UK’s Leading Management Consultants 2019: ratings and analysis
The largest “universal” consultancies again reap the biggest share of recommendations from clients and peers in the 2019 Financial Times survey of the UK’s Leading Management Consultants.
However, a long tail of more specialised firms, often punching above their weight, continues to garner endorsements, as work related to digital transformation fuels the advisory sector.
The list, compiled for the FT by research and data provider Statista, collects recommendations from other consultancies and from clients.
The results are then grouped by consulting service (for instance, strategy or innovation) and by sector, from aerospace to travel, transport and logistics. Firms that are “very frequently recommended” are awarded a “gold medal” in the category, “frequently recommended” receive silver, and “recommended” bronze.
The podium can get crowded. Nine golds were awarded in the financial institutions and services sector, out of 31 consultancies that received “medals” in that category this year.
The overall shape of the list is similar to that of 2018. Eight universal consulting firms — Deloitte, EY, KPMG and PwC, plus McKinsey, Bain, Boston Consulting Group (BCG) and Accenture — received “medals” across at least 23 of the 29 available categories. Deloitte, KPMG and McKinsey again scored gold, silver or bronze in all 29.
A gap then emerges between this Big Eight and the pack — led by IBM and Capgemini, with 14 medals each — reflecting the more specialised nature of some of the other firms.
An Olympic-style medals table approach, in which the number of gold medals decides the ranking position, again gives Accenture the crown (18 golds), followed by KPMG and Deloitte, with 16 and 15 respectively.
A recent survey from the Management Consultancies Association, whose members account for 60 per cent of the £10bn UK consulting industry, is a reminder of the deep penetration of consultants across all sectors of the UK. Some 84 per cent of the businesses polled by the MCA said they employed consultants, with the highest use in financial services (which is one explanation for the number of firms clustered around the biggest honeypot), health and life sciences, and energy.
Unsurprisingly, the next biggest spender on consulting is the public sector, where Accenture, Deloitte, Korn Ferry, KPMG and PwC won gold in the FT/Statista listing. Organisations across public and private sectors polled by the MCA picked efficiency as the biggest challenge for which they seek outside advice, followed by Brexit.
Once again, it seems likely that brand recognition played its part in elevating the largest companies to the top of the FT/Statista table. For the first time this year, respondents were given the chance to name consultancies they would not recommend, with negative marks taken into account in the medal table but not broken out separately. While the survey does not include qualitative results, parsing the rankings does reveal some movement beneath the relatively calm surface.
IBM, for example, rose from fifth to fourth position by number of gold medals, converting silver in 2018 into gold after winning more recommendations in four areas: financial institutions; healthcare; internet, media and entertainment; and “other industrial and metals”, where it was the sole gold medallist.
McKinsey — which has recently suffered a number of reputational blows outside the UK — moved in the opposite direction, from fourth to sixth. In four areas where it took gold in 2018, it managed only silver in the 2019 ranking: energy; innovation; mergers and acquisitions; and organisation and change. The group did, however, move from silver to gold in the oil and gas sector.
The audit operations of the Big Four professional services firms have taken increasing flak in the UK: the groups are coming under pressure to separate their auditing and advisory arms. But there was no noticeable effect on recommendations for the non-audit divisions of the same firms.
Meanwhile, the survey again highlighted the number of firms earning recommendations for quite specialised advisory work, occasionally earning single gold medals alongside the universal firms. Of 187 consultancies featured in 2018, Statista notes that 21 have dropped out and 33 are new to this year’s enlarged listing of 199 firms.
The bulk of consulting revenue is still generated by the larger firms, however. Source Global Research estimated the work done by UK “big consulting” — firms with more than 50 consultants — at £7.8bn in 2017. But it says its survey of 2018 is likely to show some softening. That is partly down to lack of certainty about the Brexit outcome.
“Uncertainty is the one condition that consultants struggle to deal with,” says Source director Edward Haigh.
Another factor affecting last year’s revenues was lucrative advisory work on new financial regulation having passed its peak.
Both the MCA and Source say that digital work is driving consultancy business across the board. Source says digital was worth some £3bn in 2017. For instance, more than half of all strategy work in the UK is now digital-related.
For now, the FT/Statista listing continues to break out digital transformation as a separate function, for which the most highly recommended consultancies this year were Accenture and IBM, but it may be only a matter of time before the label becomes so widely applied that it loses its meaning.