2008 promises to be a year of change for the consulting industry.

The credit squeeze, falling profits and general uncertainty about the global economy are likely to make clients more cautious about where they invest their money. Already, consulting firms report that some projects are being deferred while others are being re-directed towards improving efficiency and cutting costs. As a result, growth in 2007 was lower than in the previous two years: MCA fee income rose by 10 percent in 2007 on a like-for-like basis, taking it to just under £6 billion and the UK consulting industry (of which MCA members are estimated to represent around 70 percent) to £8.5 billion compared to £7.7 billion in 2006.

The main areas of growth were in the energy, utilities and mining sectors (up 28 percent) and telecoms (up 20 percent). But financial services, which generated almost £1.4 billion in fees for MCA members last year, grew more slowly: 13 percent, compared to 27 percent in 2005-06. Indeed, demand in banking, one of the most important sectors for consulting firms, fell by 2 percent.

The report also shows a further shift towards IT consulting and programme / project management. Taken together, these now account for more than half of all MCA fee income. Both markets grew in 2007: IT by 16 percent and programme management by 44 percent. By contrast, strategy and financial management both shrank, as did operational improvement and business process re-engineering.

The next few months will be crucial: will the industry experience a relatively short period of low growth before bouncing back (as it did in 1997), or is there a more serious and sustained downturn in the offing?

The UK Consulting Industry 2008 provides the latest data on consulting fee income by sector, service line and consulting industry segments, together with key operational metrics. Published jointly by the Management Consultancies Association and PMP and written by Fiona Czerniawska, a leading commentator on the consulting industry, this report provides an authoritative picture of one of the world’s largest consulting markets.

The Management Consultancies Association (MCA) has been providing valuable statistics on the UK consulting market since 1956. As the UK trade body for consulting firms, it has unique access to fee data and other performance metrics, as well as the views of senior partners, finance directors, personnel and marketing directors in the UK’s major consulting firms.

The UK Consulting Industry Report 2008 comprises around 100 pages of new data, analysis and trends from MCA firms, including:

• Growth in management consulting fee income

• Breakdown of fee income by service line and sector

• Comparative percentage growth by service line and sector

• Breakdown of fee income by industry segment

• Growth in the number of consultants employed by MCA member firms

• Ratios of number of partners and non-fee earning staff to consultants

• Revenue per consultant

As well as detailed analysis of the metrics outlined above, the report also contains interviews with over 70 industry leaders, which provide a unique insight into the challenges faced by the consulting firms and their plans for the future.

The final section of the report includes award winning case studies from the MCA Management Awards, providing an invaluable insight into successful projects.

The leading firms quoted in the report include:

Accenture, Alsbridge, AMTEC, Analysis Mason Group, Arup, Atkins Consulting, Atos Consulting, Axon, The Berkeley Partnership, Bourton Group, BT Global Consulting, Capgemini, Catalise, Celerant, Consulting Stream, CSC Computer Sciences, Davis Langdon, Dbi Consulting, Deloitte, Diamond Consulting, DMW Group, E C Harris, Eden McCallum, Edengene, ER Consultants, Ernst & Young, Fujitsu Services, Hay Group, Hedra, Hitachi Consulting, IBM Global Business Services, Infosys, KPMG, LCP Consulting, Logica Management Consulting, Kepner-Tregoe, Morse, Mott MacDonald, Navigant Consulting, Oakland Consulting, Oakleigh Consulting, PKF, PricewaterhouseCoopers, Right Management Consultants, Saint Consulting, Serco, Tata Consultancy Services, Trinity Horne, Turner & Townsend Management Solutions, Vertex, Xansa.

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