Convergence or Anarchy? 2014 Will be a Defining Year for Management Consulting

TBRT ECH N O LO G Y B U SIN ESS RESEARCH , IN C.
TBR’s Management Consulting Benchmark
Research Highlights and Outlook
Convergence or anarchy? 2014 will be a decisive year in management consulting
Technology Business Research (TBR) Quarterly Webinar Series
July 15, 2014

TBR
2 TBR Quarterly Webinar Series | 7.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Management Consulting Benchmark Highlights and Outlook: Webinar Presenters
Boz Hristov
Professional Services Analyst
Email: bozhidar.hristov@tbri.com
Twitter: @boztbr
Jen Hamel
Email: jennifer.hamel@tbri.com
Twitter: @jenhameltbr
Patrick Heffernan
Principal Analyst and IT Services Practice Manager
Email: patrick.heffernan@tbri.com
Twitter: @TBR_PatrickH

TBR
• The Professional Services Practice publishes quarterly and
semiannual reports covering 33 vendors.
• Of those vendors, 16 are included in our Management
Consulting Benchmark.
o TBR reports are unique for their deep holistic analyses
of leading vendor businesses.
o Financial modeling and TBR insights help customers
gain a better understanding of vendor business models.
o TBR reports and webinars are responsive to client
timelines, are clear and concise, and provide insights
into multiple layers of a vendor’s organization and
infrastructure.
o TBR’s strategic assessment provides an impartial check
on a vendor’s progress in its strategic objectives.
Clients gain advantages and a better understanding of revenue opportunities through our reports
and their personal relationships with TBR.
Management Consulting Benchmark Highlights and Outlook: Webinar Overview
TBR’s Management Consulting Benchmark delivers unique insight and
value through in-depth analysis in a concise, consumable format
TBR’s Professional Services
Business Quarterly Management
Consulting Benchmark

TBR
Management Consulting Benchmark Highlights and Outlook: Key Trends
Management Consulting Benchmark July 2014
Leaders: 2013 performance results across various benchmark
metrics
Outlook: Projections for 2014; closer look at APAC and
LATAM trends
Vendor Evolution: PwC’s acquisition of Booz & Company;
Accenture and IBM reorganizations
Disruptive technologies permeating all layers of management consulting
forced vendors to ally, acquire or reorganize to meet client demands
SOURCE: WWW.PERSONALBRANDING.NET
SOURCE: WWW.NEWSYSTEMSTHINKING.COM
SOURCE: WWW.JUSTWEB.COM.AU

TBR
Management Consulting Benchmark Highlights and Outlook: Performance
By acquiring Booz & Company, PwC vaulted into the top tier of strategy
consultancies, closing the gap with McKinsey and Deloitte
Booz & Company also brought PwC additional digital consulting resources, enabling the firm to
launch PwC Digital Services in early 2014
$3,095 $3,487 $3,549
$3,260
$3,499 $3,625
$7,591
20.3%
9.9%
2.7%
5.8%
0%
5%
10%
15%
20%
25%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2011 2012 2013 2014
RevenueGrowthYTY
In$Millions
PWC'S MANAGEMENT CONSULTING REVENUE AND
GROWTH
Revenue (in $ millions) (1H) Revenue (in $ millions) (2H)
TTM Revenue Growth YTY
SOURCE: TBR ESTIMATES
TBR
PwC’s 2013 management consulting revenue is estimated at $7.17 billion, making the firm the
fourth-largest management consulting firm behind Deloitte, KPMG and McKinsey in the
benchmark.

TBR
IBM and Accenture reorganized in seemingly different ways, but both
vendors reacted to clients’ demands for technology and strategy
The two largest solutions-led vendors, Accenture and IBM, performed almost identically in 2013 but
diverged in 2014 by adopting opposite organizational strategies
IBM Strategy and Analytics
• Combined practice delivers end-to-end
analytics services (design-implement-run)
• Includes management consultants and
data scientists (15,000+ dedicated experts)
within GBS
Accenture Strategy and Accenture Digital
• Accenture Strategy: Management and
technology consulting to guide transformation
• Accenture Digital: Implementation and managed
services around cloud, digital marketing, mobility
and analytics
SOURCE: IBM
SOURCE: TBR AND ACCENTURE

TBR
Ongoing efforts to cater offerings to evolving client needs do not
translate to market share gain for solutions-led vendors
We have observed this transition
since TBR’s 2H11 Management
Consulting Benchmark:
Yet, solutions-led vendors’ share of benchmark revenue
continues to shrink, dwarfed by Deloitte
“Solutions-led firms combine
technology expertise and industry
domain knowledge for broad
management consulting capabilities.
Services aligned to industry-specific
needs with standardized offerings and
delivery set these firms apart, while C-
Suite interests forge IT and business
agendas into one opportunity.”
“Investments in industry-specialized
talent and cross-training consultants
enabled segment growth on the
innovation platform in 2011. ROI
metrics from technology-led business
enablement deals within growth
verticals fed operations and technology
revenue gains.”
Deloitte $11,409
16.2%
$22,507 32.0%
$19,148 27.2%
$10,087 14.3%
$7,225 10.3%
Big
Four
Strategy-led Solutions-led HR/
Specialty
SOURCE: TBR ESTIMATES
Inner-most circle represents 2012; middle circle, 2013; outer circle, 2014
15.7%
31.7%
26.8%
15.2%
10.6%
15.2%
31.5%
26.5%
16.1%
10.8%
Solutions-led
vendors as a group
Deloitte

TBR
Among benchmarked management consulting vendors, relative size,
growth and profitability remained fairly constant in 2013
Management Consulting Benchmark Highlights and Outlook: 2013 Results
• Deloitte cleared $10 billion in global management consulting revenues in 2013, up from $7.5 billion in 2010.
• McKinsey’s slow growth dropped it to No. 3, although the firm continues to outpace the field in profitability.
• IBM and Accenture, growth laggards among the large vendors, were essentially stagnant from 2012 to 2013.
Second-half improvements point to a return to solid growth in 2014 for IBM and possibly for Accenture.

TBR
As technologies grow, consultancies will struggle to differentiate, forcing
vendors to seek niche offerings and profitable growth channels
Management Consulting Benchmark Highlights and Outlook: 2013 Results
Nearly every benchmarked vendor expanded technology revenues from 2012 to 2013
• KPMG benefited from inorganic investments.
• McKinsey invested in proprietary, vertical-specific solutions.
• Accenture enhanced its in-demand solutions portfolio offerings and expanded relationship with leading
software vendors.

TBR
Management Consulting Benchmark Highlights and Outlook: Projections
As a result of emerging technologies permeating through management consulting, clients
are upending the traditional consulting flow, looking to analytics and metrics to guide
strategy, rather than starting with a high-level view and approach.
Consulting vendors provide guidance across ever-changing business and
market landscapes — and 2014 is poised to be a highly disruptive year
Concurrently, consultancies rolled out new offerings based on acquisitions and IP,
increasing the scope of, and revenues from, management consulting. Transformation of
service lines, lines of business, IT shops and CxO roles generates opportunities.
The impact of emerging technologies,
broad reorganizations and benchmark-
altering acquisitions will erode any
stability or predictability in the market.
SOURCE: WWW.BEARINGPOINT.COM

TBR
After years of double-digit consulting growth, APAC revenues slowed;
despite the setback, vendors bet that APAC clients may fuel growth
Management Consulting Benchmark Highlights and Outlook: APAC
PwC’s APAC revenues declined in 2013,
dropping slightly after double-digit growth
from 2010 to 2012. IBM’s and Accenture’s
APAC revenues declined in 2013, while
Deloitte’s and McKinsey’s expanded
modestly. For all vendors, China’s
uncertain economy, lack of IT spending
and increased competition slowed
expectations that APAC and emerging
market revenues would offset ongoing
revenue depression in Europe. Despite
ominous signs from Beijing, vendors
continued to invest.
In May, the Chinese
government, in reaction to a
U.S.-China cyber-espionage
spat, ordered all state-owned
firms to sever ties with U.S.-
based consulting companies.
Coming on the heels of a
slowing consulting market in
China, TBR expects the ban — if
enforced — to encourage
consultancies to bolster APAC
investments in Australia and
Japan.

TBR
The 2014 challenge in Latin America will be sustaining revenue growth as
competition increases and macroeconomic pressures loom
Management Consulting Benchmark Highlights and Outlook: LATAM
Macroeconomic trends could dampen 2014 growth,
particularly as Brazil comes down from its World
Cup high. The management consulting vendors
demonstrating the deepest investments — EY and
Accenture stand out — will most likely weather any
macro-level adjustments in stride.
“We have a hold over the major segment in the Americas region, especially in Brazil. We are adapting both
organic and inorganic investment methods, implementing more manpower in the untouched regions and
looking to invest in acquiring firms. Our management considered investment as an opportunity that comes
up with various growth perspectives. So, we are adapting those perspectives and try to convert our deals
into numbers.” — Director, management consulting vendor, based in Brazil
Every vendor in the Management Consulting Benchmark grew revenues in Latin America in 2013

TBR
PSP Research 1H14 Topics 1H14 Report Key Themes
• Syndicated Vendor
Reports:
o McKinsey & Co.
o Deloitte Consulting
o Bain & Co.
o Boston Consulting
Group
o Accenture
o IBM GS
o Capgemini
o PwC
• Management
Consulting
Benchmark
Consulting
opportunities in
LATAM will expand as
vendors’ investments
in local and regional
resources pay off.

Gain detailed and data-driven understanding
of opportunities, engagements, changes and
growth by management consulting vendors
in LATAM. Compare and contrast leading and
lagging vendors in LATAM, with country-
specific examples when appropriate.
Use of acquisitions to
gain expertise in niche
areas and expand local
market presence

Assess how vendors are leveraging
acquisitions to build expertise in niche areas
and/or expand local or subregional market
presence, particularly in emerging markets.
Compare and contrast vendors’ use of
acquisitions versus establishing new offices.
Adjusting for
slowdown in APAC
driven by China’s
economy stumbling
and U.S. consulting
firms coming under fire

Examine how management consulting
vendors readjust APAC-centric strategies in
the face of twin pressures: China’s
macroeconomic slowdown and a Chinese
government crackdown on U.S. consulting
firms.
Consultancies are expanding strategy capabilities around cloud, analytics,
mobility and digital as clients modernize business models
Management Consulting Benchmark Webinar: 2014 Research Outlook

TBR
Questions?

TBR
Management Consulting Benchmark Highlights and Outlook: Contact Information
Boz Hristov
Email: bozhidar.hristov@tbri.com
Twitter: @boztbr
Telephone: 603.758.1882
Jen Hamel
Email: jennifer.hamel@tbri.com
Twitter: @jenhameltbr
Telephone: 603.758.1875
Patrick Heffernan
Principal Analyst and IT Services Practice Manager
Email: patrick.heffernan@tbri.com
Twitter: @TBR_PatrickH
Telephone: 603.758.1834
James McIlroy
Vice President of Sales
Email: mcilroy@tbri.com
Telephone: 603.929.1166
Twitter: @TBRinc
SlideShare: www.slideshare.net/TBR_Market_Insight
YouTube: www.youtube.com/user/TBRIChannel
LinkedIn: www.linkedin.com/company/technology-business-research

TBR
PSP Syndicated Research Coverage
IT Services Vendors Public Sector Vendors Benchmarks
(Benchmark XLS data also available)
• Accenture
• Atos
• Capgemini
• CGI*
• Cisco Services
• Cognizant
• CSC
• Dell Services
• Fujitsu
• HCL Technologies
• HP Services
• IBM Global Services
• Infosys
• T-Systems
• Tata Consultancy Services
• Unisys
• Wipro IT Services
• Xerox Services
• Booz Allen Hamilton*
• CACI International*
• General Dynamics IS&T*
• L-3 Communications*
• Leidos*
• Lockheed Martin IS&GS*
• ManTech*
• Northrop Grumman IS&TS*
• Raytheon Intelligence, Information &
Services*
• SAIC*
• Global Delivery Market Landscape
• Healthcare IT Services Vendor
Benchmark
• IT Services Vendor Benchmark
• Management Consulting Benchmark
• Public Sector IT Services Vendor
Benchmark
• Software Alliance Benchmark
Healthcare IT Services Vendors
• Accenture HITS*
• CSC HITS*
• Dell HITS*
• HP HITS*
• IBM HITS*
Management Consulting Vendors
• Bain & Company*
• Booz & Company*
• Boston Consulting Group*
• Deloitte Consulting*
• McKinsey & Co.*
TBR Professional Services Practice Syndicated Coverage
*Semiannual publication

TBRT ECH N O LO G Y B U SIN ESS RESEARCH , IN C.
About TBR
Technology Business Research, Inc. is a leading independent technology
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analyses of hardware, software, professional services, telecom and
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Convergence or Anarchy? 2014 Will be a Defining Year for Management Consulting

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