Consultancy revenue hits £3bn at top accounting firms
The consulting arms of UK accounting firms, notably the Big Four, accounted for nearly 40% of all revenues earned in the UK consulting market in 2017, winning the majority of the work in the financial services market and representing the fastest growing firm segment, according to a report from Source Global Research
26 Mar 2018
The consultancy says accountancy firms’ consulting arms grew by 7.3% to £3bn in 2017, compared to the wider consulting market growth of 6.1% to £7.8bn during the same period, through a combination of organic and inorganic growth.
The report suggests that these firms are eager to build up their digital arsenals as the value of digitisation work performed in the UK consulting market jumped from £1.7bn in 2016 to almost £3bn in 2017, or 37% of the total UK consulting market. With this rapid rate of growth in mind, accounting firms are working hard to become the go-to firms for big, digital transformation projects, it says.
Fiona Czerniawska, director of Source Global Research said: ‘The Big Four have once again outperformed the competition in the UK consulting market. Their size allows them to offer a great breadth and depth of both sector and service line knowledge, which may make them a natural fit for the rapidly growing digital transformation market.
‘However, it’s not at all certain that they will ultimately be successful in staking out this territory all for themselves, as many clients still see them offering less technology expertise than traditional technology firms and less strategy expertise than strategy houses.’
The Source report also says that digitisation is colonising all projects and all traditional consulting services, absorbing parts of strategy, operational improvement, risk, regulatory, and human resources and change management work. For instance, over half of all strategy work in the UK is now digital-related, an even bigger share than in the technology service line, where over 40% of all work is driven by digital.
Czerniawska said: ‘From being largely concentrated in the technology and strategy service lines, digital is now starting to make up a part of all consulting services. In fact, its speed of colonisation is such that within the next 18 months, we believe it will no longer be necessary to label anything as digital in the UK consulting market – as everything will be digital in one way or another.’
The Source report suggests that, despite UK consulting revenues continuing to climb, the market is going through a turbulent period, owing to both global economic instability and Brexit.
Zoë Stumpf, head analyst at Source Global Research, said: ‘Brexit is the biggest question mark hanging over the sector. It still has potential to be a huge driver of demand, if no reciprocal arrangements with the EU are made, or something of a red herring, if deals are struck and business carries on more or less as usual. Only time will tell.’
Despite this domestic and global economic uncertainty, Source expects the UK consulting market to maintain its current rate of growth, expanding another 6% this year.
Report by Pat Sweet