Some say that the opportunity for consulting firms is narrowing.
This is why they are wrong.
1) Cyclical Market - The consulting sector is and always will be cyclical, whenever there is a big shock e.g. Financial Crisis 2008, you could forgive people thinking the world would collapse, however, what followed was 15 years of steady growth which compounded. COVID-19 shocked the World, there was much to reset including interest rates, inflation, and new ways of working. This will all normalize and growth will return
2) Technology advances - a large chunk of the consulting sector is driven by new technology, ERP, Cloud, AI, Digital, etc. The industry saw one of the biggest growth from SAP, Oracle, and Workday implementations. Gen AI will be no different, there is little to no expertise available in the corporate world to deploy this effectively, and consulting firms will lead the revolution like they did with ERP.
3) Self-inflicted - Much of the pain in the Big 4 and others can be seen as self-inflicted damage, increasing headcount to keep up with bubble-like demand from the post-pandemic boom. Hiring vast numbers of senior employees, paying +20% above market rate, and driving inflation and damaging margins.
2023 was a tough year all around and most will have acted to rightsize their businesses, H1 2024 will be about consolidation and returning to broader growth in H2 before (assuming no major disasters) we return to growth in 2025.
The key now is investing wisely and ensuring sustainable growth plans are in place to capitalize on the next wave of activity.
#consulting #genai #growth