technology-forced transition: how cloud and its tech cousins are catalyzing change in management...

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



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’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


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


The large vendors grew, the middle of the pack stagnated and the bottom third recovered or slid further off the benchmark map


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

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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

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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

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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


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

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Operations consulting grew at nearly the same pace as technology consulting, echoing an across-the-board increase in demand


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


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

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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.

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APAC figures in every vendor’s growth strategy, and the Americas remains a must-have market


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?

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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

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SOURCE: TBR, COMPANY DATA AND U.S. DEPARTMENT OF COMMERCE


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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15

Financial services dominates, but healthcare and manufacturing are growing opportunities for management consultancies


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

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$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

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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?

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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.

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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


Questions?

Management Consulting Benchmark Webinar: 1H12

TBR



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.

To learn how our analysts can address your unique business needs, please visit our website or contact us today.

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technology-forced transition: how cloud and its tech cousins are catalyzing change in management...

Technology

technology consulting

tbr tbr webinar series

management consulting

strategy consulting

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benchmark deliverables

webinar presenters patrick