One of my favourite aspects to being at Polestar is working on proposals for prospective clients. This is a task that requires both research in the client field but also a bit of creativity to make a proposal unique in the “Polestar way”.
Recently, I drafted a proposal for a client in the consulting sector and found new insight for 2021 and beyond.
According to the Management Consultants Association (MCA), the consulting sector beat its expectations for 2020 with 2.5% growth, despite COVID-19 and Brexit pressures. The outlook for consulting in 2021 is growth up to 9% in the next 12 months. The greatest area of growth is expected to be in digital technology as the sector keeps up with the digital transformation of UK businesses.
The UK remained the second global market in the management consulting sector for 2020. While it has a long way to go to catch up with the US as global leader, the positive outlook for 2021 shows how much consulting is growing within the UK.
To see how you can take advantage of this growing market, here are some industry trends to look for:
After this pandemic, the importance of technology became prominent for all UK businesses. There is no surprise that the greatest growth in consulting will be digital.
Consulting used to be a labour-intensive field, however, the sector is now exploring its own path with digitisation. AI and automation can become useful tools for consultants to process and analyze large amounts of data. These tools can then provide faster and more accurate insight for businesses, such as sales, customers, operations, supply chains, etc. Finding new new opportunities and developing strategies for clients will be easier than before if there comes a digital transformation.
Increasingly we are seeing clients develop their own software solutions. In some cases, these solutions are becoming more valuable than the original business. The challenge here is of course find way to commercialise the software, whilst not cannibalising the consulting firm’s advantage.
The people will continue being the main focus in this sector. Consulting firms help businesses understand the environments in which they opperate, which reduces risk, saves time and money by supplying sector experts to help meet their immediate needs. Consultants will still be subject matter experts (SME) in the fields that they work in, but increasingly need to adapt their skill set. Continued learning in topics such as AI, big data analysis, and automation, will help facilitate the SME in today’s digital world .
As we see the retail, manufacturing, industrial and healthcare sector innovate with technology, their requirements of consultants will also change. To stay competitive, the consulting firms will must equip their employees with developing skill sets.
Along with a technologically changing world, consultants can help firms face legal and regulatory battles well. Throughout the UK and the US, legislation changes are impacting the consulting sector more than ever. In the US, there are changes regarding intellectual property, while the UK faces Brexit issues with its relationship with the EU and nearly every other global trading partner. Consultants will be there to help firms understand compliance, legal issues, political risk and cyber security – indeed they will have to do this for themselves where they operate across many jurisdictions.
ESG is a fast developing topic within consulting, predicted to be worth over £2bn in 2021. With an environmental focus in the UK reaching net zero carbon emissions, businesses are focusing their operations on ESG policies to become attractive to consumers, clients, and investors. Industry leaders have now created their own initiatives for this demand. McKinsey & Company this year launched McKinsey Sustainability, which will help clients develop ways to cut carbon emissions in half by 2030. McKinsey is fully invested in this platform, which led to the acquisition of sustainability firm Vivid Economics.
These are just a few trends in focus for 2021 and beyond. If you are consulting firm looking to grow your business, investing in the digital space will be vital to becoming more competitive. New client demands, especially in the ESG topic, is also an area to focus on. We would love to hear your plans and see if we can help achieve your goals for 2022!
Despite the continuing turmoil of the pandemic, the UK management consulting sector has demonstrated great resilience and flexibility in supporting clients and has achieved stable growth in 2020 from buyers of consultancy, highlighting the essential need for high quality external professional support during times of crisis