The consulting market in Eastern Europe and Russia grew by 12 percent between 2011 and 2012, making it worth €1.7bn, according to a new report from specialist consulting research group Source Information Services.
The Source report released yesterday says that the strong economies of Russia and Poland were behind the growth, with 17 percent growth in Russia taking the market to €677mn, and 21 percent growth in Poland taking it to €358mn.
Almost all industry sectors in Russia enjoyed double digit growth, led by energy and resources, manufacturing and financial services, where the desire to modernise, improve efficiency and compete globally drove the desire for consulting services. Across Eastern Europe, the growth rates were significantly lower and concentrated in the largest consulting sectors: energy and resources, manufacturing and financial services.
Edward Haigh, a director of Source and an author of the report commented, "Growth and competition sum up Russia's aspirations. Largely due to Russia's entry into the World Trade Organisation, companies are looking for ways to grow and compete on a global stage, hence the huge growth in operational efficiency, technology and strategy consulting."
"In comparison, Eastern European companies need support to implement the strategies they have. They are also increasingly looking to grow globally but are beginning to look beyond cost cutting to top line growth, which is why marketing and selling, the smallest consulting service, showed the strongest growth."
Following a 12 percent growth in 2012, the Source report says that the prospects for consulting in the energy and natural resources sector look good, with the sector set to be the biggest area of growth for consulting firms during 2013.
Commenting on prospects in this sector, Leszek Wronski, KPMG, said, "There are lots of things happening in the energy sector — as the market is opening for competition, so companies have to change. The result is a wide range of projects such as work around management information systems. Companies are trying to understand customers and the economic situation better and there are also big ERP projects in which they're looking for us to help them develop the requirements and specify processes."
Across the region, the report says that companies want global experts — individuals within firms and firms within consulting consortiums. The tarnish on the gleam of the Russian market is an expected slowing of its economic performance, which is further compounded, firstly by the extent of state ownership which tends to make decision making harder, and secondly by the arrival of locally grown firms on the scene. Despite evidence that the economies of both Eastern Europe and Russia are showing signs of faltering, the report says that a similar level of growth is expected in 2013-14.
Geoffrey Nicholson at PwC commented, "We're expecting a very strong market in both Eastern Europe and Russia but it all depends on the global economy. Russian CEOs are the most optimistic and their focus is mostly internal — they feel pretty good about things and they're investing. Russia may not be growing at the Chinese rate but there's still strong growth here, helped by oil prices which will remain high."
Edward Haigh added, "2013-14 looks like another good year for consulting firms, but the diversity and fragmentation of the market is making it difficult for local and western firms alike to navigate the market and seize the opportunities."