The consulting industry facing the crisis: what 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 to zero as many have dared to hope. The digital sector, like the rest of the world, was affected by the economic and health crisis of 2020. The market of these companies must today face what has weakened it, and thus try to draw from its failures a new strength for 2021.

A balance sheet with more or less heavy consequences for some, but beautiful and very real consequences that must be considered in order to make 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

Syntec Numérique, a French union and professional organization of digital players, shared the results of its second biannual conference of the year at the beginning of December 2020. Contrary to what one might have thought from the complicated situation of the first half of the year, we can notice a digital sector suffering a less heavy impact than expected.

The drop in turnover, initially anticipated at -6.7%, ultimately amounted to -4.6%, or 2.1 points more than expected. What one might consider a relief is not true for all professions in the sector. Indeed, software publishers saw relatively high growth compared to other professions: an increase of +0.3% in turnover compared to -4.2% for IT Services For example.

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

2. Technology consulting: most affected sector

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

To add insult to injury, ICT is in a distressed situation on the job market with more than 10,000 positions in danger, unlike the rest of the sector. Around 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 given 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 sounding the alarm?

3. A rebound in growth, limited depending on the sector

The curve seems to be able to rise for 2021, a rebound is 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 increasing by +3.8%, IT Services They will see their growth rise to +1.1%, which remains positive if we compare it to ICT which will take longer to recover and will again suffer a decline (-3.3%) at a lower level. cost” than 2020 it seems, based on these figures.

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

“This rebound, however, remains limited and conditional on the economic situation of customers: renegotiations of supplier contracts (and therefore pressure on prices) will constitute the second priority in terms of IT for 60% of customers of digital companies, who have already launched or will launch projects in this direction in 2021. » Syntec Numérique

Outlook for 2021

1. Face difficulties and challenges

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

Usually, firms rush towards young graduates from major schools, but this last spring this craze was quickly cut short. Le Monde took an interest in this issue and tells us in an article that the vast majority of interviews with graduates of grandes écoles are unsuccessful, forcing these future juniors to draw a line under a permanent contract upon leaving school to fall back on an internship while waiting for the job market, impacted by the Covid-19 crisis, to evolve positively.

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

This slowdown in recruitment did not bode well for the coming year, but changing the outlook for 2021 was essential to continue moving forward. Let's take the example of the Middle East which has shown resilience according to this article on Consultancy-me.com: Crisis management is done differently depending on the country, the Middle East took 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 ” (in the Middle East).

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

What made it possible to bounce back turned out to be the organizational change linked to adaptation to digital work. Indeed, the consulting industry around the world has taken up this new challenge: the acceleration of digitalization, which is essential today for managing 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 sector and enable 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 businesses are booming and will increasingly rely on consulting to exploit current favorable conditions. This may strengthen the demand for strategy and operations mandates for consultancies.”

3. Preserve expertise

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

Recruitment increasingly targets candidates who are experts in a particular field, we are talking here about sectoral expertise .

Overcoming the crisis

1. Invest in IT

Godefroy de Bentzmann, president of Syntec Numérique, affirms 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 says a lot 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, Head of TMT at Deloitte in the United States.

2. A wave of optimism on the horizon

The crisis has encouraged, more than in the past, a number of consultants to become independent. Several CEOs of independent management consulting platforms expressed that independent consulting, in particular, will see strong growth in 2021 like consulting firms which 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% from one year to the next ”. In France, Martin Videlaine (NC Partners) expects to see " the increasing functionality of fully digitized platforms" and the disappearance of boundaries between traditional management consultancies 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 this ability to adapt and resilience demonstrated 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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