COVID-19 | Update for 17 April 2020

We're all facing unprecedented challenges in the next few weeks and months, in our daily lives, in our communities, and in our businesses. But we're already seeing evidence of how, if we work together, we can make a difference.

It's in that spirit of collaboration that Source has put together an estimate of the impact we think COVID-19 will have on the global consulting industry during the course of 2020. We're very grateful for the input of a wide range of firms from around the world who've helped us do this, providing up-to-the minute information on how we should adjust our existing model of the industry.

While based on the best information we have at the time of writing, our forecast and commentary are intended to be directional, providing guidance for future planning. In an environment where everything is changing very quickly, our predictions will inevitably change. Over the coming months, we will be updating the forecast on a weekly basis. For more information on our data and methodology, please see the end of this bulletin.

Please help us to help you: We've only been able to pull this forecast together so quickly because of the input of the hundreds of firms from all over the world who responded to our initial survey. Please help us by sending us your updates week by week, by following this survey link. Every single one of these responses helps us improve our forecasting.

Summary: 17th April

Although we saw further evidence this week that we may be coming towards the end of the first phase of this crisis from the consulting industry’s point of view, uncertainty around the speed with which normal life will return, and shrinking pipelines of potential work, will make Q2 2020 extremely challenging for most firms. Firms with strong technology consulting practices are likely to do best, as clients begin to recognise that their immediate response to the crisis now needs to evolve into changes that could last months.

Technology consulting will be critical to surviving a very difficult Q2

Most of the firms replying to our survey said that the last week saw only “slight deterioration” in market conditions or even “no change”. As we said in last week’s update, this is an indication that we’re nearing the end of the first phase of this crisis. But we should not be under any illusion that, as we move towards the second phase, the end is in sight.

As proof of that, we only need to look at our numbers for Asia Pacific, where firms were more likely to report “significant deterioration” than they had been previously. With uncertainties remaining about how to balance the need to restart economic activity with ensuring that the virus doesn’t return at scale, buying consulting services is likely to remain low on the list of organisational priorities for some months. We still think that early government intervention means that many important consulting markets in the region will fare better than the average: We estimate that South Korea will shrink by 16%, Japan by 15%, Singapore by 16%, and China by 13%. But the fact that we’ve nudged these predictions downwards will be a worry to consulting firms watching to see how fast client demand will recover once restrictions are lifted—the answer appears to be slowly, at least at first. We’ve consequently reduced our estimates for the size of the consulting market in the region in 2020, from -14% last week to -17% this week.

Because Asia Pacific is still a comparatively small consulting market, equivalent to just 16% of the total, the impact on the global number is negligible: Our headline estimate, that the global consulting market is likely to contract by 19% over the course of 2020, is the same as last week. But the importance of the deterioration in Asia Pacific lies in what it may tell us about the next few months—that the process of economic recovery is unlikely to be either straightforward or fast.

  Region 2019 (US$bn) 2020 forecast (US$bn) % change
North America 78.7 64.4 (18%)
Europe & Russia 43.2 33.4 (23%)
Asia Pacific 24.8 20.6 (17%)
Central & South America 5.1 4.3 (16%)
Middle East 3.6 2.8 (24%)
Africa 2.9 2.6 (11%)
  Total 158.4 128.1 (19%)

Uncertainty in Asia Pacific is going to put further pressure on consulting firms’ already diminished pipelines. Based on conversations we’ve had with many firms we think that the pipeline value for most services is around half of what would have been expected at this time in the year. Combine this with the fact that more existing projects will come to an end in the coming weeks and we estimate that demand for consulting in the second quarter of the year could shrink by 30%, before recovering slightly in Q3 (-27%) and more substantially in Q4 (-16%).

How well consulting firms negotiate this transition from clients’ immediate response to the crisis to a phase in which the latter are trying to create businesses that can survive an indeterminate period of economic upheaval is going to depend on how fast they can adapt.

One of the most consistent findings of our research has been the relative strength of demand for technology consulting. It’s obvious why this should have been the case in the last few weeks, with the rapid shift to online working forcing many organisations to implement new technology at breakneck speed. Going forwards, we can expect to see some aspects of discretionary IT spend go by the board. Typically, half of an organisation’s spend on technology consulting goes on legacy systems, and only the most essential aspects of this are likely to continue. The other half of the expenditure has been going on new digital technologies and transformation. Some of these projects have been, or will be, cancelled, but others are likely to morph into COVID-19 response programmes. Almost any intervention an organisation can make, whether that’s to respond to an urgent challenge or to secure its mid-term operational resilience, is going to rely on technology.

As a result, we think that global demand for technology consulting—which, in our definition, excludes systems development and integration, and hardware and software sales—will contract over the course of this year, but by a considerably smaller margin than the overall market; 10% as opposed to 19%.

Technology consulting will fare better in some sectors than others. There’s evidence that the big pharma companies, under extraordinary pressure to come up with treatments for COVID-19 and a vaccine, are increasingly turning to consulting firms for help. We’ve improved our forecast for this sector overall, from -7% to -4%, and technology is an important driver of this—indeed, we think demand for technology consulting in pharma could grow slightly, by 4%. Our forecast for the TMT sector has also improved for the same reason: We think technology spend will fall here, but only by 4%, compared to an 11% fall in overall spend. But in sectors where conserving cash is the priority, such as airlines and industrial and non-food-related manufacturers, even technology consulting will see a very severe downturn. We also think that spending in the healthcare sector is going to be focused on front-line care and that this will significantly reduce the funding and management capacity for even mid-term planning.

But two of the most important technology markets are in the public sector and financial services. In both, demand for technology consulting is expected to hold up considerably better than consulting as a whole. The vast array of initiatives announced by governments all depend to some degree on technology, meaning that we think that government spending on technology consulting in 2020 will be similar to that in 2019, although the exact nature of how that’s deployed will, of course, be very different. In financial services, caught up in the execution of some of those initiatives as well as grappling with a shortage of staff, regulatory worries, etc., we think demand will shrink by just 1%, against an overall market fall of 12%.

If your firm has a strong track record in delivering technology consulting services in either of these sectors, you may in fact have seen growth over the last month. For many firms, technology may prove to be something of a lifeline in the coming months.

Further questions

We've included details of our model and forecasting methodology below. If you'd like to know more about how we've created our forecasts or want to understand how the year is likely to play out at a more granular level for your firm, please contact


In order to calculate this forecast, we've taken the most recent forecast from our model of the consulting industry, which was prepared pre-crisis, in early January 2020. This unique model is built bottom-up, by estimating the number of people employed by several thousand major and mid-sized firms across 84 countries, 29 industries, and a range of services. We then apply a series of metrics and adjustments around the revenue per consultant. Where possible we validate this data against published sources and interviews with senior people in the firms concerned. Although some of our 10 million individual data points and assumptions may be wrong, when aggregated, they provide a robust view of consulting markets around the world. Moreover, because of the way this model has been built, we can adapt it to take account of new scenarios—as we have done here. In order to understand the likely impact of COVID-19 on the consulting industry, we've developed forecasts at the level of individual service lines, quarter by quarter, then modified these depending on industry and country. Please note that all the data in this bulletin is for the calendar year 2020 and is in US dollars. We've calibrated our assumptions with a number of major and mid-sized firms.


One of the greatest challenges with sizing any part of the consulting industry is that “consulting” means different things to different people. Over the last 12 years, Source has adopted a consistent definition, and this underpins all our published material about the consulting industry. It includes traditional management consulting services (strategy, HR & change, operational improvement, risk & regulatory work, and technology consulting), but does not include systems development and integration, and outsourcing services.


Our model also focuses on what we call "big consulting", work done by consulting firms with more than 50 consultants typically for clients with a turnover in excess of $500m.

About Source Global Research

Source Global Research is the leading provider of research about the professional services market. Founded in 2007, we serve the world's leading professional services firms and their clients with expert analysis, data, and insights. Firms come to us because they know we offer transparency in a notoriously opaque market. We provide direction and evidence about changes in the marketplace, helping firms cut through what can sometimes be intractable discussions around future direction by being objective and honest.

Data sits at the heart of what we do, and our model of the professional services market is the largest and most sophisticated in the world. Data in the model comes from extensive desk research, and interviews with over a thousand senior partners from around the world. It feeds into our customers' business strategies and helps them prepare for the future. We also place a strong emphasis on the views of clients of professional services firms (we conduct some of the largest interviews on this sector in the world) and listen to what clients need, and how their views are changing in the marketplace.

Please note that, because we work with such a wide range of firms, we take confidentiality very seriously. Our ongoing research programme, including interviews, and customised project work with individual firms, gives us an extensive foundation of knowledge and allows us to work on some of the most confidential issues these firms have.

Our independence and knowledge of the professional services industry means that we're trusted to set our work within the wider market context, helping firms make the most of the opportunities on offer. Our customers would tell you that we have a strong commitment to doing the very best for every firm we work with, and are thoughtful, friendly, and easy to work with.

Please help us to help you: We've only been able to pull this forecast together so quickly because of the input of the hundreds of firms from all over the world who responded to our initial survey. Please help us by sending us your updates week by week, by following this survey link. Every single one of these responses helps us improve our forecasting.