The ALM Global Forecast: North America Consulting

Sample Report: Global Forecast

The ALM Global Forecast: North America Consulting

Global Consulting Research Series

Lasse PitkaeniemiSenior Director, Research T +1 212-457-9183 [email protected]

Author

For more information, visit the ALM Intelligence website at www.consulting.almintel.com/analysts.

© 2017 ALM Media Properties, LLC 2


Contents

Overview 3

Client Demand Trends 4

Market Size 6

Market Size by Service 9

Market Size by Region 19

Market Structure 22

Definition 24

Methodology 25

About ALM Intelligence 27



Overview

Before the elections of Justin Trudeau and Donald Trump in the late 2015 and late 2016, respectively, the consulting market

in Canada and the US was entering a slumber. GDP was barely growing, M&A market had peaked, no new major regulations

were coming from either Ottawa or Washington D.C., and central banks were starting to taper off their quantitative easing. In

this environment only one consulting spend driver remained: technology. Justin Trudeau’s victory is significant for consulting,

since the change in ruling party from Conservatives to Liberals broke the decade-long streak for conservatives, opening up the

country for new regulatory activity, most likely on the environmental side. The Canadian Liberals are also discussing the full

legalization of cannabis use and cultivation, which was previously unthinkable and would open up an entirely new industry.

When combined with the bottoming out of the commodity price cycle, a boom in consulting for the natural resources &

power industry is to be expected. The election of Donald Trump as US President may have been the biggest shock Western

democracies have witnessed to date, and he is facing plenty of opposition to his agenda from Democrats and Republicans

alike. Nonetheless, business optimism in the US is up with business leaders hoping for regulatory change in US environment,

healthcare, labor, and tax laws to mention a few. Even if Trump fails to pass much of his agenda, business optimism has already

resulted in changes in corporate decision making with new strategic initiatives, growth related investment, and M&A activity,

all of which are largely beneficial for the consulting market.

The North America consulting market seems to be entering a sweet spot. No matter how regulatory changes are going to play

out on both sides of the border, the fact remains that change is afoot and that combined with steady central bank policies

and business optimism are enough to remove regime uncertainty that was dampening consulting spend, particularly during

Obama’s second term. Technological advancements in the form of automation and data analytics are playing an enhanced

role in the North America market and utilizing these two technologies may well become what separates the winners from the

losers in industries such as retail, transportation and even healthcare. What differentiates automation from mere outsourcing

is that where outsourcing simply replaced expensive workers with more affordable ones, automation eliminates them

altogether, enabling companies to backshore their operations from abroad with large cost savings and enhanced branding

to boot. While companies are fully embracing data analytics, they are failing to understand its deeper significance. Instead of

thinking about data as an additional channel to monetize, companies need to view data holistically from basic cybersecurity

issues to branding and moral questions.

Regulatory changes, pent-up investment demand, and fruition of key technologies is changing the trajectory for North

America consulting growth, particularly in the Canadian consulting market. Compared to other regions, the North America

consulting market is more concentrated to a smaller number of large dominating providers.



Client Demand TrendsBuyers of North America Consulting

The North American consulting market is very mature, and the buyers of consulting services come from all industries and

regions. Inside North American companies, we can see the following distinctions:

■ CEOs are preparing to realign their company strategy to match the expected changes in the regulatory environment

■ Business unit heads are focused on improving efficiency through technological change and are keenly aware of the

problems with legacy solutions

■ HR departments are struggling to find the right talent and are willing rethinking their offering packages

Demand Drivers of North America ConsultingConsulting demand derives from company efforts to respond to changes in demand, supply, and technology and regulation

in their markets.

North America Consulting Demand DriversDriver Issue Client Imperatives

Demand

Supply

Technology & Regulation

Source: ALM Intelligence



Client Demand TrendsBuyers of North America Consulting

North America Consulting Client NeedsAs companies respond to these drivers they encounter a number of challenges that furnish the underlying needs that

consultants must meet as they design and deliver solutions to their clients.

North America Consulting Client NeedsClient Function Challenges Consulting Implications

Corporate Office

Front Office

Middle Office

Back Office




Asia

Pac

i�c

EMEA

Latin

Am

eric

a

NorthAmerica

United States

CanadaSouthern Cone

MexicoCaribbean Basin

Brazil Andean Countries United Kingdom & Ireland

Southern Europe

Middle East & Africa

Germanic Region

Eastern Europe

Southern Asia

Southeast Asia, Micronesia & Melanesia

Japan & Korea

Greater China & Mongolia

Australasia & Polynesia

Market SizeMarket Size & Composition

North America makes up approximately xx of the management consulting market, with client spending exceeding $x.x in

2016.

Source: ALM Intelligence estimates

Management Consulting Market

$XX.X Billion



Market SizeConsulting Spending by Industry Sector

Legend: Very Strong Strong Moderate Weak None

North America Consulting Regional Market Trends

Region Growth Trend Market Attributes

Financial Services

Healthcare

Manufacturing





Market SizeMarket Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceConsulting Spending by Service



North America Consulting Top Industry Sector Trends

Service Growth Trend Market Attributes

Corporate Office

Front Office

Middle Office

Back Office




Market Size by ServiceEnterprise Strategy Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceCorporate Finance Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceOperating Model Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceCustomer Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceR&D Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceSupply Chain Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceOperations Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceRewards Management Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by ServiceTalent & Workforce Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by RegionConsulting Spending by Region


North America Consulting Region Market Trends

Segment Growth Trend Market Attributes

Canada

United States





Market Size by RegionCanada Growth Outlook

Base Case Forecast

Forecast Scenarios




Market Size by RegionUnited States Growth Outlook

Base Case Forecast

Forecast Scenarios




Market StructureMarket Share Rankings

The distribution of North America consulting provider market shares is more skewed than the overall management consulting

market. This indicates that larger consulting providers are more prominent in this region.

North America Consulting RankingsRank Firm Total CY 2016 Growth % Change in Rank Market Share

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20




Market StructureStrategic Dynamics




DefinitionsNorth America

North AmericaThe North America consulting market is made up of the

United States and Canada.

United StatesThe US consulting market includes the 48 continental

states and Washington DC, Alaska and Hawaii. It does not

include American Samoa, Guam, the Northern Mariana

Islands, Palmyra Atoll, Puerto Rico, and the United States

Virgin Islands. However, the consulting market in the

British territory of Bermuda is included in the US market

size.

CanadaThe Canada consulting market includes Canada as well as the French territory Saint Pierre and Miquelon, a tiny island located

next to Prince Edward Island.



MethodologyOverview

ALM Intelligence has been researching the management, financial and IT consulting industry for over 40 years, studying

the global consulting marketplace at multiple levels. The resulting market analyses help buyers of consulting services to

effectively target best in class providers, and help consulting providers to identify and evaluate business opportunities.

The research is conducted around three primary dimensions:

■ Consulting Service Lines

■ Client Vertical Industries

■ Global Geographic Regions

The proprietary research methodology comprises four components:

■ Extensive interviews with consulting practice leaders, financial analysts, consulting clients, and clientside industry experts

■ Data and background material from the proprietary library of research on the consulting industry and individual firms

■ Quantitative data collection from primary and secondary sources

■ Key economic data relevant to the sector(s) being analyzed

The research output for a project is derived predominantly from primary research.

Data is obtained through a centralized effort, with teams of analysts collecting, assessing, fact-checking, and refreshing

baseline information on leading consultancies and consulting markets. This information populates an extensive knowledge

base of consulting providers, widely regarded as among the most comprehensive in the world.

Working collaboratively, analysts narrow their research to the most discrete and pertinent intersection of consulting service/

industry/geography.

The experience and knowledge of the analyst team are critical to the success of these research endeavors. Directors and

associate directors average over a decade of consulting and/or analyst experience, with an emphasis on professional services.

Junior analysts typically bring an average of five years of consulting and/or analyst experience.

The group’s long-term relationships with consulting clients and industry leaders are based on trust and respect. ALM

Intelligence’s fundamental goal is to deliver objective assessments and insightful viewpoints on the management, financial

and IT consulting market.



MethodologyHow We Evaluate Consulting Markets

ALM Intelligence’s goal is to deliver objective analyses to help providers of consulting services understand the structure and

prospects of the markets in which they compete in order to assess business opportunities and competitive threats.

ALM Intelligence evaluates consulting trends with respect to a particular consulting area in terms of the following elements:

■ Market Size & Outlook: What is the size of the market in the context of the consulting area? What are the distribution

and drivers of client spending across geographic regions and industry sectors? What is the outlook for market growth and

how might different scenarios alter the expected trajectory?

■ Market Structure: What is the distribution of providers in the market? How concentrated is the market? What are the

provider-level strategic dynamics that will shape market structure in the context of changes in demand, barriers to entry,

and returns to scale?

■ Client Demand Trends: What are the drivers of client demand? How do client needs influence the nature of consulting

solutions?

■ Consulting Provider Trends: What differentiates providers in terms of their consulting approaches and service delivery

models? How are providers positioned relative to client functions and activities? What differentiates providers’ business

and operating models? How do the attributes of different provider peer groups manifest in patterns of capabilities?

In addition to briefings with consulting buyers and providers, ALM Intelligence uses a mosaic approach to derive its findings.

This incorporates primary research conducted with industry practitioners, academics, and other experts and secondary

research on providers’ public information and other third-party sources of data and analysis.

About ALM Intelligence

ALM Intelligence provides accurate and reliable market sizing and forecasts on consulting services worldwide, needs-analysis

and vendor profiling for buyers of consulting services, timely and insightful intelligence on the top consulting firms in their

respective markets, and operational benchmarks that measure consulting performance. ALM Intelligence’s research spans

multiple service areas, client vertical industries, and geographies. Our analysts provide expert commentary at consulting

industry events worldwide, and offer custom research for Management Consulting and IT Services firms. More information

about ALM Intelligence is available at www.consulting.almintel.com.

ALM, an information and intelligence company, provides customers with critical news, data, analysis, marketing solutions and

events to successfully manage the business of business. For more information, visit www.alm.com.

About the Forecast Consulting Research SeriesALM Intelligence’s exclusive, quantitative assessment of provider size by service segment, industry and geography, creates a

short list for the buyers of the most extensive consulting firms. The forecast consulting series explores nine service segments,

12 industries and four geographic areas.

For further information and to purchase ALM Intelligence research, contact [email protected], 855-808-4550.



The ALM Global Forecast: North America Consulting

Documents