GCC consulting market closes in on $2bn landmark

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Source Information Services (Source) latest report reveals the combined GCC consulting market grew by 18 percent between 2011 and 2012 and is now worth just short of $1.9bn. This follows strong growth in 2010-2011, and Source expects it to reach $2bn during the next 12 months.

GCC consulting market closes in on $2bn landmark

Major Highlights of the GCC consulting market report

  • The Source Information Services GCC Report is based on surveys and interviews of more than 400 consulting clients and 100 consulting firms across the GCC region
  • Combined GCC consulting market size to reach $2bn during the next 12 months
  • Saudi Arabian consulting market emerged as the largest consulting market in the GCC with $791m
  • Demand for consulting services fro GCC’s public sector companies fueled the greatest in the sector 
  • Clients realising that good ideas without implementation are worthless
  • Strategy consulting firm Bain scored the highest in client satisfaction
  • Among Big Four firms, PwC received consistently positive reviews compared to its peers
  • Nationalisation agendas putting great pressure on consulting firms and clients in finding skilled personnel

According to the report, the Saudi Arabian consulting market grew by 34 percent to USD 791 million, has now emerged as the largest consulting market in the GCC, eclipsing that of the UAE (USD 553 million). Qatar follows as the next most exciting market – growing at 14 percent to USD 232 million. Being awarded the FIFA 2022 World Cup has put wind in the sails of this small country; Julian Hawkins at Deloitte comments: “Qatar will be a huge market for consulting given the confidence in the economy and their bold planned developments.”

The greatest sector growth is coming from the public sector, which grew by over a third (37 percent) between 2011 and 2012. However, Source points out that the GCC sector distinctions are inherently difficult to make because of so much government ownership throughout the region.

Consulting services in greatest demand from GCC companies and public sector organisations are operational improvement work (up 38 percent), technology (up 33 percent) and HR consulting (up 28 percent). The report says that the growth in operational improvement serves as a reminder that even in high-growth markets like the GCC, efficiency remains a high priority for clients.

The biggest challenge faced by consulting clients and consultants is a shortage of skills. Edward Haigh, a director of Source and author of the report commented: “The region just doesn’t have enough people with the right skills to keep pace with its ambitious growth plans. It’s a situation which is exacerbated both by nationalisation agendas which, implicitly or explicitly, demand a greater degree of local people in the workforce, and, for consulting firms at least, the difficulties associated with moving people around the region to match demand with supply.”

The big opportunity for consultants in the GCC
Partly driven by a shortage of skills internally, the greatest opportunity for consultants in the GCC lies in implementation. Clients are becoming increasingly reluctant to buy advice in isolation, insisting that consulting firms turn plans into reality. Luca Rossi, AT Kearney, supports this point in the report by saying: “Clients now realise that good ideas without implementation are worthless.”

Strategy firms continue to rule the roost, but only just
Among strategy firms which continue to dominate the GCC market (17 percent growth to USD 532 million), the Source report says that McKinsey is the firm about which clients are most likely to comment, but they aren’t always positive about the quality of the firm’s work. Booz and BCG are both establishing reputations as strategy firms capable of implementing and other firms, most notably Bain, score much higher than McKinsey, by Source’s measure of client satisfaction.

The report also found that the Big Four firms have performed very well recently with their market size increasing 20 percent to USD 495 million. This is partly because of the network that their audit practice has given them and, more recently, the breadth of services they offer. KPMG is the Big Four firm which clients are most likely to mention, but it does attract criticism more than its competitors. PwC is the least likely to be mentioned, but comments about the firm are more consistently positive than they are for any other Big Four firm.

Big projects are on the up
The GCC consulting market is also benefiting from an increasing number of bigger projects. The report says that there are still a large number of small, tightly-focused projects around, but there are also more large projects and fewer mid-sized projects. All of which points to the idea that it’s the number of big projects which is growing the market.

Peter Christie, Hay Group concludes: “More than 50 percent of our business came from large projects that are 4 times larger than the value of our average-size project only two years ago.”

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