Benelux’s €1.87bn consulting market has remained flat the past year, and a new report says that the market is unlikely to experience levels of growth enjoyed by its neighbours in the west and east in 2014. Netherlands contracted by 0.5% to €1.167bn, Belgium grew by 0.6% to €625m and Luxembourg was up 3% to €77m.
However, the Source Information Services (Source) report found that there are pockets of growth – with some firms reporting relatively good performance in the financial services sector, the biggest in the Benelux consulting market (up 2.1% to €447m). This was largely because regulatory work, and a desire amongst banks to transform themselves.
All other sectors contracted apart from pharma and biotech (up 2.1% to €107m) and healthcare (up 2.3% to €97m). The report adds that a contracting market in the manufacturing and public sectors acted as a counterweight in the market, when any amount of growth in either of these sectors would have probably led to growth overall.
Edward Haigh, a director of Source and an author of the report, said:“From our discussions with leading consulting firms across the region, the overall consensus appears to be that while 2013 was most definitely an improvement on the market contraction of 3.1% in 2012, it left a lot to be desired. For many firms the best that came from it was the opportunity to regroup and prepare for an upturn that must, surely, come at some point soon.”
However, despite the overall market being flat, the report found that some firms performed well. Mario van Vliet, managing partner at Deloitte, said: “Currently we are in the final quarter of our fiscal year and we have grown double digit compared to last year, which is the fourth consecutive year of double digit growth.”
Financial management and risk, benefitting from regulatory drivers, was the service line to perform the best (up 1% to €247m). But, this was only by a narrow margin as growth of 0.9% was reported for technology consulting. In contrast, there was very weak growth in operational consulting, and significant contraction (down 2.9%) in HR and change management.
Nearly a third of clients in the Benelux think that consulting expenditure in financial management & risk will increase, but that proportion is outdone by the 39% who think it will decrease. Nevertheless, Source expects this service to remain one of the better-performing parts of the Benelux consulting market for the foreseeable future.
There is also a good chance that interest in technology consulting will start to pick up throughout 2014, as almost half (47%) of clients think that the amount they spend on consultants will increase.
Jaap Büchli, country head for the Netherlands at PA Consulting Group, said:“Digital is the big trend but so is rationalising legacy IT systems. On top of that there is a lot of analytics and business modelling work – but a big chunk of work is still systems implementation.”
Critical success factors in the Benelux market
The Source report also asked clients in the Benelux region what characteristics of a consulting firm were most important to them. Their answers converged around five characteristics: client focus, sector knowledge, honesty, clear thinking and accountability.
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