Businesses don’t know everything (even if you don’t want to admit it!). Sometimes you need to call in a consulting expert in a field outside your core competency. To help you understand the dynamics of the consulting industry, IBISWorld research covers the major sub-categories of consulting services to help you make smart decisions.
This graphic shows next year’s average forecast price change for the consulting category as a whole, along with a selection of specific sub - categories of consulting services. Click into each sub - category to see a buying guide that will get you up to speed quickly on the service.
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Energy & Utility Consulting Services
Human Resources Consulting
IT Consulting Services
Management Consulting Services
Procurement Consulting Services
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The consulting category experienced considerable growth in recent years as business activity has picked up. A rising number of businesses paired with growing corporate profit has spurred demand growth for consulting services. As more new businesses are created and existing businesses expand, all types of companies turn to consulting service providers for advice to set them on the best path for success. Growing demand, along with high specialization and a generally low availability of substitutes, has been propelling service prices upward, creating challenges in the purchasing process for buyers.
- Specialization is high across the consulting category
- Vendors customize consulting solutions to each individual buyer based on needs and objectives
Key Takeaway: High specialization hampers buyers’ ability to compare suppliers. The full value of a vendor’s solution cannot be realized until it is put into practice. To ensure quality, buyers should carefully evaluate providers’ experience and references prior to entering a contract.
- Market share concentration is very low across most consulting markets
- The number of providers is consistently rising
- Each consulting market is fragmented among large diversified consultancies, boutique agencies and individual consultants
Key Takeaway: Low market share concentration benefits buyers by boosting competition. While many buyers require the more extensive resources and experience of a large, well-known consultancy, those that do not can save money by leveraging the availability of many smaller boutique agencies and independent consultants in the market.
- Profit levels are high, on average, for suppliers across the consulting category
- High levels of demand and improving vendor efficiency boost margins
- The largest consulting players enjoy name recognition and a reputation for quality service that enable them to consistently garner higher prices and margins
- The majority of vendors are expected to either maintain or grow their margins in the coming years
Key Takeaway: Despite high margins, most large vendors are unwilling to negotiate significantly for small contracts. Instead, buyers should consider purchasing multiple types of consulting, if needed, from a multi-line consulting provider to leverage a larger total contract value.
In the next three years, IBISWorld anticipates that prices for consulting services will continue to rise on the back of business expansion. As in recent years, growth in corporate profit, the number of businesses and the number of employees will drive a greater number of buyers to seek out advice on how to operate as efficiently and effectively as possible. In response to demand growth, provider profit margins are expected to rise or remain stable across most consulting markets in the coming years.
Buyers should seek out contracts sooner than later to take advantage of lower current prices; however, buyers that choose to delay their purchasing decisions will still have some opportunity to negotiate with suppliers in the coming years. Notably, low market share concentration will persist, allowing buyers to pit vendors against one another. Moreover, buyers that require various types of consulting services can bundle offerings from a single supplier to garner more favorable rates and simplify the purchasing process.