A strong economy, a renewed client focus on growth, and a healthy appetite for digital projects contributed towards Australia’s consulting market growing by 5.2 per cent to a value of US$4.6billion in 2016. This rate of growth was faster than in 2015 and more than twice the speed of growth in 2014.

These findings are published today in a new report from the leading research and strategy firm for the global management consulting industry, Source Global Research. The Source report says that 2016 was the year that digital finally became a serious business for Australian consultants with much of the work focused on the customer, helping drive strong interest in data and analytics. There is also a growing urgency around AI and robotics, partly to help mitigate high labour costs.

Using the biggest and most sophisticated model of the global consulting industry, Source found that technology consulting experienced the strongest growth in Australia, with strategy and risk work also in high demand, largely thanks to the importance of digital and transformation work.

Cybersecurity was another area of strong interest, driving demand across numerous service lines. The report says that the increase in cybersecurity work has been so intense in the past year that consulting firms reported having maxed out pipelines in this space.

Justin Greig, Partner-Australia at EY said:

“Cybersecurity is growing like wildfire. Whether it’s security of information or privacy obligations, companies are concerned here and looking to act. Anyone trading internationally is particularly aware of the need to address compliance in countries where regulation is tight.”

Edward Haigh, Director at Source Global Research added:

“The broad consensus among consultants is that Australian companies are ahead of the global average in terms of their adoption of digital; behind the US, some parts of Northern Europe, and the mature Asian markets, but ahead of everywhere else. The impact of digital has also extended into consulting firms, with firms automating jobs internally and changing their approach to client issues.”

Luca Martini, Managing Director, Accenture Strategy—Australia Accenture & New Zealand added:

“Everyone, from competitors to clients, is talking and thinking about automation. In the last 24 months, we’ve automated 17,000 roles at Accenture, but without anyone actually losing their job. Instead, we reskilled our people to take on higher-value roles in analytics and other next-horizon skills, creating entirely new job categories.”

Healthcare, public sector and financial services are the stand-out sectors

Healthcare was the fastest growing consulting market sector in Australia, on the back of technology-enabled efficiency work. Financial services, the largest consulting market in Australia by some margin, was also one of the fastest growing, thanks to both regulatory work and growing demand for support around digital take up.

The report says that the public sector was another stand-out area thanks to work focused on delivering Malcolm Turnbull’s reform agenda, with digital an important driver across both government and the education sector. For instance, Australian universities are keen to use digital to improve their channels to market, in order to capitalise on high levels of interest from abroad and to differentiate themselves through the development and implementation of an interactive student experience.

Michael Dobrijevich, Managing Principal, Mozaic Management Consulting, added:

“There’s a lot of discussion within universities about the student experience, which is leading to customer experience companies moving into the sector. If you replace customers with students, you find the same rules tend to apply. Mind you, like sex between students, there’s a lot more talk than action right now.”

The Source report also reveals that digitisation of government services, both to streamline processes and cut costs as well as interface more effectively with citizens, was another factor driving demand for consulting work. The establishment of the Digital Transformation Agency in 2015 has started to lead to new initiatives being kicked off, and local governments also continued to focus on online citizen experience, which is creating substantial opportunities.

Zoë Stumpf, Head Analyst at Source Global Research concluded:

“2017 is proving to be another year of healthy market growth, as clients continue to grow the top line using digital and transformation initiatives to accomplish their goals in the most efficient way possible. Hopes are high for 2018, too, and we expect to see continued good levels of growth looking forward.”

For more information on Source reports contact alice.noyelle@sourceglobalresearch.com or telephone +44 (0)20 3795 2668/ visit www.sourceglobalresearch.com.
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