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Business Consulting Poised for More Growth: IDC

By Sophia Mayengbam

The growth in the information technology sector has paved the way for other sectors to follow suit. One such sector is business consulting, which is an area of increasing focus and innovation for services providers, as well as greater user spending. According to a study conducted by IT research firm, business consulting is an area which has tremendous growth opportunity after IT.

IDC forecasts worldwide business consulting spending to increase at a compound annual growth rate (CAGR) of 3.9 percent from 2005-2010.

IDC’s research attributes this upward forecast primarily to the accelerating convergence of business and IT processes. This increasing link between business and IT is in part causing nearly all general management consultancies (GMCs), advisory firms, and consulting niche players to significantly build up their technology-focused capabilities, intellectual property (IP), and talent.

"The growing convergence of business and IT – in dialogue and in fact – has obscured many of the strict distinctions between the IT and business sides of consulting services," said Bo Di Muccio, program manager for Consulting Services at IDC.

"While the nature of the activities and players in these markets still warrants treating IT and business consulting separately, the primary implication of this convergence is that the business consulting market is more closely tied to IT than ever. IDC believes that the worldwide business consulting market is poised to settle into a phase of growth that will be stronger than we have been predicting for some time."

According to the study, the growth patterns of business consulting sector will differ geographically. Asia Pacific region will show the highest growth rate and that of Americas the slowest, the research firm said. Asia Pacific growth will be about in the middle as in EMEA.

IDC forecasts that over the next five years, Americas will lose business consulting spending share slightly over the next five years to both EMEA and APAC. However, the study finds that throughout the forecast period the Americas will be the locus of well over half of all global business consulting spending, and will be the principal geographic driver of dynamics in this market.

"As business consulting services providers universally scramble to acquire technically focused talent and build technical capabilities and intellectual property, their ability to deliver across business and IT functions is becoming less and less of a potential differentiator," added Di Muccio. "Therefore, business consultants will increasingly be forced to find other ways of differentiating themselves, and one example is through the productization of business consulting offerings."

The study, Worldwide Business Consulting Services 2006-2010 Forecast offers a comprehensive analysis of the global business consulting market and provides a five-year forecast based on analysis of consulting buyers' needs and behavior, market trends and imperatives, the competitive landscape, pricing, and talent management dynamics.


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