Revisiting our five big numbers for 2017

By Fiona Czerniawska.

Back in January this year we talked about five big numbers that, we felt, would define 2017. Nine months on it feels like the right time to revisit these and gauge the extent to which the year has—or hasn’t—lived up to our expectations.

#1: 7%: This was our forecast growth for the global management consulting industry in 2017, and at the time we commented that it might feel too optimistic to some, as many firms began the year after a slower second half to 2016. Our sense is that our prediction will turn out to be about right. Demand, especially around digital transformation continues to be very strong (we’re anticipating 17% growth this year in that market), but it’s also cannibalising many conventional service lines. The result is that some firms are growing well in excess of 7%, but others are doing much less well. Many firms report fairly volatile conditions, with a good month being followed by a bad one. In summary, a strong market so far, but with just a hint of fragility.

#2: 85: At the start of the year, we counted 85 different products and solutions being offered by McKinsey alongside its more conventional consulting services. It was a strategy, we surmised, that was partly driven by the desire to drive efficiency (see #3 below), but also by the need to communicate the firm’s full range of services and intellectual property to an audience mesmerised by its big brand. The sub-branding debate continues to rage, with an increasingly number of sub-brands emerging, if not being explicitly launched. This strategy has, however, only succeeded in moving the problem (what a firm does and how the different moving parts fit together) from the public arena to the private one. One of the biggest complaints we’re hearing from clients at the moment is that firms aren’t being joined-up behind the scenes. Transformation consulting depends on integrating a wide range of different services, but it isn’t going to work if you don’t have the organisational model to match.

#3: 72%: This is the proportion of the consulting industry that could, we think, be performed by intelligent machines over the course of the next 10 years. To what extent have we seen the first steps in that direction during 2017? Unquestionably, this has become one of the hot topics of conversations when we speak to the managing boards of consulting firms. It’s gone from the equivalent of zero to 60 miles an hour in just over a year. And it’s not just talk: there’s plenty of investment going into this space. Our experience, however, is that it’s the activity that is very piecemeal: There are some genuinely fantastic ideas out there, but they’re often being developed on the fringes of firms’ mainstream business and we’re only just starting to see signs of coherent, comprehensive strategies emerging.

#4: $20bn: That’s how big we thought the global digital transformation consulting market was at the start of 2017 (and, remember, our numbers don’t include implementation, or hardware, or software). Alongside growth, what we’ve seen has been a growing sense of ambition on the client side: Instead of becoming more of a commodity (which we might have expected, given the volume of work being carried out and the number of suppliers who claim to be experts in this space), digital transformation is becoming even more of a strategic issue, with boards increasingly recognising its potential, not only to change their businesses significantly, but to reinvent entire industries. There’s a good and bad side to this. The upside is clearly growth (see #1 above); the downside is that, as Shakespeare’s Macbeth says, “vaulting ambition…. overleaps itself”. Clients, pinning ever more unrealistic hopes to their transformation projects, may end up being disappointed (or worse, look what happened to Macbeth). As an industry, consulting has been here before.

#5: 61%: That was the proportion of clients that we surveyed in the US who said that they were already involved with, or planning, initiatives related to robotic process automation and/or artificial intelligence. Subsequent research has revealed a complex picture: demand for RPA support is growing very rapidly, but it’s often unfocused, because the applications haven’t been precisely defined and because of the range of possible technology choices. As a result, we worry that this market, far from being the next big blockbuster consulting service, may in fact be rapidly commoditising. AI may be another story, but it still feels a long way off…