Brand influences consultancy purchasing at financial firms

20 April 2011

20 April 2011 | Lindsay Clark

Buyers of consultancy in the financial services sector make purchasing decisions based on existing relationships and brand.

A survey of purchasers spending around £650 million on consultancy found that the international reach of the big four firms, Deloitte, KPMG, PwC and Ernst & Young, was not necessarily a factor in using services from them – but brand and existing relationships were. However, it also uncovered a desire to use smaller specialist consultants.

Edward Haigh, author of the report, said: “Ultimately, [buyers] need to establish the right balance for their particular objectives. A generic cost-efficiency drive, on one hand, might lend itself to generic process improvements and proven formulae – pushing the financial institution towards a big four consultancy with global credentials. On the other hand, a targeted innovation project may demand greater differentiation – big ideas and rapid delivery, as provided traditionally by a specialist strategy consultancy.”

Buyers were looking for greater efficiency and simplicity in their procurement of consultancy by consolidating expenditure around the big firms with whom they can contract on a global basis from one central location, the report sponsored by consultants Crossbridge said. However, this needed to be balanced with a need to manage international variations such as industry regulations and cultural differences, which were driving demand for local skills and experience.

The report from Sourceforconsulting.com found that two thirds of buyers increased or maintained spend in this area in the past six months. It also found two thirds were trying to improve operational performance, including cost cutting, when purchasing consultancy services.

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