I’m somewhat amazed by the lack of sizable new entrants in the procurement and supply chain consulting market in recent years given the overall growth of the sector. I’ve been privately asked to look at market growth and market size for clients in the investment space and the growth picture, for larger firms, appears incredibly healthy, seeing double-digit compound annual growth rate practice growth, which would suggest, under many circumstances, new entrants as well. Yet that’s not happened, at least not at scale.
The Big 5, especially, with KPMG and Deloitte out in front, appear largely limited by the number of skilled advisors they can put on projects more than anything else. (That is, if you don’t count Accenture in this group anymore, a firm that has gravitated more to business process outsourcing and managed services.) Ernst & Young and PricewaterhouseCoopers are also growing at high clips, albeit from what our estimates suggest is a smaller base.
Strategy firms aren’t sitting still either, with BCG and Bain — the former perhaps more than the latter — making material investments in procurement and operations, yet with tiny practice areas compared with perhaps the best sector brand: McKinsey. McKinsey continues to build from a surprisingly large procurement base as well. Back in 2014, McKinsey had roughly 8,000 consultants overall — a third who focused on operations consulting, and a third who focused on procurement, according to our own discussions.
As interesting are those on the periphery of consulting also doing consulting (and some seeing quite significant growth/uptake). Software developer and BPO provider GEP is also a sizable advisor on the consulting front. Deep procurement experts such as Proxima are worthy of mention here, too, even if their core business tends to trend more to managed services. And of course boutiques like Source One, Insight Sourcing Group, Denali, Protiviti, Profit Recovery Partners and others are carving out clever not-so-small practices and niches in the broader market and realizing similar or even greater practice growth than larger firms. Sector specialists like Censeo Consulting (public sector) and Huron Consulting (higher education) of course are worthy of mention as well.
Finally, no discussion of procurement consultants would be complete without mentioning A.T. Kearney as well, but personally, I see its business as more protecting their traditional cash cow — good business if you can get it, of course. To ATK’s credit, though, it has at least ventured into developing technology-based offerings and productized services and frameworks — even if we don’t always agree with them. Examples include the ROSMA benchmark, “chess boards,” and their homage to Eli Goldratt’s book “The Goal” with their own book titled “The CPO.” (Some of the Amazon book reviews are pretty humorous, actually).
Of course, there are dozens of boutique providers worthy of mention as well, on which perhaps we’ll do a more formal sector roundup after we issue a formal RFI to providers in the coming months — the market will see what Kennedy Information comes back with first given its recent research foray into the topic in the meantime.
So, Where is the 2015 Version of Peter Kraljic?
But what concerns me today is not market or provider analysis, but more an observation — namely that procurement consultants are almost all sounding the same these days with little in the way of thought leadership to do anything but generate slightly more thoughtful collateral and ideas to bring to customers that marketing teams can. Consulting firm partners have become skilled salespeople, presenters and, in the best of cases, mentors to younger practice leaders. But where’s the 2015 version of Peter Kraljic, an individual in a firm that stood for truly rethinking the profession and did something about it?
read more: https://spendmatters.com/2015/10/22/the-procurement-consulting-industry-is-desperately-in-need-of-a-21st-century-peter-kraljic/
No comments:
Post a Comment