Consulting in Germany: the specialisation of specialisation

By Fiona Czerniawska

“We’re always looking for expertise.”  It’s what every German executive says when we quiz them about their use of consultants, to a point where the German consulting market (closely followed by the Swiss and Austrian ones) has become a byword for specialist knowledge.  Vorsprung durch technik isn’t just for cars.

So we’ve been puzzled by some of our research findings which suggest that DACH clients are much less likely as clients in other geographies to be persuaded to buy a lot more consulting by consultants who demonstrate deep knowledge of the client’s sector.  29% of clients in other geographies say that this facet would encourage them to buy a lot more consulting, compared to just 13% in Germany.

Maybe that’s a sign that German clients already think they spend too much on consultants?  No, if anything German clients are more positive about their current expenditure:  59% say the use of consultants is condoned or even encouraged in their organisation (the figure is 35% in other, similarly mature consulting markets) and 55% of the German organisations we’ve surveyed say they expect their spending on consultants to grow in the next year or so.  Perhaps it’s a testimony to the already strong skills of German consultants.  Again, the answer is no: only 9% of clients are confident they can get deep sector knowledge from consultants, slightly lower than the level elsewhere (13%).  Are German clients actually more price-sensitive than we’d realised?  Not a bit of it: German clients are – as we thought – less likely to be swayed by discounts, performance-related payments and even simple price transparency than their counterparts elsewhere.

The explanation lies in the type of specialist knowledge clients are looking for.  Many German organisations have internal consulting units: these, supplemented by a wave of new recruits from the consulting industry and a management culture which stresses continuity and the need to keep good people, mean that industry knowledge is far more readily available than it might be in the equivalent company in the UK or the US.  The specialist knowledge German clients are looking for is different: 27% of German clients will spend a lot more with consulting firms which can demonstrate a business-led approach to technology (the figure is 17% in other markets) and 26% will spend a lot more with consultants who are knowledgeable about different local markets around the world.

Leveraging technology without being driven by it and an understanding of the realities of globalisation will, we think, be the defining characteristics of the German consulting market over the next couple of years.  Just a shame, then, that only one in ten clients is confident they can find consulting firms that have these capabilities.