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Global IT Consulting Market


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Global IT Consulting Market

  1. 1. Global IT Consulting Market Landscape<br />
  2. 2. Overview:<br /><ul><li> The global IT consulting market is large at US$ 345 billion (2010). The US is the largest market, accounting for approximately 34% (US $ 119.7 billion) of the global market, followed by Europe and Canada
  3. 3. Globally, the manufacturing sector is the largest consumer of these services. This is the case in the US market as well, with manufacturing being followed closely by the banking and financial services vertical
  4. 4. Globally, the market is highly fragmented with the top five players accounting for 27% of the market. There are a large number of boutique consulting firms who have expertise in specific technologies/solutions
  5. 5. The IT consulting market is highly correlated with economic cycles, as these services are project-based and discretionary. While the market grew rapidly in the 2009s the current global economic slowdown has significantly affected spending on consulting services</li></ul>Consulting industry posted significant growth from 2005 through 2007. However, 2008-2009 marked a challenging period, in light of the global economic slowdown and shrinking corporate budgets. Government budgets have been under pressure as well, at the state and local level, where large deficits loom and tax revenues are down. Corporations, large and small, have been slashing spending, employment and capital investment in a sometimes desperate attempt to pay down debt while cutting costs. This has been particularly hard on some consulting sectors, since corporations and governmental agencies are prime clients for consultancies. In general, major consulting companies, including leading firms in management consulting and HR consulting, along with other advisories such as accounting firms, found themselves with substantial drops in business during 2009, in many cases 5% to 10%. Some companies cut their employee rosters and/or restrained hiring.<br />
  6. 6. IT Consulting Value Chain<br />IT business/strategy consulting forms the top end of the IT consulting value chain, followed by IS consulting, network consulting and integration, system integration and custom application development & maintenance<br />
  7. 7. IT Consulting Market Share<br />The size of the global market for IT consulting services is difficult to pinpoint because many of the functions and services are integrated with the Management consulting market. Kennedy Information estimates that the Global Consulting Market between 2006 and 2010 will average 7.1 percent growth. This reflects the estimated size and growth of the global IT market, which includes consulting related to strategy, operations management, , HR, and business advisory services.<br />Global consulting industry revenues (including HR, IT, strategy, operations management and business advisory services) will be about $345 billion in 2010, according to Plunkett Research estimates. This represents a rebound from about $310 billion in 2009 and $330 billion in 2008. In the U.S., accounting and related services (such as tax preparation), generated an additional $119.7 billion in 2009, down from $128.4 billion in 2008, according to the U.S. Bureau of the Census.<br />
  8. 8. Key Trends and Opportunities in IT consulting<br /><ul><li> Stabilization in pricing
  9. 9. Reemergence of growth as a spending driver
  10. 10. Continued bundling of IT consulting with outsourcing
  11. 11. Rapidly increasing number and range of players
  12. 12. Productization of offerings
  13. 13. Pervasive talent crunch
  14. 14. Stabilization in project size/scope
  15. 15. The current economic slowdown has resulted in significant pressure on billing rates across the IT consulting space
  16. 16. There is an increased focus on ROI (return on investment). Customers are buying solutions which have a demonstrable payback. As a result, vertically integrated, industry-focused companies are increasing their market dominance
  17. 17. Pre-integrated solutions are gaining market share in this environment as they are cheaper, and installation is less expensive and easy</li></li></ul><li>Key Current Issues and Challenges in IT consulting<br /><ul><li> Productivity
  18. 18. Customer satisfaction
  19. 19. Integration Challenges
  20. 20. Business Transition
  21. 21. Cultural conflicts
  22. 22. Acquiring right set of talent
  23. 23. Volatile Market condition
  24. 24. Ever changing technologies
  25. 25. Maintaining long term relationship
  26. 26. Competition
  27. 27. Different government standards, compliance, rules and regulation for different country</li></li></ul><li>
  28. 28. Worldwide business conditions of 2009 have changed the consulting market landscape because more market share was absorbed by the 10 largest providers, reducing the combined share of all other providers by 0.7%, or $491 million. The increase of 0.7%, from 33.4% in 2008 to 34.1% in 2009, is explained by the fact that some smaller providers lost their revenue to some of their larger competitors.<br />The 2009 top 10 market share data shows the 10 largest global suppliers of IT consulting services.<br />Six of the 10 providers outperformed the market average of negative 9% in 2009. Attributes of the outperformers include:<br /><ul><li> Scale: Global IT consulting service providers have scale in their operations to deliver their advice across several geographical regions and domains.
  29. 29. Scope: Advisers operating initiatives for buyers on a global scale have the ability to offer a broad array of consulting services addressing these initiatives broad scope in the advice offered is critically important.
  30. 30. Broad skill base: Consultancies need the right mix of skills, such as for multicultural and multidomain change management, while at the same time offering a deep business process understanding for a large number of industries
  31. 31. Stability: A solid balance sheet and financial stability of the business and IT consulting service provider are critical because buying organizations must mitigate the risk of falling to complete a project or initiative (i.e. a major transformational 18 month long global finance function project)
  32. 32. Strategy: Consulting service providers continually evolve their business strategy through reorganizing, “reskilling” of their resources and redefining service outcome.</li></li></ul><li>Top 10 consulting company’s Revenue, Growth, Market Share (US $ Million)<br />
  33. 33. North America: Top 10 consulting company’s Revenue, Growth, Market Share (US $ Million)<br />
  34. 34. Europe: Top 10 consulting company’s Revenue, Growth, Market Share (US $ Million)<br />
  35. 35. Asia / Pacific: Top 10 consulting company’s Revenue, Growth, Market Share (US $ Million)<br />
  36. 36. Thank You<br />