Technology-forced transition: How cloud and its tech cousins are catalyzing change in management...
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TBR
TECHNOLOGY BUSINESS RESEARCH, INC.
Technology Business Research Webinar Series
July 18, 2013
TBR’s 2H12 Management Consulting Benchmark Webinar
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 2
Management Consulting Benchmark Webinar: Webinar Presenters
Patrick M. [email protected] Analyst/Engagement Manager@TBR_PatrickH
Boz [email protected]@boztbr
Stephanie [email protected]@StephanieA715
Bryan [email protected]@bbelangerTBR
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 3
Management Consulting Benchmark Webinar: Webinar Presenters
What we’re going to cover:
Key Trends
Focus Area One: Deloitte
Focus Area Two: Global Spread/Localization
Focus Area Three: IBM
What We’re Looking at Through 2013
Questions
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 4
TBR’s Management Consulting Benchmark provides revenue and resource analysis by region, service line and vertical
Management Consulting Benchmark Webinar: Overview
Vendors Firm Segments Service Lines Regions Verticals Key Metrics Time Period
• Deloitte• Ernst & Young• KPMG• PwC• A.T. Kearney• Bain• BCG• Booz & Company• McKinsey• Accenture• Capgemini• IBM• Aon Hewitt• Mercer• Oliver Wyman• Towers Watson
• Solutions-led• Strategy-led• Big Four • HR/Specialty
• Strategy• Operationso HR o Supply Chaino Finance and
Accountingo CRM/
Customer and Marketing
o Governance, Risk and Compliance
• Organization and Change
• Technology
• Americas• U.S. only• EMEA• APAC
• Financial Services• Retail• Energy and Utilities• High Tech, Comm.
and Media• Industrial
Solutions/ Manufacturing
• Public Sector• Healthcare• Consumer
Packaged Goods• Other
• Revenue by:o Service Lineo Regiono Verticals
• Headcount (partners, billable, nonbillable) by:
o Service Lineso Regions
• Operational Metricso Profitabilityo Utilizationo Attrition
• Current report includes data for:
o 1H10o 2H10o 1H11o 2H11o CY10o CY11o 1H12o 2H12o CY12
• TBR’s Management Consulting Benchmark is a semiannual deliverable providing key service line, regional, vertical and operational data and analysis across 16 leading management consulting firms.• Benchmark deliverables include:
oExecutive Summary and Report ○ 16 Individual Firm ReportsoAppendix Data ○ Database and Excel Pivot Table
Management Consulting Benchmark Coverage
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 5
Key Takeaways
While management consulting vendors absorb, adjust and scale up emerging technologies offerings, clients will appreciate and grow accustomed to what cloud, analytics and mobility can deliver. By 2014, clients will expect those services to yield results, driving an expansion of consulting revenues.
Operating models shifted from fly-in-with-advice to invest, build and share risks and rewards with clients at a local and subregional level as consultancies expanded into previously overlooked markets.
Financial services clients continue to be the largest vertical pool, but vendors targeting healthcare and manufacturing clients with technology-centric, end-to-end solutions rooted in strategic business process improvement and change management will see steady growth in 2013 and explosive growth in 2014.
Disruptive new offerings, pressure to get local and the convergence of increased competition with ideally suited technologies permeated 2012
Management Consulting Benchmark Webinar: Key Trends
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 6
The large vendors grew, the middle of the pack stagnated and the bottom third recovered or slid further off the benchmark map
Management Consulting Benchmark Webinar: Key Trends
Key Takeaway
The Big Four firms have size, global reach, and entrée through other services to keep expanding in consulting.
For discussion: How will the strategy and HR-centric firms keep pace?
Three of the top five revenue leaders earned double-digit growth, accelerating those vendors away from the pack
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 7
Management Consulting Benchmark Webinar: Key Trends
The Big Four firms keep outpacing the pack, using acquisitions and emerging technologies to grow faster than most
Up from 14% in 2011
USD Millions USD Millions
Technology-centric consultancies should grow faster as emerging technologies become standard fare
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 8
Deloitte outpaced competitors by investing in technology and people, and then deploying those resources into the right markets
Management Consulting Benchmark Webinar: Focus Area One
Other, 4.0%
Consumer Packaged Goods, 6.2%
Energy & Untilities, 9.1%
Retail, 9.8%
Healthcare, 10.0%
Public Sector, 10.2%
Industrial Solutions/ Manufacturing, 10.9%
High Tech, Communications &
Media , 11.1%
Financial Services, 28.7%
Technology Consulting, 18.5%
Organization & Change, 20.6%
Strategy Consulting, 27.7%
Operations Consulting, 33.2%
Service Lines 2H12(% of revenue)
Verticals 2H12(% of revenue)
2012 Management Consulting Revenue: $9,384M
Creates brand awareness, permission and access in key growth markets and verticals, sustaining and even growing
lead within benchmark
Deploying IT experts with
industry knowledge
Attracting and
retaining top talent
Shifting portfolio to technology consulting
Enhancing capabilities
through strategic fit acquisitions
SOURCE: TBR AND COMPANIES
TBR
9 TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc.
Building on 2012 investments, vendors will ramp up emerging technologies in concert with clients’ maturing needs and expectations
Management Consulting Benchmark Webinar: Key Trends
Key Takeaways
2012 was all about building capabilities — through acquisitions, alliances and innovations — in cloud, digital, mobility and analytics.
In 2013 will see many vendors continue acquiring and announcing new emerging-technology-centric services, but the leading consultancies will absorb 2012 acquisitions and begin bringing scale to their offerings.
Concurrently, clients will shift from learning about emerging technologies to understanding exactly how those technologies will disrupt business models and generate opportunities.
Select Emerging Technology Acquisitions
Deloitte IE Discovery Digital
Deloitte Recombinant Analytics
KPMG Workday (partnership) Cloud
PwC ThoughtWorks Digital
PwC Ant’s Eye View Digital
IBM RPI (partnership) Analytics
IBM Kenexa Analytics
Accenture Change Track Research Analytics
E&Y Semphonic Digital
Booz & Company
Axon Advisory Partners Digital
McKinsey Henry Rak Consulting Analytics
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 10
Operations consulting grew at nearly the same pace as technology consulting, echoing an across-the-board increase in demand
Management Consulting Benchmark Webinar: Key Trends
Operations consulting increased 7.1% from 2011 to 2012, while technology consulting increased 7.6%.
Strategy consulting increased 5.6% from 2011 to 2012, while organization and change consulting increased 6.2%.
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc.
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Global management consulting vendors spread into local offices to address local/subregional clients and MNCs expanding globally
Management Consulting Benchmark Webinar: Key Trends
Key Takeaways
Putting boots on the ground — via local consultants, possibly hired locally but certainly established permanently — became the operating model for many management consultancies in 2012.
Strengthening local offices and investing in country-specific or subregional strategies provides permission for global management consulting firms to pursue local clients and serve multinational companies also seeking growth in emerging, underpenetrated markets.
Australia
Canada
Ethiopia Jakarta and Singapore
Moldova/Romania
Myanmar
South Africa
Brazil
Germany/U.K.
Acquisition/New office location Expansion/strengthening
Cameroon
SOURCE: TBR AND COMPANIES
2012 Areas of Investment for Management Consulting Firms
TBR
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Management Consulting Benchmark Webinar: Focus Area Two
Firms take the risk of expanding in emerging and frontier markets to build local market presence and target specific verticals
Expert Comptables Associés (E&Y)
Venmyn (Deloitte)Q-Core Consulting (E&Y)The Resolve Group (E&Y) Acquisition (2012)
New Office (2012)
• Management consulting firms are investing in new hires, offices and acquisitions to build local market presence in Africa to target fast-growing industries such as energy, where oil and natural gas clients look to develop infrastructure. • About 90% of the clients in
Myanmar are foreigners, demonstrating the high volume of investment in this country as government sanctions have been removed. Firms are establishing offices to help foreigner investors expand business in this frontier market.
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 13
APAC figures in every vendor’s growth strategy, and the Americas remains a must-have market
Management Consulting Benchmark Webinar: Key Trends
Key Takeaways
APAC’s share within the benchmark has grown from 15% in 2011 to 16% in 2012 — and will likely top 18% in 2013.
In contrast, the EMEA share within the benchmark has dropped from 42% to 40%, even as overall regional revenues have grown.
For discussion: What impact will slowdown in China’s growth have on APAC overall?
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 14
16.1%
7.1%
1.8% 2.2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
$-
$5,000
$10,000
$15,000
$20,000
$25,000
2010 2011 2012
US Revenue, Growth and GDP Growth (2010 - 2012)
Revenue
Growth
U.S. GDP Growth
TBR
SOURCE: TBR, COMPANY DATA AND U.S. DEPARTMENT OF COMMERCE
Management Consulting Benchmark Webinar: Key Trends
U.S. and Americas growth continued apace; Europe and MEA diverged
Key Takeaways
Benchmark vendors almost universally grew in the U.S. and Americas, reflecting macroeconomic trends.
In EMEA a few consultancies managed to outpace the stagnant Eurozone economy, although pockets of growth may be attributable to individual countries or the differences between Europe and the Middle East and Africa.
For discussion: Is EMEA still a used/useful regional grouping, or should Europe be split apart from the Middle East and Africa?
10.5%
2.4%1.5%
-0.6%
3.5% 2.5%
4.1%4.7%
7.3%
8.5%
3.9%
5.2%
-2%
0%
2%
4%
6%
8%
10%
12%
$20,000
$21,000
$22,000
$23,000
$24,000
$25,000
$26,000
2010 2011 2012
EMEA Revenue and Select GDP Growth (2010 - 2012)
EMEA Revenue
EMEA Growth
Euro Area Growth
South Africa Growth
Cameroon
Ethiopia
United Arab Emirates
TBR
SOURCE: TBR; COMPANY DATA; EUROPEAN COMMISION, EUROSTAT; WORLD BANK; INTERNATIONAL MONETARY FUND
USD Millions
USD Millions
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc.
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Financial services dominates, but healthcare and manufacturing are growing opportunities for management consultancies
Management Consulting Benchmark Webinar: Key Trends
Key Takeaways
Despite an increase in competition as nearly all benchmarked vendors vie for healthcare management consulting dollars, leading consultancies — firms with healthcare-specific offerings, enabled by emerging technologies and compliant with the ever-changing regulatory environment — will continue to grow in 2013
Manufacturing, as some vendors understood early, is perfect for emerging technologies. Clients in this sector are accustomed to disruptive technologies and quick to adopt new methods and models that will deliver efficiencies (in contrast, consider healthcare and public sector).
$868
$178
$724
$460
$1,027
$198
$724
$452
18.3%
10.8%
-0.1% -1.7%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
$0
$200
$400
$600
$800
$1,000
$1,200
Deloitte Booz & Company Accenture IBM
Reve
nue
Gro
wth
YTY
Reve
nue
(In $
Mill
ion)
2011 AND 2012 INDUSTRIAL SOLUTIONS/MANUFACTURING REVENUE AND REVENUE GROWTH
2011 Industrial Solu./Manu. Revenue 2012 Industrial Solu./Manu. Revenue 2012 Industrial Solu./Manu. Revenue Growth YTY
SOURCE: TBR AND COMPANY DATA
TBR
$774
$370
$69 $70
$929
$437
$81 $85
20.1%18.0%
17.8%
20.8%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
Deloitte E&Y Bain Aon Hewitt
Reve
nue
Gro
wth
YTY
Reve
nue
(In $
Mill
ion)
2011 AND 2012 HEALTHCARE REVENUE AND REVENUE GROWTH
2011 Healthcare Revenue 2012 Healthcare Revenue 2012 Healthcare Revenue Growth YTYSOURCE: TBR AND COMPANY DATA
TBR
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 16
Steady revenue growth provided by healthcare clients will continue in 2013, bolstered by healthcare exchanges implementations
Management Consulting Benchmark Webinar: Essential Metrics
Key Takeaways
All 2011 drivers continued to ramp up demand in 2012 — regulatory uncertainty, risk mitigation, emerging technologies — and we expect the same in 2013.
HR solutions has emerged as a key growth area for healthcare clients, as consultancies see opportunities in healthcare exchange implementation and healthcare-specific HR outsourcing.
For discussion: Does specialization matter more in certain industries, such as healthcare, or is it table stakes across all industries?
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 17
Management Consulting Benchmark Webinar: Focus Area Three
Despite growth challenges in 2012, IBM’s focus on technology-enabled business transformation will support long-term consulting growth
IBM 2012 Growth Challenges• Soft demand for consulting in mature markets• Lower volume of multiyear “megadeals” that are
staged with consulting• Investments ahead of large-scale demand for
business analytics solutions • Difficult year-to-year compare
SOURCE: IBM
IBM 2013 Outlook • IBM will emerge as a leader as big data becomes a
front-office mandate and clients demand a partner that can move beyond advice to implementation. • IBM’s ability to cohesively go-to-market with
integrated consulting and software teams will stand out as a differentiator relative to Accenture.
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 18
PSP Research Current Topics 1H13 Report Key Themes• Syndicated Vendor
Reports:o McKinsey & Co.o Deloitte Consultingo Bain & Co.o Booz & Companyo Boston Consulting
Groupo Accentureo IBM GSo Capgemini
• Management Consulting Benchmark
How are vendors shaping go-to-market strategies to fuel growth as emerging technologies become increasingly tied to business goals and strategies?
How are vendors building out global delivery models and utilizing processes, tools and methodologies to optimize global management consulting delivery while building a deeper local presence?
• Which vendors have organizationally changed to
multiple regions to accommodate the vast differences between Europe and Middle East/Africa?
• How are vendors leveraging alliances, acquisitions and/or thought leadership development to penetrate growth verticals? • Which vertical markets are vendors prioritizing for
go-to-market and resource investments?
Convergence of Technology and Business
Consulting
Management consultants will absorb emerging technologies acquisitions, acquaint clients with the possibilities, and grow dramatically in 2013–14
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
Global/Subregional/
Local
Breaking Apart EMEA
Vertical Specialization
of Management
Consulting
Management Consulting Benchmark Webinar: 2013 Research Outlook
TBR
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Questions?
Management Consulting Benchmark Webinar: 1H12
TBR
TBR Webinar Series | 7.18.13 | www.tbri.com | ©2013 Technology Business Research Inc. 20
Management Consulting Benchmark Webinar: Webinar Presenters
Patrick M. [email protected] Analyst/Engagement Manager@TBR_PatrickH
Boz [email protected]@boztbr
Stephanie [email protected]@StephanieA715
Bryan [email protected]@bbelangerTBR
@TBRincwww.slideshare.net/TBR_Market_Insightwww.youtube.com/user/TBRIChannel
TBR
TECHNOLOGY BUSINESS RESEARCH, INC.
About TBR
Technology Business Research (TBR) is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, networking equipment, wireless, portal and professional services vendors.
Serving a global clientele, TBR provides timely and accurate market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.
TBR has been empowering corporate decision makers since 1996.
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