The U.S. market for consulting services grew by 9% to over $50
billion last year, with the Big Four accounting firms being the
principal beneficiaries, a new report has found.
Big Four firms posted growth of 12.8% to $17.5 billion, largely as a
result of their acquisition strategies, according to the report from
Source Information Services. In the U.S. market alone, more than a
quarter of consulting acquisitions in the last 27 months involved
accounting firms.
“The big firms have been doing a lot of buying the last few years,
especially the Big 4,” Source senior editor B.J. Richards told Compliance Week.
“That leads to growth in size, but the Big 4 also are well positioned
in many ways to take advantage of a sudden jolt in interest in financial
management and risk, particularly cyber risk.”
Overall, the growth in demand for risk, financial, and technical
consulting services is being driven by an improved economy, growth in
digitization and cyber security concerns, Source said.
Financial management and risk grew by 11.8% to $16.2 billion in 2014,
while technology was up 8.9% to $12.7 billion. More than three-quarters
of U.S. clients (76%) said their spend on technology will increase over
the next 18 months.
“The dollar is strong, unemployment is down, oil prices are low,”
Richards explained. “There’s been more to boost confidence than upset
things. As companies are making that recovery, now they are returning to
confidence and there’s a lot of pent-up demand.”
According to the report, risk-reward contracts, where consulting fees
are aligned to project outcomes, are striking a chord with
value-conscious U.S. clients. As one senior accounting firm consultant
told Source, “We think that 40 percent of volume in the U.S. in 2020
will be some form of outcome-based fees.”
“To relieve price pressure, we do more value-based billing,” added
Ken Hutt, a principal at Deloitte. “It’s probably easier for us to offer
that as a big firm. We’re able to make the economics better for the
client until they are able to see the impact.
read more: http://ww2.cfo.com/accounting/2015/06/big-four-lead-9-growth-consulting-market/
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