Alan Leaman: 'The industry is determined to deliver high-value services for its clients'

Chief executive Management Consultancies Association
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In the current economic climate, every industry must demonstrate the value it generates for its customers. None more so than management consulting. We depend on our ability to deliver outstanding results, for private and public sector organisations. Fortunately, the UK consulting industry is one of the best in the world.

That is why the MCA has embarked on an ambitious programme to calculate and communicate the value that Britain's consultancies deliver for their clients and for the economy as a whole. Too many conversations about consulting begin and end with the notion that it is just a cost of doing business; clients as well as consultancies do better when they think of consulting as a cost-effective way of achieving valuable results.

Our research found consultancies generate a significant return on investment. On average, across the range of work carried out by MCA members, benefits to clients are worth around £6 for every £1 spent, with some projects realising benefits of up to 20 times their cost. In 2009, this was equivalent to around £50bn of benefits across the economy, including £3.2bn for central government clients alone. No wonder UK-based consulting companies are increasingly winning business around the world.

The recent recession has been tough. In 2009, consultancy contracted by around 6 per cent – the first drop in fee income since the MCA started collecting industry statistics. And a difficult period for the private sector is now being compounded by uncertainty and retrenchment in the public sector, as the new coalition Government sets about cutting the deficit in the public finances and reforming public services.

MCA member companies have responded to these challenges by adapting and focusing on the needs of their clients. They have achieved significant improvements in their own productivity.

By the end of 2009, the average consultant was 7 per cent more productive for their consulting firm than 12 months earlier. The number of people employed by MCA member firms fell by 15 per cent to 40,000. Yet the number of senior people across the industry rose by 10 per cent, suggesting consulting firms are willing to invest in expertise and experience because, increasingly, that is what clients are demanding.

The industry that is emerging from this recession is more focused, more productive and even more determined to deliver high-value services for its clients.

One way this finds expression is in its commitment to the MCA code of practice. We launched this last year, and require our member companies to submit an annual statement explaining how they comply with its provisions. The code sets out the high standards of professional behaviour and integrity we expect of our member companies. It provides the buyer of consulting with reassurance that MCA members uphold the highest standards of client service, deliver sustainable value and are trustworthy and transparent. We believe this code will be the benchmark against which consultancies and their clients judge the industry's performance.

One other industry initiative to promote excellence is the annual MCA awards. These have been relaunched for 2011, bringing together awards for outstanding projects and individual consultants. Each year the winning case studies demonstrate extraordinary achievements and results, authenticated by the fact that they are jointly written by consultancies and their clients.

It will be particularly important for the public sector to make good use of consultancy over the next few years. Major changes will be needed to bring the spending deficit down and to transform public services so that they live up to what is needed in the decades ahead.

We believe there are major opportunities here for a determined Government to achieve step changes in public sector productivity and the quality of public services. But that will require the contribution of management consultancies – who have the required expertise and relevant experience in abundance.

MCA member companies work with almost all the FTSE 100 companies. The financial services sector, for instance, has drawn on their expertise in recent months to help implement huge programmes of regulatory and other changes. Many companies have depended on consultancies to improve their operations to survive the recession, cutting costs, improving supply chain management or streamlining business processes. Plenty are working with consultancies to ensure they edge ahead of rivals in the competition to build market share or lead innovation in their sector.

Consulting is at the heart of the UK economy and public sector. It is one of the things that our country does outstandingly well.