Survey of the European Management Consultancy 2010/2011

Transcription

1 Survey of the European Management Consultancy 2010/2011

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3 December 2011 This report was prepared for FEACO by: Dr. József Poór Dr. Andrew C. Gross Ágnes Milovecz Ágnes Király Research Center on Management and Human Resource Management, University of Pécs, Pecs, Hungary

4 Table of Contents Introduction by the FEACO CHAIRMAN Executive Summary Key Figures, Scope of the Market and Methodology Europe Market Size, Forecast & Analysis History and Projections Size of the European MC-Market, Evolution in % of the MC Market Turnover, MC Market as % of GDP, Average Growth Rate by Size of Consultancy Company, Size of the European MC Market (Total Turnover) by Country-Region, Breakdown of the European Consulting Market (Business & IT Consulting) by Main Countries, Analysis by Service Line Composition of MC Market by Service line, Breakdown of Business Consulting Turnover, Breakdown of Consulting Turnover, Breakdown of Turnover from other Services, Analysis by Client Sector Composition of the MC Market by Client Sector, Selected European MC Markets Analysis by Country Growth Rates Breakdown by Country Region, Management Consulting as a Percentage of GDP, MC Turnover and GDP in Selected European Markets, Breakdown between Management Consultants and Support Staff, Key Figures of Selected European MC Markets Analysis by Daily Rates Average Daily Fee Rates of Selected European MC Markets, Export of MC Services by Selected Countries, Analysis by Service Lines MC Market Composition by Service Line (% of Turnover), MC Market Composition by Service Line (million ), Breakdown of MC in Selected Key Countries (million ), Breakdown of Business Consulting in Selected Key Countries (million ), Analysis by Client Sector MC Market Composition by Client Sector (% of Turnover), MC Market Composition by Client Sector (million ), Key Market Composition by Client Sector Main Trends in Management Consulting in 2010/ Austria Denmark Finland France Germany Greece Hungary Ireland Italy Portugal Romania Slovenia Spain Switzerland United Kingdom About FEACO, The European Federation of Management Consultancies Associations Member Associations Appendix Definitions

5 Introduction by the feaco chairman As the new chairman, it is my pleasure to introduce the 2010/2011 edition of the Feaco Survey of the European Management Consultancy Market. The current scenario is characterized by fluidity, contamination and discontinuity. The world and identity of consultancy is undergoing dynamic change, from the demand, players, services to the sector s structural elements. The current process of transformation is constant and fluid, lacking any defined elements of stability; it leaves very little untouched and requires that we be ready to adapt accordingly. Together, we have faced a severe economic recession in recent years. However, the sector of management consulting already shows a tendency towards recovery that is greater than forecasted. With the setbacks of 2009 limited to that year, in 2010 management consulting enjoyed increasing employment and revenues growing by 2.9%. In this fluid and discontinuous context, consultancy represents a growth factor and GDP multiplier, and must be perceived as such by the market. The answer to discontinuous change cannot be stagnancy, but rather conscious adaptation or bravely anticipatory action. It is by inciting such transformations that consultancy performs its role of catalyzing growth and development. Consultancy is innovative in its very nature, it is hybridization between the known and the new (in its form and/or content); it is therefore the best tool for helping businesses grow, a tool that must be employed at both national and European levels to promote growth. Today we are asked to think big, to broaden our vision. This does not mean compromising specific identities; rather, it has the potential to enrich them. Strengthening the various national associations involves equipping them with tools that accelerate their internationalization. Liberalizing and opening the market will prompt a competition on the basis of added value, thus raising the qualitative level of the services on offer. In its leading role of developing, representing and supporting management consulting for organized businesses, FEACO will continue to use networking and research activities to promote the kind of competency hybridization that leads to mutual benefit. Ezio Lattanzio Feaco Chairman 5

6 Executive Summary Key Figures, Executive Summary Key Figures, The results of the FEACO survey, conducted in cooperation with the national European management consulting associations, clearly show that in regard to the size of the consulting market last year s forecast was moderate. The actual results in regard to revenues in 2010 proved to be 1.6 billion Euros higher than expected in As markets previously anticipated, the setback experienced in 2009 was limited to that year, so the estimated growth rate for 2010 (1.6%) turned out to be an underestimation. Taking year 2009 s data into consideration revenues increased by 2.9%. Compared to the past years the tendency of recovery can be seen; the size of the consulting market in 2010 almost reached the level of 2008 concerning revenues, and the number of total staff in 2010 highly exceeded its counterpart in the previous years. The distribution of revenues between the different key service lines of management consulting is presented in Table 1. The already remarkable representation of Business Consulting among the consulting services has further strengthened. IT Consulting and Development & Integration have shown better growth rates than before, while proportion of Outsourcing and Other Services have declined. Table 1. Key Figures est. Market size 86.7 bn 83.7 bn 86.2 bn 89 bn Growth rate 8.2% -5% 2.9% 4% Total staff (thousand) Breakdown of Key Services Business Consulting 42% 43% 50% IT Consulting 14% 14% 15% Dvt & Integration 21% 18% 19% Outsourcing 17% 19% 12% Other services 6% 6% 4% The aggregate data from the European consulting industry in by country and by region is presented in Table 2. According to this, significant alteration cannot be seen compared to the previous years. Germany remains the largest consulting market in Europe, followed by the United Kingdom, Spain and France. Regarding the level of regions, Western Europe is in first place, followed by the Nordic Region, while Central & Eastern Europe s total turnover has not decreased remarkably. Table 2. Key Figures in Selected Countries and Regions Total turnover in billion Business & IT Consulting in billion Total turnover in billion Business & IT Consulting in billion Total turnover in billion Business & IT Consulting in billion Germany United Kingdom Spain France Western Europe Nordic Region Central & Eastern Europe Western Europe: Central & Eastern Europe: Nordic Region : Austria, Belgium, Ireland, Italy, Netherlands, Portugal, Switzerland Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Greece, Hungary, Poland, Romania, Slovenia Denmark, Finland, Norway, Sweden 6

7 1 Scope of the Market and Methodology 1 Scope of the Market and Methodology The main goal of FEACO is to present objectively and as accurately as possible a picture of the activity in the Management Consulting (MC) sector of Europe, aiming for the maximum level of reliability in the aggregation of the figures which represent the different elements of the services which companies in the MC sector offer. Findings shown here reflect the aggregate data and the level of detail as a result of the effort of all the companies, large and small, who participated and continue to contribute to build a prosperous, competitive and exciting European MC Market. The FEACO member associations and the companies provide a broad spectrum of MC services. Depending on each national market, the range and type of services offered may be at different levels of maturity. The array of services the management consultancies offer is dynamic and continuously evolving. Defining the framework of activity of our sector is therefore not an easy task, mainly because it concerns a basket of services that are quite different in the various countries. From that perspective and with the objective of improving our report, FEACO proposed in 2005 a new definition of the scope of services offered by management consultancies in Europe and a new way of segmenting these services. This exercise resulted in the following division of the main services: Consulting, which we divide into Business Consulting and IT Consulting, Development and Systems Integration (excluding software development), Outsourcing of value added services, Other services. These segments are described in detail in the subsection Analysis by Service Line. The new framework implied a change in methodology for the collection and aggregation of the quantitative and qualitative data, which are provided by the companies. The methodology consists basically in the collection of the data by our member associations on the MC sector via the aggregation of the figures from the individual consulting companies. In 2007, FEACO decided to distinguish between associations with an indepth knowledge of their domestic market and associations from countries whose markets are less well-known or well-measured. As a result, quantitative data were collected on two levels: Key countries were asked to provide: Volume of turnover for the year 2010 Data on staffing Business volume per service area Business volume per major client sector Daily fee rates for 2010 General forecasts for 2011 Non key countries were asked to provide: Volume of turnover for the year 2010 Data on staffing General forecasts for 2011 In parallel, qualitative data were solicited in a separate questionnaire on companies views on the development and the future of the MC sector in selected areas of activity. The results of it are summarised in the section of the report on trends in the MC sector. The MC sector is dynamic as every year new consulting companies appear, while others merge (which give rise to spin-offs) or reorganize themselves. Because the data are provided on a voluntary basis, the sample of companies surveyed in each European country varies from year to year. The latest edition of the survey allows us to redefine retroactively some of the data obtained in previous years. This year 15 countries contributed with their effort to the final FEACO report 2010/2011. Out of the 15 Full Members 11 members (Austria, Finland, France, Greece, Hungary, Italy, Portugal, Romania, Slovenia, Spain, Switzerland) delivered answers and Denmark, Germany, Ireland and the United Kingdom also participated in the survey. The FEACO Report 2010/2011 is considered to be representative, because the countries delivering data cover over 80% of the total European Management Consulting Market. Data were evaluated on a statistical basis, using data and variance analysis to prove the reliability of the results. The estimated data were calculated on the basis of the median results of the various indicators. 7

8 2 Europe Market Size, Forecast & Analysis 2 europe Market Size, Forecast & Analysis 2.1 History and Projections Size of the European mc Market, After several years of incremental growth, the industry experienced a slight decline in 2009, but it seemed to be only a temporary downfall as in 2010 the volume of the MC Market has almost reached its level that was experienced back in According to estimates, the MC sector is on target to beat the record with an optimistic forecast of 89 billion Euros in Figure 1. Size of the European MC Market, Volume of the MC Market (billion ) Growth rate (%) (est.) Evolution in % of the MC Market Turnover, In Figure 2 a similar optimistic tendency can be discerned about the evolution of the MC market turnover in percentage. Until 2004, changes in the MC market turnover can be described as showing a slow but stable growth. In 2005 revenue significantly increased starting a robust growth trend. This lasted until 2008, when the increase reached 519% compared to the data of the 1996 base year. A moderate setback could be experienced in 2009, but a new development phase has begun in 2010 as the MC market produced 516% compared to the base year. The anticipations for 2011 mirror the positive expectations of the participants as they expect a new peak. Figure 2. Evolution in % of the MC Market Turnover, MC Market (1996 = base 100) Year 2011 (est.) 8

9 2 Europe Market Size, Forecast & Analysis mc market as % of GDP, As can be seen in Figure 3, changes in the MC market as % of European GDP (Source: Eurostat) show a 0.01% decrease from 2009 to 2010, which means that there was no actual change. From 2003 to 2004 a similar, barely observable change took place and then it was followed by an outstanding increase; for 2011 the expectations show the return of the level of 2009 of the results Figure 3. MC Market as % of GDP, % GDP (est.) Year Average Growth Rate by Size of Consultancy Company, The slight decline concerning the growth rate of the industry in 2009 affected primarily the large and medium sized MC-firms that year, however, in 2010 the changes in average growth rate of firms in both categories tend toward stability. In 2010 the growth rate of the small sized MC-firms was actually positive again. 25% Large sized MC-firms (TOP 20 MC-firms) Medium sized MC-firms ( turnover) Small sized MC-firms (< turnover) Figure 4. Average Growth Rate by Size of Consultancy Company, % 15% 10% 5% 0% 17% 10% 8% 9% 15% 4% 5% 20% 10% 6% 11% 4% -6% -6% -2% -2% -3% 1% -5% -10% Year 9

10 2 Europe Market Size, Forecast & Analysis Size of European MC Market (Total Turnover) by Country-Region, 2010 Figure 5a. Size of the European MC Market (Total Turnover) by Country-Region, 2010 In 2010, the same countries and regions can be found among the 13 examined European MC markets as in The position of each country and region remained quite stable. Based on total turnover in each of the markets, Germany is still the largest European MC Market with 32.4% of the total, followed by the United Kingdom at Switzerland 1.22% Belgium 1.39% Portugal 1.43% Austria 1.83% Central & Eastern Europe 2.14% Italy 3.53% Netherlands 3.62% 22.1%. Spain and France are ranked third and fourth, with their respective 11.5% and 10.2%. Germany and France increased their portion of the market compared to last year by 1% and 1.6%, respectively, while Italy, Portugal and Switzerland each grew by less than 0.5%. Greece 0.24% Nordic Region 8.47% 32.36% Germany France 10.22% % 11.49% Spain 22.05% United Kingdom Figure 5b. Size of the European BC Market (Total Turnover) by Country-Region, 2010 Portugal 0.98% Spain 1.11% Switzerland 1.96% Austria 2.06% Belgium 2.23% Central & Eastern Europe 3.52% Italy 5.66% Greece 0.28% 28.03% Germany Netherlands 5.80% % France 10.18% 11.97% Nordic Region 26.20% United Kingdom In 2010 FEACO developed a new instrument for comparative analysis the size of the European Business Consulting market. Since in most of the countries Business Consulting is the leading service line within Management Consulting, it can be a useful tool for comparison-making. The ranking of countries and regions is the following from this aspect: Germany, United Kingdom, Nordic Region, France, Netherlands, Italy, Central and Eastern Europe, Belgium, Austria, Switzerland, Spain, Portugal and Greece. 10

11 2 Europe Market Size, Forecast & Analysis Breakdown of the European Consulting Market (Business & IT Consulting) by Main Countries, For the four main countries covering more than 75% of the total MC market, we present the distribution of the European Consulting Market (Business & IT Consulting) in Figure 6. There are no significant changes that can be seen, though the United Kingdom and France lost respectively 4% and 1% to the benefit of Germany. The rate for Spain remained unchanged. 5% 17% 5% 16% Figure 6. Breakdown of the European Consulting Market (Business & IT Consulting) by Main Countries, % 23% 50% 56% 2009 Year 2010 Germany United Kingdom France Spain 2.2 Analysis by Service Line According to the new segmentation introduced by FEACO in 2005, the MC market is divided into four segments: Consulting, Development and Integration, Outsourcing and Other services. The Consulting segment is subsequently divided into two sub-segments: Business Consulting (BC) and Information Technology Consulting (ITC). 1. Consulting. These services help private and public organisations to analyse and redefine their strategies, to improve the efficiency of their business operations and to optimize their technical and human resources. 1a. Business Consulting (BC), which includes: Strategy Consulting (SC), which targets the improvement of the long-term, strategic health of a company: strategic planning development; mergers & acquisitions; sales; marketing; corporate communication; financial advisory; HR strategy; Organisation/Operation Management (OM) aims at the integration of business solutions through Business Process Re-engineering (BPR); customer/supplier relations management (CRM); turnaround/cost reduction and purchasing & supply management as well as advise on outsourcing; Project Management (PM); The application of knowledge, skills, tools and techniques to a broad range of activities in order to meet the requirements of a particular project; Change Management (CM), this consists of services which, on top of any other type of consulting service, help an organisation deal with the effects that change has on the human element of the organisation; Human Resources Consulting (HR): Consulting services which target the improvement of the people element of an organisation through performance measurement and management, reorganisation of benefits, compensations and retirement schemes, HR strategy and marketing, the development of talent strategies and executive coaching. 1b. Information Technology Consulting (ITC) helps organisations to evaluate their IT strategies with the objective of aligning technology with the business process. These services include strategic planning and conceptions, operations and implementations. 11

12 2 Europe Market Size, Forecast & Analysis 2. Development and Integration that concerns: the development of applications (excluding software); the creation of new functionalities through, often tailored, process developments. Usually these developments integrate or unite internal or external business processes and can involve a conversion of applications so that they can be used for different platforms or conceptions, the design of services which integrate applications which were created in different existing IT applications or infrastructures (systems integration -development); the deployment and integration of applications; the implementation of new applications or infrastructures, which refers to the instal-lation of hardware and/or software, their configuration or adaptation and the testing of their interoperability; and of services which integrate applications which were created in different existing IT applications or infrastructures and the management thereof (systems integration). 3. Outsourcing, which consists of three types of activities: IT management services; among these are services for the operation of infrastructures (operation of systems, administration and security, follow up of cost-effectiveness, configuration management, management of technology, etc.) applications management, and help desk management; Applied Management Services (AMS); this concerns the outsourcing of the development and implementation of support services for hardware, applications, CRM and infrastructures (tools for the development of applications and middleware, as well as software for information management, storage or systems and networks); Business Process Outsourcing (BPO); this service supposes the externalisation of a complete business process. 4. Other Services, which consist of a variety of offerings provided by many MC companies that are generally complementary to Consulting, Development and Integration, and Outsourcing. Categories here include: Training, Engineering Consulting, Outplacement, Executive Selection and Recruitment and Audit and Accounting composition of MC Market by Service Line, 2010 Business Consulting is the most robust service line having increased by 7% points between 2009 and 2010 and it now accounts for 50% of the MC Market. Another interesting realignment took place in 2010: Development & Integration (19%) has overtaken IT Consulting (15%) and Outsourcing (12%). Other Services, already small, lost 2% point and now its share stands at 4%. Figure 7. Breakdown of Turnover by Service Line, 2010 Outsourcing 12% Other Services 4% Development & Integration 19% % 50% Business Consulting IT Consulting 15% 12

13 2 Europe Market Size, Forecast & Analysis Breakdown of Business Consulting Turnover, Only one line of Business Consulting declined from 2009 to 2010 and that was Project Management (from 18% in 2009 to 9% in 2010). All other service lines either preserved their shares of BC turnover such as Organizations/Operations Management (OM) with its 37% and HR Consulting with its 11%, or increased their shares of BC turnover as was the case for Strategy (from 24% to 29%) and for Change Management (from 11% to 14%). 11% 4% 12% 9% 10% 11% 11% 11% 14% Figure 8. Breakdown of Business Consulting Turnover, % 18% 9% 43% 33% 37% 37% 30% 27% 24% 29% Year Strategy Organisation/Operations Management Project Management Change Management HR Consulting Breakdown of Consulting Turnover, 2010 Figure 9 shows that in the breakdown of consulting turnover there was a slight change in 2010 compared to Business Consulting now covers 77% of consulting turnover and IT Consulting now stands at 23% share. Nevertheless, a slow but continuous tendency can be seen from 2007 onward, with the role of Business Consulting strengthening at the expense of IT Consulting. Figure 9. Breakdown of Consulting Turnover, 2010 IT Consulting 23% % 77% Business Consulting 13

14 2 Europe Market Size, Forecast & Analysis Breakdown of Turnover from Other Services, 2010 In 2010 Executive Selection/Recruitment/Outplacement gained 2% compared to last year s data, however, it still did not reach the level of 2008 (59%) or 2007 (68%) level. Audit retained its share with its 19%, while Training and Other Services recorded respectively a 2% and 1% growth compared to Engineering now stands on the same level as it did in 2009, while Market Surveys lost 5% of its share by Figure 10. Breakdown of Turnover from Other Services, 2010 Other 18% Market Surveys 1% Engineering 2% Training 9% % 51% Executive Selection/ Recruitment/ Outplacement Audit 19% 2.3 Analysis by Client Sector composition of the MC Market by Client Sector, 2010 In 2009 the demand for the top three Client Sectors was almost equally distributed, but by 2010 Banking & Insurance can be clearly differentiated with its 25.6%. Industry and Public Sector while closely following each other exchanged their ranking, with respective 19.8% and 18.7%. Although all of the other sectors remained below 10%, the growing role of Energy & Utilities is notable; it had 7% in 2007 and, steadily increasing, it has reached 9.5% in Figure 11. Composition of the MC Market by Client Sector, 2010 Wholesale & Retail Healthcare (pharmaceuticals & biotech included) 3.3% 3.6% Aerospace & Defense 2.0% Other 4.6% Transport & Travel 5.2% 25.6% Banking & Insurance Telecoms & Media 8.2% % Energy & Utilities 9.5% 19.8% Industry 18.7% Public sector 14

15 3 Selected European MC Markets 3 Selected European MC Markets 3.1 Analysis by Country Growth Rates Breakdown by Country Region, 2010 Regarding the size of European MC Markets, the average growth rate is 2.9% in 2010 Figure 12 presents the change in the size of MC Markets in 13 European countries one by one. The negative extreme of 2010 shows much more moderate numbers than last year s extreme in 2009 a -32.6% decline was experienced in Bosnia & Herzegovina, while in 2010 the highest decline occurred in Hungary at -12%. From the 13 European countries 6 experienced setbacks while 7 countries reported increases. These 7 countries are the United Kingdom (1%), Slovenia (1.1%), Spain (3.5%), Portugal (4.8%), France (5%), Germany (5.3%) and Switzerland (5.6%). Countries that experienced modest declines are Italy (-0.8%) and Denmark (-1.5%); countries with moderate declines are Romania (-7%) and Ireland (-7%); and countries with significant declines are Greece (-11.2%) and, as already noted, Hungary (-12%). 8% 6% 4% 3.5% 4.8% 5% 5.3% 5.6% Figure 12. Growth Rates Breakdown by Country, % 0% -2% -1.5% -0.8% 1% 1.1% -4% -6% -8% -7% -7% -10% -12% -14% -12% -11.2% Hungary Greece Ireland Romania Denmark Italy United Kingdom Slovenia Spain Portugal France Germany Switzerland Compared to last year s expectations, several countries estimated their situations in 2010 in a realistic way; however, several were too optimistic and three countries underestimated their growth rates. Germany provided a nearly correct estimate; countries that underestimated the recession were Greece, Hungary, Ireland and Romania. Meanwhile, France, Switzerland and the UK underestimated their own performances. For 2011, several countries delivered their estimations, which can be seen on Figure 13. According to this, it can be stated that four countries out of six expect different levels of growth (Italy, France, Switzerland and Romania), one country (Ireland) expects no change for 2011 regarding its growth rate, and from the countries that provided estimations for 2011 only one (Greece) forecasted a 3% decline. So the overall picture of expectations from the participating countries can be stated as optimistic in regard to the year % 8% 9.4% Figure 13. Growth Rates Estimations Breakdown by Country, % 6% 6% 4% 2% 2% 0% 0% -2% -4% -3% Greece Ireland Romania Switzerland France Italy 15

16 3 Selected European MC Markets management Consulting as a Percentage of GDP, 2010 Figure 14. Management Consulting as a Percentage of GDP, 2010 The contribution of the MC sector relative to the listed countries GDP can be seen in Figure 14. In 2010 two countries recorded the ratio of MC to GDP reaching in excess of 1%, namely the United Kingdom and Germany. Two other countries are nearing the 0.8% to 1% range; these are 1.2% 1.0% Spain and Sweden. Seven countries belong to the third percentage range between 0.4% and 0.8%. Finally, there are eleven countries in the fourth cluster between 0.2% and 0.4% and only two countries are in the last category at below 0.2%. 0.93% 0.95% 1.1% 1.13% Percentage 0.8% 0.6% 0.4% 0.2% 0.0% 0.09% 0.09% 0.2% 0.22% 0.22% 0.25% 0.25% 0.26% 0.27% 0.28% 0.29% 0.31% 0.34% 0.72% 0.63% 0.53% 0.55% 0.46% 0.73% 0.77% PL GR IT HU NO BG HR CH RO IE CY CZ BE FR NL AT FI PT DK SI ES SE UK DE Country mc Turnover and GDP in Selected European Markets, 2010 Table 3 reveals the main economic characteristics of the selected European MC markets, listing the GDP data and growth and some ratios of MC market relative to the GDP. There is no significant relation found between GDP growth and MC growth, with wide variations in this ratio from country to country. Such differences can be attributed to divergent economic and non-economic, including prevalence and popularity of MC in the client base. Table 3. MC Turnover and GDP in Selected European Markets, 2010 Country GDP (million ) 2010 Share of total economy of countries considered GDP growth 2010 MC growth 2010 Total turnover of MC firms 2010 Total turnover of MC firms as % of GDP Germany % 3.7% 5.3% % France % 1.5% 5% % United Kingdom % 1.8% -1% % Italy % 1.3% -0.8% % Spain % -0.1% 3.5% % Netherlands % 1.7% % Switzerland % 2.7% 5.6% % Belgium % 2.3% % Poland % 3.9% % Sweden % 5.6% % Norway % 0.3% % Austria % 2.3% 9.8% % Denmark % 1.7% -1.5% % Greece % -3.5% -11.2% % Finland % 3.6% 3.5% % Portugal % 1.4% 4.8% % Ireland % -0.4% -7% % Czech Republic % 2.7% % Romania % -1.9% -7% % Hungary % 1.3% -12% % Croatia % -1.2% % Bulgaria % 0.2% % Slovenia % 1.4% 1.1% % Cyprus % 1.1% % Total of selected countries * Figures edited in italic represent estimated data. Source of estimations: applying the trend gained from previous years Feaco Reports data. 16

17 3 Selected European MC Markets Breakdown between Management Consultants and Support Staff, 2010 Overall for the total market, the ratio of Consultants to Support Staff was 77% to 23% in This result differs from that of the previous year when the ratio stood at 82% to 18%. For a one-year interval, this is a significant change. At the two extremes, are the United Kingdom with 97% Consultants to 3% Support Staff, while at the other end Austria shows only 37% of the people working in MC as Consultants and 63% belonging to Support Staff. Tradition, current preferences, compensation patterns, diverse client base and other factors explain some of these sharp differences among the various nations. Germany Austria UK Italy Finland Portugal Consultants 73% 37% 97% 81% 58% 60% Support Staff 27% 63% 3% 19% 42% 40% Total staff Table 4. Breakdown between Management Consultants and Support Staff, 2010 Romania Hungary Switzerland Ireland Slovenia Greece Consultants 80% 92% 85% 89% 88% 88% Support Staff 20% 8% 15% 11% 12% 12% Total staff Key Figures of Selected European MC Markets The country rankings have remained practically the same since 2005, when Germany achieved the first position overtaking the United Kingdom. In 2009 the median turnover per employee for the listed countries equals in comparison to 2009, which stood at The mean was in 2010 (2009: ). The countries are grouped in the following turnover per employee categories (the same clusters could be used as in 2009): A turnover per employee rate equal to or less than can be found in 5 countries (Austria, Romania, Hungary, the Czech Republic, Poland) which together account for 3.4% of the European MC market in In 2010 a turnover per employee between and was realized in 11 countries: Bulgaria, Cyprus, Portugal, Spain, Slovenia, Italy, Finland, Greece, Croatia, Ireland and Belgium. In 2010 the turnover per employee rate exceeded in 8 countries Netherlands, Germany, Denmark, France, Norway, Sweden, Switzerland and the United Kingdom. 17

18 3 Selected European MC Markets Table 5. Key Figures of Selected European MC Markets Country Total turnover of MC firms 2010 (million ) Total turnover of MC firms 2009 (million ) Share of MC market in Europe 2010 Total staff 2010 Turnover per employee ( ) Germany % United Kingdom % Spain % France % Sweden % Netherlands % Italy % Denmark % Austria % Portugal % Belgium % Finland % Switzerland % Norway % Czech Republic % Ireland % Romania % Poland % Slovenia % Hungary % Greece % Croatia % Bulgaria % Cyprus % Total of selected countries % * Figures edited in italic represent estimated data. Source of estimations: applying the trend gained from previous years Feaco Reports data. 3.2 Analysis by Daily Rates Average Daily Fee Rates of Selected European MC Markets, 2010 Table 6. Average Daily Fee Rates of Selected European MC Markets, 2010 Daily fee rates are the most difficult to obtain in any given year. In 2008 only four countries (Greece, Finland, France and Germany) could provide these data, in 2009 this number increased to six (Croatia, France, Germany, Greece, Hungary and Switzerland; in 2010 also six countries were willing to provide these data, however, not the same ones as in the previous year. In 2010 Finland, Greece, Hunga- Daily rates of Management Consulting Hungary 400 Greece 440 Romania 500 Italy 745 Finland 960 Switzerland ry, Italy, Romania and Switzerland have given data on daily rates of Management Consulting. These six countries can be further classified into two groups: Hungary, Greece and Romania belong to one group with lower level of daily fee rates ( 400, 440 and 500) while the second group includes Italy, Finland and Switzerland ( 745, 960 and 1250) respectively. The first group is a cluster in the Central and Eastern European region, while the second group is situated in Western Europe and the Nordic region. There is indeed a large gap between the two groups with more than a twicefold order of magnitude in the amounts received for a day. Specifically, the mean of the three CEE countries is 447, while the mean of the three WE +Nordic countries is Export of MC Services by Selected Countries, 2010 The average market share for Export of MC Services in the selected 14 countries is 16.1%. Regarding total exports, Finland is first with its 26.8% share and Ireland exports only 8%. If we separate export activity considering its destination, Hungary, Switzerland, Austria, Romania, France, UK, Ireland and Italy remained under 5% exporting to countries outside Europe and it is Spain which exported 18

19 3 Selected European MC Markets the most at 10%. For countries inside Europe, the greatest exporter is Hungary with its 19% and Portugal at the other end at 5% relative to their own national MC turnover. Eleven of the fourteen countries export more to European countries and three countries export more to countries outside Europe. 25% 20% Figure 15. Export of MC Services by Selected Countries, % Export 10% 5% 0% Finland Hungary Greece Spain Switzerland Austria Slovenia Germany Portugal Romania France UK Italy Ireland Total 26.8% 23% 21.1% 21% 21% 17% 15.5% 15% 13.1% 12.8% 12% 10% 8.9% 8% Outside Europe 8.1% 4% 8.2% 10% 4% 3.1% 8% 9% 8% 2.5% 4% 4% 0% 2% Inside Europe 18.7% 19% 12.9% 11% 17% 13.9% 7.5% 6% 5.1% 10.3% 8% 6% 8.9% 6% 3.3 Analysis by Service Lines mc market Composition by Service Line (% of Turnover), 2010 There is still a remarkable dominance of Business Consulting within Management Consulting with the share of BC within MC at more than 50% in all examined countries historically; however, in 2010 a new tendency can be observed. In eight of the twelve selected countries BC is still higher than 50%, but now other major service lines have also become significant. Development and Integration and Outsourcing are quite strong in Spain (42% and 40%), Other Services plays a key role in Portugal (57.3%), while Development and Integration is above 10% in Germany, Spain, and France. Above 10% is IT Consulting in Germany, United Kingdom, Spain, Austria, Ireland, Slovenia, and Hungary. Above 10% are Outsourcing in Spain and France as well as Other Services in Portugal, Finland, Ireland and Greece. Germany United Kingdom Spain France Austria Portugal Finland Switzerland Ireland Slovenia Hungary Greece Total turnover (million ) Major service lines (%) Business Consulting (BC) 54% 74.1% 6% 62.1% 69.9% 42.7% 62.6% 57.6% 69.5% 47% 73.9% IT Consulting 15.5% 25.9% 12% 6.4% 18.8% 8.6% 16.8% 13% 36% 4.6% Development & Integration 19.5% 0% 42% 16% 0% 9.2% 9.1% 7% 8% 4.1% Outsourcing 6.4% 0% 40% 15% 2% 5.4% 4.4% 2% 4% 1.5% Other services 4.6% 0% 0% 0.5% 9.3% 57.3% 14.2% 12.1% 9% 5% 15.9% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Table 7. MC Market Composition by Service Line (% of Turnover), 2010 BC Details Strategy 16.6% 7% 3% 8.6% 36% 9.4% 24.8% 29% 16.2% 22.5% 10% 17% Organisation/ Operations Management Change Management Project Management 16.4% 36.7% 3% 37.1% 16.5% 27.6% 14.7% 71% including IT Consulting 13% 29.5% 22% 25.6% 6.5% 19% 0% 0% 3.2% 11.3% 15.7% 4.5% 8% 26.5% 7.1% 4.8% 0% 14.3% 0% 0% 5.1% 5.9% 6.5% 3% 2.5% HR Consulting 7.4% 6.6% 0% 2.1% 17.4% 2.5% 6.7% 6.8% 6.5% 4% 2.3% Total 54% 74.1% 6% 62.1% 69.9% 42.7% 62.6% 57.6% 69.5% 47% 73.9% 19

20 3 Selected European MC Markets mc market Composition by Service Line (million ), 2010 Table 8. MC Market Composition by Service Line (million ), 2010 Germany United Kingdom Spain France Portugal Austria Finland Switzerland Ireland Slovenia Hungary Greece Total turnover (million ) , Major service lines ( ) Business Consulting (BC) IT Consulting Development & Integration Outsourcing Other services BC Details Strategy Organisation/ Operations Management Change Management Project Management HR Consulting Total Discrepancies in total BC of UK are based on differentiated calculation method Breakdown of MC in Selected Key Countries (million ), 2010 The breakdown of MC in four key countries is presented in Figure 16. In Business Consulting we find Germany closely followed by the UK in dominating the market; the next two are France and Spain. Regarding Development and Integration, we find Germany in first place, followed by Spain. The turnover of IT Consulting is the highest in the UK and Germany is second; this is a change compared to last year. Outsourcing proved to be a significant service line in Spain. Surprisingly, in the UK in 2010 Outsourcing does not appear, however, in 2009 in the UK it was the second largest service line. Other Services only appear in the case of Germany. Figure 16. Breakdown of MC in Selected Key Countries (million ), 2010 Total turnover in million Germany United Kingdom Spain France Business Consulting (BC) Development & Integration IT Consulting Outsourcing Other Services Total

21 3 Selected European MC Markets Breakdown of Business Consulting in Selected Key Countries (million ), 2010 In further analysing Business Consulting (BC), we can state that Strategy has strengthened its role in Germany, but lost in importance in the UK, France and Spain. Organization/Operation Management (OM) dominates the BC Market in the United Kingdom and in France. Nevertheless, OM is back to back with Strategy in Germany and accounts for the same as Strategy in Spain. Change Management and Project Management are close to each other in case of Germany. In the UK Change Management has strengthened its role at the expense of Project Management. Human Resource (HR) Consulting enlarged its share only in Germany and has lost some ground from its previous importance in the UK and France Total turnover in million Germany United Kingdom Spain France Strategy Organisation/ Operations Management Change Management Project Management HR Consulting Figure 17. Breakdown of Business Consulting in Selected Key Countries (million ), Analysis by Client Sector Considering the whole European MC Market, the three most significant sectors were Public Sector, Banking & Insurance, and Industry in 2010, the same as in 2009, however, their order has changed. In 2010 the Public Sector had 20.7%, Banking & Insurance 20.1% while Industry 18.7% of the total mc market Composition by Client Sector (% of Turnover), 2010 In 2010 the Public Sector was dominant in four countries, in the United Kingdom, Ireland, Hungary and Greece. Banking & Insurance was the most important in the turnover in two countries, Spain and France. Industry contributed to turnover to the highest degree in Germany, Finland, Switzerland and Slovenia. Germany United Kingdom Spain France Finland Switzerland Ireland Slovenia Hungary Greece Total turnover (million ) Industry 32.4% 6% 6% 14.5% 38.7% 27% 9.8% 29.5% 11% 11.9% Banking & Insurance 23.7% 24.4% 25% 30% 5.1% 26% 21.6% 14.5% 25% 5.6% Public sector 10.1% 29.9% 16% 15% 11.8% 9% 27.3% 13% 28% 46.6% Aerospace & Defense 0% 1.7% 8% 3% 0% 0.1% 0% 0% Telecoms & Media 8.2% 3.6% 17% 5% 8.3% 5% 13.3% 7.5% 9% 12.7% Wholesale & Retail 4.3% 3% 5% 9.4% 5% 3.8% 7.5% 8% 6% Energy & Utilities 7.6% 9.7% 11% 11% 7.3% 6% 7% 13.5% 14% 3% Transport & Travel 5.3% 3.1% 9% 4% 2.8% 5% 4.7% 2% 1% 1.9% Healthcare (pharmaceuticals & 3.5% 3.3% 2% 3% 7.7% 15% 7.1% 5.5% 3% 2.8% biotech included) Other 4.9% 3% 3% 8.6% 0% 2% 5.3% 7.5% 1% 9.5% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Table 9. MC Market Composition by Client Sector (% of Turnover),

22 3 Selected European MC Markets mc market Composition by Client Sector (million ), 2010 Table 10. MC Market Composition by Client Sector (million ), 2010 Germany United Kingdom Spain France Finland Switzerland Ireland Slovenia Hungary Greece Total turnover (million ) Industry Banking & Insurance Public sector Aerospace & Defense n. a. 0 n. a. 0 0 Telecoms & Media Wholesale & Retail n. a Energy & Utilities Transport & Travel Healthcare (pharmaceuticals & biotech included) Other Key Market Composition by Client Sector In the four key countries the order of the client sectors based on their turnovers in volume is as follows: In Germany the main purchaser of consulting services is Industry, in the United Kingdom it is the Public Sector, and in Spain and France it is the Banking & Insurance sector. Industry in Germany generates turnover eight times higher than this sector does in the UK. The turnover in the UK generated by the Public Sector exceeds more than twice its equivalent in the other three key countries. Figure 18. Turnover of Key Markets by Client Sector Turnover million euros Germany United Kingdom Spain France Total Aerospace & Defense Healthcare (pharmaceuticals & biotech included) Wholesale & Retail Other Transport & Travel Energy & Utilities Telecoms & Media Public sector Banking & Insurance Industry

23 4 main Trends in Management Consulting in 2010/ Main Trends in Management Consulting in 2010/ Austria The total turnover of the Management Consulting market in Austria accounted for 1581 million in As Austria did not participate in surveys in previous years, we can only compare its current results with other countries. The growth rate of Austria was 9.8% in 2010 and this is the highest rate among the examined countries. Among key service lines Business Consulting dominates with almost 70% and IT Consulting is the second major service line. The 88.7% of the consultancy assignments derive from the private sector. Regarding Austria s export activity, it exports consulting services to countries within the EU mainly (81.8%) but has almost one-fifth of is volume with countries outside the EU (18.2%). The number of consultants compared to total employment in the MC sector stands at 58%. Austria Total turnover (million ) Growth rates Growth rate 2009 Growth rate % Growth rate 2011 (prevision) Key service lines (%) Business Consulting 69.9% IT Consulting 23% Development & Integration 0% Outsourcing 2% Other Services 5.1% Key sectors (%) Private sector 88.7% Public sector 11.3% Export (%) 17% EU 13.9% Countries outside the EU 3.1% Number of consultants Total staff Denmark In 2010 Denmark provided data concerning the total turnover in 2010, which accounted for 1717 million ; their growth rate in 2010 was -1.5%. They highlighted that the ratio of their assignments coming from the Public Sector is 35.2%. Compared to last year s results this figure has decreased as in 2009 the Public Sector was the most significant one with 43.7% followed by Industry. Denmark Total turnover (million ) Growth rates Growth rate % Growth rate % Growth rate 2011 (prevision) Key service lines (%) Business Consulting IT Consulting Development & Integration Outsourcing Other Services Key sectors (%) Industry Banking & Insurance Public sector 35.2% Export (%) EU Countries outside the EU Number of consultants Total staff 23