The consulting industry in the face of the crisis: what are the prospects for 2021?

• 2020 review: The impact of the crisis in a few figures
• Outlook for 2021
• Overcoming the crisis

As a new year begins, the counters are not reset as many have dared to hope. The digital sector, like the rest of the world, has been affected by the economic and health crisis of 2020. The market for these companies must now face up to what has weakened it, and thus try to draw new strength from its failures for 2021.

A more or less heavy toll in consequences for some, but beautiful and very real consequences that must be considered in order to get off to a firm start again in January.

2020 review: The impact of the crisis in a few figures

1. The digital sector, less impacted than expected

At the beginning of December 2020, Syntec Numérique, a French trade union and professional organisation of digital players, shared the results of its second biannual conference of the year. Contrary to what one might have thought in view of the complicated situation in the first half of the year, we can see a digital sector suffering less impact than expected.

The drop in revenue, initially anticipated at -6.7%, finally amounted to -4.6%, 2.1 points more than expected. What could be considered a relief is not true for all professions in the sector. Indeed, software publishers saw relatively high growth compared to other businesses: an increase of +0.3% in revenue compared to -4.2% for software publishers. IT Services Like what.

According to Syntec Conseil, over the year as a whole, there seems to have been a decline in activity of -11% and a decrease in staff of -2%.

2. Technology consulting: the most affected sector

As far as consulting firms are concerned, the figures of Syntec Numérique and Syntec Conseil are not exactly in unison, but both agree on a significant decline in activity: -5% and -11% respectively. Technology consulting is feeling the pinch, it is the one that was most affected by the crisis with a significant drop of -12.3%.

To rub salt in the wound, ICTs are in a distressed situation on the job market with more than 10,000 jobs at risk, unlike the rest of the sector. About 2 out of 3 companies claim to have increased their workforce in 2020 according to Syntec Numérique.

What does this mean for the coming year knowing that in 2019, technology consulting grew by +5%? Consider this popular expression: "One step forward, two steps back"; if this becomes the new trend for ICT, should we start issuing a whistleblowing call?

3. A rebound in growth, limited by sector

The curve seems to be able to rise again for 2021, a rebound is to be expected for growth but will remain limited. If we continue with our analogy: "Let's just put one foot in front of the other". Software publishers will continue their momentum and bounce back with growth that will increase by +3.8%, IT Services they will see their growth rise to +1.1%, which is still positive if we compare it to ICTs which will take longer to recover and will suffer another decline (-3.3%) at a lower "cost" than 2020 it seems, according to these figures.

Syntec Numérique predicts an increase of +1% for the digital sector as a whole.

"However, this rebound remains limited and conditional on the economic situation of customers: renegotiations of supplier contracts (and therefore pressure on prices) will be the second priority in terms of IT for 60% of digital company customers, who have already launched or will launch projects in this direction in 2021." Syntec Digital

Outlook for 2021

1. Dealing with difficulties and challenges

In addition to the decline in activity and a drop in revenue, one of the many ways the consulting industry has been affected in recent months is reflected in the recruitment process that has changed dramatically.

Usually, firms rush to buy young graduates from prestigious schools, but last spring this craze was quickly shortened. Le Monde has taken an interest in this issue and tells us in an article that the vast majority of interviews with graduates of prestigious schools are unsuccessful, forcing these future juniors to draw a line under a permanent contract at the end of school to fall back on an internship while waiting for the job market, impacted by the Covid-19 crisis, to is evolving positively.

This recruitment phase has been unusually reduced at the Big Four as well as at other consulting or auditing firms, such as Kéa in Île-de-France, which has hired 40% less; This led to strong competition.

This slowdown in recruitment did not bode well for the coming year, but the fact remains that a change of focus for 2021 was essential to continue to move forward. Let's take the example of the Middle East, which has shown resilience according to this article on Consultancy-me.com: The management of the crisis is done differently depending on the country, the Middle East has taken a big step forward before the end of 2020 by planning to recruit new consultants in the coming months despite the threatening prospect that the consulting market could "lose up to a fifth of its value – or 600 million euros". dollars" (in the Middle East).

According to a survey by Bayt and YouGov, 58% of respondents in the Middle East planned to hire consultants in December 2020, and 81% plan to do so in 2021. They are therefore at the top of the list "in terms of hiring intention". The other countries have also gradually regained the upper hand.

What has made it possible to bounce back is the change in organization linked to the adaptation to digital work. Indeed, the consulting industry all over the world has taken up this new challenge: the acceleration of digitalization, which is essential today to manage internal activities and digital projects.

2. New trends and digital transformation

The crisis has led to new emerging trends, technology and digital have a major place in the consulting industry and allow for broader coordination with teams around the world. It also facilitates the process of understanding customer needs through the use of virtual platforms.

According to this blog post : "Technology-related companies are booming and will increasingly rely on consulting to exploit the current favorable conditions. This can increase the demand for strategy and operations mandates for consulting firms."

3. Preserve expertise

Digital acceleration – or Consulting 4.0 – and the new approach to remote working havechanged the game. 2021 is a very demanding year for consultants in terms of more specialized skills and knowledge. The demand for companies to receive more personalized, in-depth solutions tailored to their business since the beginning of the crisis has strongly encouraged the consulting industry to favor broader contribution commitments and long-term strategies. This is in order to highlight the role of experts who will be able to stand out thanks to their different skills in various sectors.

Recruitment is increasingly targeting candidates who are experts in a particular field, we are talking about sector expertise here.

Overcoming the crisis

1. Invest in IT

Godefroy de Bentzmann, president of Syntec Numérique, says that "the digital market is holding up better than the average sector in France, because it is stimulated by the digital transformation of organizations." This speaks volumes about the importance of investing in technology to overcome the crisis and ensure business continuity through the improvement of virtual platforms and the digitalization of processes.

"The pandemic will continue to shape business strategies in 2021, and consumers will expect faster, more reliable, and more secure user experiences. TMT companies that can meet these customer needs, while rebuilding their industries for growth, will likely become leaders next year and beyond. Kevin Westcott, Deloitte's U.S. TMT Leader.

2. A wave of optimism on the horizon

The crisis has encouraged more than in the past, many consultants to become self-employed. Several CEOs of independent management consulting platforms have expressed that independent consulting, in particular, will see strong growth in 2021 in line with consulting firms that are already on the right track.

In the United States, Rob Biederman (Catalant) says he has seen "the average size of (their) projects increase by 30% year-on-year". In France, Martin Videlaine (NC Partners) predicts to see "the increasing functionality of fully digitized platforms" and the disappearance of the boundaries between traditional management consulting firms and platforms, which would lead to further mergers and strong growth.

The consulting sector as a whole is planning restructuring work with their companies and an acceleration of their activity, in particular thanks to the considerable expertise of independent consultants, the optimization of virtual platforms and of course thanks to the ability to adapt and resilience shown by consulting companies in all fields, Around the world.

Read this article on how IT Services are facing the crisis in 2021.

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