A report by Source Information Services (Source) released today (11th April 2013) has found that growth in the Nordic consulting market has fallen from 8 per cent to just 2 per cent in the last twelve months (2011-2012), despite a relatively strong Norwegian market, which grew by 5 per cent.
The Source report says that the Nordic consulting market, which is now worth almost €2.2 billion, has seen its growth stunted partly by the impact of globalisation as the industry struggles to balance the need to compete in global markets with the responsibility to local economies.
Across the region, the greatest growth is coming from within the energy and resources sector, and especially from the Norwegian oil and gas industry. However, at just €123 million, this remains a relatively small part of the consulting market. In contrast, the region’s biggest consulting market, manufacturing (worth €459 million) expanded by just 1.9 per cent during the same period. The report says that its growth in manufacturing been checked by increasingly complex globalisation challenges, growing headcount within client organisations and currency fluctuations.
Consulting services under greatest demand from clients included marketing and selling (up 9.6 per cent), operational improvement (up 6.6 per cent) and technology (up 3.9 per cent).
Edward Haigh, Director of Source Information Services commented:
“Growth across the region has slowed quite dramatically over the last 12 months and the signs are that the Nordic consulting industry is struggling to keep up with clients who are demanding global coverage, scale and flexibility from consulting firms, but a greater degree of specialisation at the same time. Because of its structure – to the Nordic consulting industry – this feels like conflicting demands.”
Alisdair Munro, Director Knowledge & Technology, Virke – The Norwegian Enterprise Federation, and Head of Consulting Norge, commented:
“Although Norway has a smaller consulting market than its neighbours in Denmark and Sweden it was the powerhouse of growth across the region between 2011 and 2012. But growth here – of 5% – has largely come from the oil and gas sector and relies very heavily on a very small number of very big organisations. To develop the market in Norway, and across the broader Nordic region, consulting firms will have to find ways to counter some of these types of structural risks whilst addressing the opportunities and challenges presented by globalisation.”
The main players…
The advisory practices of the Big Four accounting firms dominate the market both in terms of market share and at the rate in which they’re growing. Amongst strategy firms, McKinsey and Boston Consulting Group (BCG) are the firms that clients are most likely to mention, an honour that, amongst technology firms, goes to Accenture – marginally ahead of IBM.
The Source report also found that the three areas around which most initiatives are planned by clients are cost reduction, technology and growth.
Edward Haigh concluded:
“One of the big drivers of globalisation in the consulting market is a desire, on the part of both clients and consultants, to find lower-cost solutions to their challenges. Finding a way to offer lower-cost alternatives is likely to be critical to the future of the Nordic consulting market, but so is finding a way to explain to clients – who have access to everything – why they should also buy the Nordic region’s expensive consulting services.”