, strategic sourcing/offshoring strategy, due diligence and valuation, infrastructure/asset financing and management, PFI, mergers and acquisitions, customer service, new product development, branding, marketing and channel management, customer relationship management, pricing, sales force effectiveness, category management, sales and distribution planning.
HR & change managementIncludes HR strategy and effectiveness, benefits, compensation and pensions, change management, internal communications, organisational design and culture, stakeholder management, team effectiveness and collaboration, leadership and governance, performance management, talent management/training and development.
Operational improvementIncludes business continuity and recovery, knowledge management, Lean and Six Sigma, property and estate management, quality and performance management, supply chain management, cost-cutting, innovation, M&A integration, managing quality, post-M&A integration, process design and re-engineering, procurement/purchasing, research and development, benchmarking, distribution strategy, environmental, sustainability and CSR, and operational review.
Financial management
Includes finance function and budgeting/financial planning process.
Risk & regulatory
Includes responding to regulation, technology and security risk services, operational risk, financial risk, programme risk.
Technology
Includes ERP consulting, IT training, application of new technology, hardware/software selection, IT design and build, IT strategy, planning and review, IT testing and integration, management information and business intelligence, requirements definition, web and internet consulting, project and programme management (e.g., where consulting firm has been engaged to run a specific project that it is otherwise not involved in).
SPECIALISED RESEARCH AND ADVICE
© Source Information Services Ltd 2016 10
About Source
Source is the leading provider of research about the management consulting market. Founded in 2007, and with offices in London and Dubai, Source serves both consulting firms and their clients with expert analysis, research and reporting.
At the heart of our research is a model of the consulting industry containing data on several thousand firms around the world. Data in the model comes from extensive desk research and more than 1,000 interviews with senior partners in consulting firms since the start of 2014. All of the data we gather is mapped against publically available information.
We also carry out large-scale surveys of CXOs and their direct reports, asking for their views of consulting firms. Since November 2015 we’ve surveyed over 2,500 senior users of consulting services. 48% of people were from firms with more than 5,000 employees (the fact that we surveyed mid-sized businesses as well was a function of the mix of mature and emerging markets we looked at—the latter tend to have more, smaller enterprises).
Independent and influential, Source’s research is used by all the world’s major consulting firms as well as major media organisations including Bloomberg, the Financial Times, and The Economist.
© Source Information Services Ltd 2016 11
The Team
Fiona Czerniawska
A co-Founder and Director of Source, Fiona is one of the world's leading commentators on the management consulting industry. Since founding Source in 2008, she has been bringing this expertise to bear on our clients’ most pressing strategic projects and business issues.
Fiona has published a dozen books on consulting topics, including two for The Economist: Business Consulting: A Guide to How it Works and How to Make it Work, and Buying Professional Services. She has more than 20 years’ experience as a management consultant, working primarily in the areas of marketing and strategy. She was previously in charge of strategic planning for EY in the UK and has worked in the consulting practice of PwC. Fiona also has a PhD in 17th century French art and lives in hope that it will be of practical use in business someday.
Joe Hamer
Joe is Product Manager for Source's Global Consulting Data Model. He's responsible for the development and implementation of the model, which serves as the backbone for much of what we do. The model generates our market size numbers and contributes to our industry forecasts, and it forms a critical component of Source’s custom competitor profiles.
An experienced quantitative analyst with an MSc in Organisational Consulting, Joe has previously worked in technical and analytic roles for Ashridge Business School and BPP University.
Zoë Stumpf
Zoë is Head of Consulting Market Trends at Source and is responsible for all reports published as part of the Consulting Market Programme. A world-leading expert on consulting trends, she is the driver behind Source’s bespoke analysis of consulting’s biggest geographical and industry markets. She is an active member of the Source research team and spends much of her time interviewing consultants and their clients all over the world, collecting their first-hand accounts of what is happening in the consulting world. She also brings extensive experience as an analyst and writer to her post.
Prior to joining Source, Zoë spent more than 12 years working as a management consultant in a variety of roles with KPMG and Atos Consulting. She has also worked as an independent marketing consultant.
David Lawton
David is an Analyst in the data team, working closely with Joseph Hamer to deliver the quantitative components of Source’s research programme. He is particularly focused on client perception data and brand benchmarking work. He previously spent two years as a Research Executive at BVCA where he produced reports and benchmarks for the private equity industry. David has a strong background in statistics and holds an MSc in Economics and Public Policy.
© Source Information Services Ltd 2016
Source Information Services Ltd and its agents have used their best efforts in collecting the information published in this report. Source Information Services Ltd does not assume, and hereby disclaims, any liability for any loss or damage caused by errors or omissions in this report, whether such errors or omissions result from negligence, accident or other causes.
Contact us
For more details on how we might be able to help you please contact us at:
Email: [email protected]; [email protected]
or by phone: +44 (0)203 478 1207
www.sourceglobalresearch.com
