A new report released today by leading global consulting market analysts, Source Information Services (Source), reveals that the technology, media and telecoms (TMT) global consulting market grew by 4.1 per cent in 2013 to $4.99bn.
However, outside of the US market, which grew by 8.5 per cent in 2013, this remains a tough market in which the rest of the world (excluding the US) grew only a measly 1.8 per cent. The only bright spots outside the US were in relatively small emerging markets such as the GCC, West Africa, and East Africa, which grew by 11.3 per cent, 35 per cent, and 18 per cent respectively.
The two most significant service sectors in the TMT consulting market are operational improvement, valued at $1.69bn, and technology at $1.59bn, with both worth over double the third largest sector. However, both sectors experienced moderate growth in 2013, with operational improvement up four per cent and technology up five per cent.
The Source report says the majority of the work in the TMT consulting market is around business model innovation: monetising products; digitising assets; reaching out to new or under-served customers; improving customer service; bundling services to increase their value; and reducing the time it takes to go to market.
Alison Huntington, Senior Analyst at Source Information Services, said: "The high tech, media, and telecoms sectors each presents their own challenges to consulting firms. In telecoms many markets are dominated by a tiny number of big players. By contrast the media sector is often hugely fragmented and the challenge is about finding clients who are big enough to buy consulting in any meaningful volume. In high tech many of the major players don't buy much consulting — their success and in house expertise means they don't need to."
Client knowledge creates a challenge for consulting firms
The report says that staying ahead of the industry — or even keeping pace — can be very difficult, and it often turns out that clients know an awful lot more than their consultants do. This is particularly true in the high tech industry where many of the technology giants like Google, Facebook, and Apple don't buy much consulting at all, preferring to recruit consultants as their own employees as they have found their new hires' knowledge has been considerably behind their own. One director from a high tech client tells Source; "We hire a lot of strategy consultants, but their knowledge of the market is typically six months behind ours."
Big Data...big opportunity
The report says that Big Data represents a prime opportunity for consultants, particularly those that do not necessarily have world-leading technological expertise, because the sophisticated analytical capabilities that are required to interpret data aren't always available on their clients' in house teams. With the majority of TMT companies, telecoms in particular, having vast stores of data about their customers sitting untapped, there's a real sense of urgency around how they can use this information to improve their customer relationships and be seen as more than a mere utility provider. Therefore, having the skills and knowledge that are needed to tap into this resource means consultants are perfectly placed to advise clients not only on developing new propositions and products but on which customers to target and how to do so.
Alison Huntington from Source added: "Competition in the TMT market may be fierce, but clients in this sector are more keen than their counterparts elsewhere to exploit new opportunities for growth as they scramble to carve out space in an ever more crowded, highly innovative market. In fact, nearly all the clients we surveyed said they'd be taking on growth initiatives in the 12 months ahead, something we expect to have driven a substantial amount of consulting work throughout the year."