The global IT consulting market was worth $345 billion in 2010, with the US as the largest market. Manufacturing is the largest consumer of IT consulting services globally and in the US. The top 5 consulting firms make up 27% of the fragmented global market. The consulting industry saw significant growth until the global economic slowdown beginning in 2008 negatively impacted spending. The largest 10 consulting firms gained market share in 2009 as smaller firms lost revenue. Attributes of top performers included scale, scope, skills, and stability to deliver large, global projects amid economic volatility.

1. Global IT Consulting Market Landscape

3. Globally, the manufacturing sector is the largest consumer of these services. This is the case in the US market as well, with manufacturing being followed closely by the banking and financial services vertical

4. Globally, the market is highly fragmented with the top five players accounting for 27% of the market. There are a large number of boutique consulting firms who have expertise in specific technologies/solutions

5. The IT consulting market is highly correlated with economic cycles, as these services are project-based and discretionary. While the market grew rapidly in the 2009s the current global economic slowdown has significantly affected spending on consulting servicesConsulting industry posted significant growth from 2005 through 2007. However, 2008-2009 marked a challenging period, in light of the global economic slowdown and shrinking corporate budgets. Government budgets have been under pressure as well, at the state and local level, where large deficits loom and tax revenues are down. Corporations, large and small, have been slashing spending, employment and capital investment in a sometimes desperate attempt to pay down debt while cutting costs. This has been particularly hard on some consulting sectors, since corporations and governmental agencies are prime clients for consultancies. In general, major consulting companies, including leading firms in management consulting and HR consulting, along with other advisories such as accounting firms, found themselves with substantial drops in business during 2009, in many cases 5% to 10%. Some companies cut their employee rosters and/or restrained hiring.

6. IT Consulting Value Chain IT business/strategy consulting forms the top end of the IT consulting value chain, followed by IS consulting, network consulting and integration, system integration and custom application development & maintenance

7. IT Consulting Market Share The size of the global market for IT consulting services is difficult to pinpoint because many of the functions and services are integrated with the Management consulting market. Kennedy Information estimates that the Global Consulting Market between 2006 and 2010 will average 7.1 percent growth. This reflects the estimated size and growth of the global IT market, which includes consulting related to strategy, operations management, , HR, and business advisory services. Global consulting industry revenues (including HR, IT, strategy, operations management and business advisory services) will be about $345 billion in 2010, according to Plunkett Research estimates. This represents a rebound from about $310 billion in 2009 and $330 billion in 2008. In the U.S., accounting and related services (such as tax preparation), generated an additional $119.7 billion in 2009, down from $128.4 billion in 2008, according to the U.S. Bureau of the Census.

9. Reemergence of growth as a spending driver

10. Continued bundling of IT consulting with outsourcing

11. Rapidly increasing number and range of players

12. Productization of offerings

13. Pervasive talent crunch

14. Stabilization in project size/scope

15. The current economic slowdown has resulted in significant pressure on billing rates across the IT consulting space

16. There is an increased focus on ROI (return on investment). Customers are buying solutions which have a demonstrable payback. As a result, vertically integrated, industry-focused companies are increasing their market dominance

18. Customer satisfaction

19. Integration Challenges

20. Business Transition

21. Cultural conflicts

22. Acquiring right set of talent

23. Volatile Market condition

24. Ever changing technologies

25. Maintaining long term relationship

26. Competition

29. Scope: Advisers operating initiatives for buyers on a global scale have the ability to offer a broad array of consulting services addressing these initiatives broad scope in the advice offered is critically important.

30. Broad skill base: Consultancies need the right mix of skills, such as for multicultural and multidomain change management, while at the same time offering a deep business process understanding for a large number of industries

31. Stability: A solid balance sheet and financial stability of the business and IT consulting service provider are critical because buying organizations must mitigate the risk of falling to complete a project or initiative (i.e. a major transformational 18 month long global finance function project)

33. North America: Top 10 consulting company’s Revenue, Growth, Market Share (US $ Million)

34. Europe: Top 10 consulting company’s Revenue, Growth, Market Share (US $ Million)

35. Asia / Pacific: Top 10 consulting company’s Revenue, Growth, Market Share (US $ Million)

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