05 June 2008
More than half of buyers have not been deterred from hiring management consultants, despite the economic downturn and concerns among consultants themselves of an "uncertain 2008".
According to the latest SM100, 54 per cent of purchasers have not been put off commissioning consultancy over the next six months.
And, according to the Management Consultancies Association (MCA): "Most firms report caution among clients so far as spending on consultancy is concerned, rather than a dramatic fall."
MCA research also found a 10 per cent rise in members' fee income in 2007, a reduction on the rate of growth over the previous two years "reflecting broad economic uncertainty".
It continued: "No one expects 2008 to be a period of high growth for the UK consulting sector as a whole. The question is whether we will see a comparatively short period of lower growth or a more sustained and significant downturn."
Author of the report, Fiona Czerniawska, told SM that lower growth could mean better deals for organisations as management consultants try to ensure they meet annual targets.
"Procurement professionals are becoming more knowledgeable about consultants and are able to pick and choose when to use their services," she added.
According to the SM100, most purchasers thought consultants provide vital support, rather than unnecessary cost.
Mark Barnett, chief operating officer at education and healthcare supplier the Consortium for Purchasing and Distribution, said it is essential to take a long-term strategic approach to sustaining business during a downturn.
"Consultants save time as they can hit the ground running," he said.
Another buyer stressed that if consultants are used properly, they will always be important. "Cutting back because of the changing economic climate seems to suggest that the reasons consultants were being brought in previously were not thought through and a little frivolous," said Gary Moore, strategic procurement manager at Bournemouth Borough Council. "You need someone from outside an organisation to deliver a message that will be listened to and acted upon."
One unnamed buyer said he would even consider hiring more consultants to advise his organisation on where savings could be made.
"A good consultant will be viewed as an additional resource with specific expertise. A poor consultant will be viewed as a cost on the balance sheet," said Mark Frankl, senior procurement manager at hospitality e-procurement firm Amphire.
Of the others surveyed, 24 per cent didn't intend to hire consultants at all, and 22 per cent confirmed they planned to cut back on them.
Adam Smith, commodity manager at manufacturing company Ceramaspeed, said organisations will inevitably look to make savings by reducing consultant numbers.
"Consultants are expensive but in an economic downturn could be worth their weight in gold.
"The reality is that companies batten down the hatches and consultants may fall victim."