The concept of management as an independent discipline has evolved relatively recently, with the earliest roots traceable to the early 1900s. In the past few decades, there has been massive growth in the field, and the management consulting services market has developed into an independent industry, providing management services to other companies, to streamline their processes.
With the advent of globalization, the management consulting services market has gone global. Management consulting services include strategy consulting, operations consulting, financial services consulting, HR consulting and IT consulting, and are typically customized on the basis of the needs of the specific company and industry.
Growth of the Global Management Consulting Services Market in Recent Years
The current value of the global management consulting services market is estimated to be $260 billion and has been growing at a rate of approximately 4-5 percent over the past few years. Around 75 percent of the revenue for consulting services is garnered from the highly mature markets of North America and Europe, while the APAC has a comparatively lesser market share. Key drivers behind the demand for management consulting services are the need for operational efficiency, regulatory compliance, and technological advancements.
- End User Industry: While virtually every industry can make use of management consulting services, there are certain fields that make up the majority of the demand. Financial services began as one of the first sectors where management consulting services were offered, and even now, financial services account for the largest end-user segment, at approximately 25 percent. Apart from financial services, other significant end-user industries are manufacturing (for 16 percent of the demand), public sector (14 percent demand) and natural resources and power (12 percent).
- Globalization: Companies are no longer bound by geographical boundaries and major companies are now investing in setting up international branches. However, there are many factors that need to be considered when setting up a company branch in a new country. Global management consulting services are qualified and familiar with the business set up of a given country and can help make the transition process smooth. US tax reforms, European Union General Data Protection Regulation (EU GDPR) and Brexit have further increased the demand for management consulting services as multinational companies seek effective advice.
- Technological Advancements: In today’s modern times, technology plays a major role in the functioning of companies, and in order to maximize the benefits of technology, proper management techniques are important. Global management consulting service providers are capable of bridging the gaps between a company’s existing policies and optimum use of technology to gain the most benefits in a competitive market outlook. Specific areas where MNCs seek the advice of global management consulting service providers are artificial intelligence and analytics, which have a major impact on customer service, data analytics, and customer engagement, helping companies gain an edge over the competition.
- Cost Savings: One of the major goals of global management consulting services is to enhance the cost savings of a particular company. Since companies are always trying to reduce costs while increasing efficiency, the potential for cost savings is a major driving factor for companies to take on global management consulting services.
The global management consulting services market has grown rapidly in the past years, especially in the mature markets of North America and Europe. Although the market does face challenges, specifically in the form of freelance consultants and companies hiring in-house consulting groups, the overall market is expected to maintain steady growth in the future, expanding further in emerging markets.