It all sounded rather clubby. On September 1 2004, Accenture UK, the country's biggest consulting and outsourcing firm, announced that its boss, Ian Watmore, was to become the British government's new head of e-government. The head of Accenture's public sector practice, Lis Astall, was to replace him. What better confirmation could there be that the private sector was tiring of the consultants' special brand of thin air? Management consulting's future was said to lie in the public sector, as close as possible to the new Labour managerial establishment.
Now it looks as if the theory must be revised. Ms Astall, a 20-year Accenture veteran, notes that while 2004 was a bumper year for government contracts, they still only account for "between 10 and 15 per cent" of Accenture's business in the UK. The most important sector for her consultants is financial services, exemplified by such big projects as a £400m10-year outsourcing and information technology deal with Barclays Bank.Accenture, she says, has resisted becoming dependent on the fortunes of any one service or sector, preferring a presence in multiple industries.
"There are waves to these things," she says. "Government certainly accounted for a lot of the recent growth, with a run of contracts being agreed, and the hunt for cost savings attached to the efficiency review process [the Gershon review]. But it can take two years to negotiate a contract, so I expect government will go quiet for a bit and the battle for new business models and value creation in the private sector will take up the slack."
In 2004, Accenture grew by 19 per cent, taking revenues to £1.2bn and outpacing the company's overall global performance of 16 per cent growth.Unlike many consultancies, Accenture even managed to keep hiring during the downturn of 2001-2002.According to analysts Ovum, this success is built on more than simply a broad-based portfolio: the ability to sell "transformational outsourcing" - the bundling of big information technology assignments with outsourcing and consulting. Yet Ms Astall resists picking out any single theme as being responsible for recent performance.
Instead, she argues that demand for consultancy varies heavily between marketplaces. In banking, clients want advice on innovative ways to grow and sell in saturated, heavily regulated markets. In utilities and insurance, techniques of responding to customer behaviour, such as customer relationship management and "propensity modelling", remain a prime selling point. In retail, it is supply chains.
Only in the popularity of business process outsourcing - where companies hand over transactional processes to third party specialists - does Ms Astall see a client trend. Out of Accenture's 10,500 UK staff, 500 work on outsourcing alone. Ovum credits the $575m (£302m) human resources outsourcing deal Accenture signed with BT in February as a sign of the buoyancy of the outsourcing market.
"The assignments we are facing as consultants are no longer just about cutting costs," says Ms Astall."If it were straightforward, clients would do it for themselves. The projects are tending to be much more sophisticated and complicated, involving many different components of which one is frequently outsourcing and offshoring. But I just don't think you can say the growth is down to any one thing."
While some observers say white collar process work will increasingly be outsourced, Ms Astall does not believe the move is necessarily permanent.
"Some of it will of course go offshore -Brazil, Russia, India and China are all placing themselves to receive this kind of work. But companies are experimenting with what business will work offshore and stay there and what will have to come back."
Recent months have not been quite so kind to Accenture. It has had its pride, and possibly its revenues, hurt by some public criticism from a client in the form of J Sainsbury. Justin King, who took over as chief executive of the supermarket group last year, appeared to blame Accenture for the poor performance of a new stock tracking and logistics system.
And earlier this month, profit margins announced in the US dipped on news of problems on its NHS IT modernisation project.
Cost overruns and deployment delays mean that losses of up to $150m will be incurred on the contract this year. Ms Astall remains quiet on such matters. Yet even on the day the NHS setbacks were announced, Accenture UK still managed to show some good results: second quarter revenues were again up by 22 per cent on a year ago.
Get alerts on Front page when a new story is published