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2 5 2013
»The 2013 Executive Outlook

Things surely look better than they have in awhile, and there’s plenty to be optimistic about, but then again…

There’s simply no denying that the outlook for the year ahead is filled with signs of optimism. Then again, there’s simply no denying that there’s plenty of reason for caution and concern: mainly, we’ve been here before. Probably even more than once. Over the last several years, we’ve felt like we’ve turned the corner a few times, only to see another corner up ahead.

Who Took the Outlook Survey?So, will 2013 be any different? There’s reason to think that it will. Coming off perhaps an overly optimistic Executive Outlook of the last year—with 91 percent expecting revenue growth and 54 percent saying that growth would be in double digits—we have what appear to be more conservative and realistic expectations of 2013.

For the 2013 Executive Outlook survey, we again asked firm leaders about their businesses, including revenue, profits, opportunities and challenges ahead. Consulting surveyed 251 Managing Directors, Partners and Vice Presidents in October and November of 2012.

Bar GraphsFirst, let’s compare last year’s projections with this year’s reality. For the year that just ended, 75 percent of executives said they actually experienced growth, not quite the 91 that predicted it. And 39 percent said that growth was more than 10 percent. Again, that number falls short of the 54 percent who predicted it last year.

As for forecasting 2013, the numbers are positive, for sure, but not the over-the-moon variety we saw this time last year. According to our survey, 80 percent of executives are predicting revenue growth for 2013 and 48 percent say that revenue growth will be in excess of 10 percent.

So, top-line growth is significant, but does the rebound make it all the way to bottom line? Some 65 percent of firm leaders reported improvements to their net profits in 2012. In 2013, 81 percent of firm leaders anticipate net profits will improve, while only 4 percent say net profits will be down. The other 15 percent reported anticipating no change in net profits.

As part of the survey, we also asked participants to rate how concerned they are about certain internal and external issues. There we saw some dramatic shifts year on year. For instance, pricing pressures and sales cycles were the biggest external issues this time around. Last year, business development and project size topped the list. Internally, the biggest concerns in 2013 are managing utilization rates, retention and staff morale. Last year, setting new strategic goals and resetting compensation expectations were top concerns. So, we’re seeing significant shifts in what’s keeping firm leaders up at night.

Meanwhile, when we interviewed firm leaders about the next 12 months and asked them to give us a pulse check on the profession, every one responded with optimism… and a good bit of caution thrown in. And who can blame them? There’s still an awful lot of uncertainly in the market.

But still, all in all, firm leaders are feeling pretty good about new prospects in the new year. Of course, some much needed economic stability (we hope) and a some additional revenue can have that effect. We begin the Outlook with an exclusive feature story with Bob Patton, Americas Vice Chair of Advisory Services for Ernst & Young. Patton sat down with Consulting in December 2012 to discuss the historic journey the firm has been on the last five years since re-establishing Advisory as a stand-alone business.

We also spoke to 14 other leaders from the top-notch firms across a wide spectrum of the consulting industry. The leaders we spoke with are predicting solid revenues in 2013 near or at double-digit growth. They are confident. They are bullish on the overall economy and the opportunities it presents for clients and consulting firms.

This special is our effort to bring some clarity and closure to a tumultuous year, while also setting the stage for what’s ahead this year. While we all long for a sense of calm and economic normalcy in 2013, that still doesn’t appear to be in the cards at this point. However, firm leaders seem more prepared for the unknown, and as a result, are better equipped to handle what lies ahead in the new year.


Cesare Mainardi• Booz & Company

This was a wait-and-see year as clients across the globe took stock of an uncertain environment. You had a presidential election in the United States, which affected the health care and financial markets in particular. There was the seemingly chronic Eurozone debt crisis, lingering geopolitical unrest in the Middle East, and open speculation about the future growth rate of China. Spending on certain types of consulting projects froze up, while we saw rapid take-up in other practice areas. It was a year of contradictions.

‘Unsettled’ is the New Normal
We’re seeing some pick-up in the wake of the U.S. Presidential election and in other markets as the future outlook becomes clearer, but the global economy is far from out of the woods. No sooner do we have resolution on the administration in Washington and deficit deiscussions loom. So this unsettled, anxious atmosphere may well be our new normal. And companies will need to take a fresh look at their markets and make some bold decisions on who they want to be.

Who You Are Defines Your Future
I believe we’re at a threshold juncture. For years, strategy was all about where to go and where to grow.  You looked outward to the market to ferret out pockets of unsatiated demand, and then you scaled up to capture that unmet need. And your accumulated assets and investment acted as a barrier to entry. I would argue that in most mature markets, the benefits of scale have largely dried up thanks to technology and globalization… and the myriad avenues of progress they have opened up. Now it’s no longer where to go and where to grow… but who you are that defines your future path to growth. You have to look within rather than externally to discover what you do better than anyone else and how to leverage that to capture value on a sustained basis. That’s a counter-intuitive perspective to many, but once you break through the resistance, you unleash a tremendous amount of creative and highly motivating energy.

‘Differentiated’ Platforms
We’ve been seeing a lot of activity in the past few months in areas where we have focused intensively on bringing something differentiated to market: We call them our differentiation platforms. One is our ‘Fit for Growth’ platform, which is a set of services, tools, analytic capabilities, and foresight we’ve developed around cost and operating model transformation. This is not traditional cost-cutting; rather it’s re-allocating resources and investment to those few capabilities that define your company and set it apart. That’s how you reposition your organization for growth in the midst of uncertain or even unpleasant economic times. Another is Digitization. We just enhanced our own capabilities significantly in this area with the addition of a boutique that specializes in end-to-end digital solutions, Axon Advisory partners. This offering will be part of our broader Digitization platform of strategy, design and execution services and makes us the premier global consulting firm in this space.  Everybody is scrambling to define an offering in this arena, and we’ve established a great head start.

‘The Developed World is Fatigued’
Markets around the world will continue to be highly challenging. The developed world is fatigued—five years of battling waves of economic and financial crises will do that to you. And emerging, fast-growing markets present a different set of challenges—they have young, middle class consumers who bring dramatically higher expectations to the table. It’s not enough to be the first or the biggest anymore.  You have to be the best at what you do.  And that’s why we continue to believe that capabilities are the key to success, no matter the sector or geography.


Kerrie Holley• IBM Global Business Services

The pace at which organizations are applying social tools and capabilities in the near term, creating valued customer experience, driving workforce effectiveness and accelerating innovation has been a surprise in 2012. The marriage between marketing and IT, the CMO and CIO is a pleasant surprise where marketing uses technology for insights and improved performance.

Demand For Innovation Grows
The world we live in today is only five to seven years long. What I mean by that is more people live in cities, the world is more instrumented and getting more integrated. Mobile, social, big data analytics, and the cloud are different today than it was a short while ago. As our clients continue to witness these changes, the demand for innovation continues growing. A recent study of ours shows leading companies are integrating social into their strategies to drive competitiveness, innovate and create new opportunities. However, a large number of organizations are not prepared to realize these opportunities. It is no longer about what we know, but rather, what we do with what we know.

Our outlook continues to be positive moving into 2013. At IBM, we are focused on helping businesses to transform their operations to drive more personalized interactions and connections with customers. This new business transformation is one that spans all aspects of what we do whether it be analytics, research, services, cloud or mobile, IBM allows businesses to transform their practice to meet both their business goals and those of their clients, all while creating integrated value for their brand. When before we had certain industries growing at faster speeds than others, or more willing to adopt new technologies, this no longer exists. This digital world we live in affects every single industry, but it’s those who capitalize on technological capabilities that will become the leaders.

‘The New Era of Computing’
Our biggest opportunities lie in this new frontier that we refer to as the “New Era of Computing.” It’s an era of moving from programmable systems to cognitive systems. We are at the beginning stages of this new era fueled by present and emerging architectures and technologies. Our CEO, Ginni Rometty discussed a new era of computing, a new client and the evolving IBMer to serve that client. Starting with front office transformation where marketing and technology create new value for CMOs, extreme collaboration using the discipline of business process management to smarter commerce providing real time and micro marketing. Creating this new value for our clients, making sense out of holistically using technology to make cities and businesses smarter where people emerge as a new natural indispensable resource, this is our opportunity.

A Revolution
Like every business, our biggest challenge is simply what lies ahead. What we see now—new systems for customers; revolutionized supply chains and marketing; digital citizens—is just the beginning of a vast, transformative revolution in computing.  We’re in the early stages of the opportunity to create value not just for the CMO but also for the entire c-suite. And indeed, as businesses become transformed at their root by technology, as technology becomes not just support for the business but the business itself, we may see whole new categories of decision-makers in that suite. What we can do is use areas like business process management, mobility, smarter commerce, analytics, and so on in new and innovative ways.”  The search for talent will be paramount: problem solvers, mathematicians, researchers, scientists, engineers and consultants working seamlessly to create new value and make our world smarter and better.


Dana McIlwain• PwC
PwC, and in particular our Advisory practice, continues to build on our momentum from the past few years and we are seeing strong results on a number of critically important fronts, despite what remains a challenging economy. We continue to experience strong levels of profitable growth and remain on pace for another strong year across Consulting, Deals and Forensics, outpacing the growth of the US Consulting market.

Feedback, Feedback, Feedback
We continue to receive strong feedback from our clients regarding the quality of our people and work as well as the depth and breadth of our industry and functional expertise. We measure these results through various formal survey processes and we continue to see very strong results relative to our competitors with respect to current and prospective clients. In addition, we continue to receive external validation of our market leadership position from the Analyst Community. In Fiscal year 2012, we received 23 rankings that confirmed or elevated our position as a market leader across a variety of functional and industry areas. Finally, we continue to experience record levels of hiring at the campus and experienced levels as we continue to invest in our practice. More importantly, we continue to experience record retention levels and employee engagement scores.

The Year Ahead
We believe the U.S. consulting market, which is estimated to be $80+ billion and growing— represents a significant market opportunity for firms like PwC who can help our clients address their most complex and interesting business issues from strategy to execution on a global basis. Our outlook for 2013 remains positive despite some of the well-documented macro-economic factors (U.S. Fiscal Cliff, Eurozone Debt Crisis).

We firmly believe that our guiding principles position us to not only withstand turbulent times, but grow and take market share. We see opportunities across Consulting, Deals and Forensics as well as all of our major industry groups (Financial Services, Health Industries, Public Sector and Products & Services Industries) focused on traditional client issues (Technology-Enabled, Business Transformation; Acquisitions & Divestitures; Supply Chain; Risk & Regulatory) as well as emerging client issues (Customer Experience; Cyber-Security; Analytics; Social & Mobile Strategies).

Emerging Markets, Competitive Markets
In the year ahead, our Advisory practice remains focused on a number of key opportunities to contribute to that mission, including: 1) Emerging Markets: We remain focused on driving growth and greater scale in emerging markets such as Brazil, China, India, Japan and Africa. 2) Brand: We remain focused on extending the reach and relevance of our brand to include even more clients and economic buyers. 3) Competitive Market: We remained focused on leveraging our platform and resources to deliver outstanding quality to our clients and winning market share from our competitors.

The Economy, War For Talent
Almost all companies across the U.S. and the globe continue to plan for scenarios that may result from the current negative macro-economic environment, which creates both challenges and opportunities for all firms in our profession. We believe PwC remains well positioned to address this challenge in 2013 and beyond. The other significant challenge that remains for all firms in our profession is the ongoing war for talent. Our clients don’t buy services; they buy much more than knowledge; they buy access to our people. Thus, it remains critically important that we continue to attract, develop and retain the top, diverse talent in our profession. While we have seen strong results in recent years, we remain as committed as ever to this goal and investing in the development and growth of our people.


John Tobin• Slalom Consulting

Our firm is in a really strong and positive place as we wrap up 2012. It was another tremendous year for Slalom Consulting, as we grew more than 30 percent year-over-year, and opened and expanded critical office locations that solidified our Northeast strategy. Our New York office is going strong in its second year, we expanded our footprint into Boston, and had an amazingly successful foray into the Hartford market.

Across these three critical markets, it’s been rewarding to see this regional momentum build, while we continue to grow at the national level, as well. There’s an interesting dynamic in play right now. While we’re hearing from clients that budgets are essentially status quo year-over-year, clients seem to be in a holding pattern as to when they will release the funds in 2013 and for what projects and initiatives. No doubt that uncertainties around the national economy are playing a role in this hesitation, and it may be February before we know where some of our clients’ priorities are going to be.

30 Percent Growth in 2013
Slalom will continue to serve clients locally with strong support from our national networks.  Our focus will be on key industry verticals, including Financial Services, Insurance, Retail, and Healthcare and horizontal solutions, including Cloud, Mobility, Portals, Business Intelligence, Data and Analytics, E-Commerce, and Organizational Effectiveness. In 2013, we will continue to develop offerings that are driven by and for our priority vertical industries. We continue to see strong demand for products from our alliance partners, especially in custom development on Microsoft Azure, Salesforce.com, and Amazon Web Services. Geographically, we’re energized by our scheduled expansions into Minneapolis and Houston. We expect to realize consistent growth in the high-potential markets of New York, Boston, San Francisco and Chicago. In total, we expect to have another year of 30 percent growth in 2013. 

The Cloud & Big Data
Particularly in the last half of 2012, we saw businesses moving their mainstream applications to the cloud, and we expect that to be a great opportunity in 2013 for which we’re primed to support. We see this trend as both a reflection of increased confidence in the security of cloud solutions, and that businesses are increasingly persuaded by the strength of the cloud’s infrastructure and on-demand capabilities, among other benefits. Another major opportunity in 2013 will be helping businesses to understand and use big data as a competitive advantage. It’s a major opportunity across all key verticals to help businesses understand trends and make strategic decisions based upon the massive amounts of internal and external data flowing through and residing within their businesses.

Cultural Challenges
As Slalom continues to grow, believing in and living our culture and our core values will continue to be a differentiation for us. These intangibles are the foundation for our growth and are a huge motivation for people to join and stay at Slalom. Doing the right things for clients; having a very open, collaborative and fun culture; no unwanted travel and knowledge that individuals are delivering value in their local markets are all powerful reasons people find a career at Slalom extremely rewarding.

We’ve set a very high bar for our talent and thoughtful hiring will continue to be a challenge we embrace in the year ahead. We hired 700 people in 2012 and plan to hire 900 in 2013 to support our growth objectives. Quality recruiting at those volumes in a relatively flat job market means that we need to remain focused on the criteria that comprise a top Slalom team member. And, while assertively growing, we must maintain a balance between our hiring efforts and retention and investment in our current team.


Oliver Marchal• Bain & company

Bain & Company moves into 2013 well-positioned for success after a very strong year in 2012 marked by strong double-digit growth. In spite of continued macroeconomic uncertainty, we have continued to invest in people, priority regions, practice areas, and intellectual property. There were no major elements of surprise, except maybe the continued strong momentum of our activity for private equity funds, in what remained a fairly depressed deal market environment. Additionally, the level of growth in our three regions (Americas, Asia-Pacific, and EMEA) was above what we had expected for the year.

Caution Signs Ahead
We certainly see clear signs of an increased level of caution at our clients in a number of geographies where the economic outlook for 2013 remains uncertain. For example, this is the case in most of the Eurozone, where clients can sometimes take longer to make decisions on consulting projects, postpone start dates, and show increased price sensitivity. But even in these markets, we don’t see the dramatic pull-back or the consulting freezes that we saw in the 2009 recession. We’re seeing what we expected to see: a shift in the nature of our clients’ demand for more performance-oriented projects.

If we take a longer-term perspective, we remain extremely bullish about the growth potential for strategy consulting. Corporate earnings, which are an important driver of demand in our sector, have been much more volatile, but stand at high levels. And balance sheets are robust after a period of significant deleveraging. More importantly, clients will continue to demand innovative solutions in a world of accelerated global changes.

The Geo Perspective
The global economy will continue to be challenged, and levels of uncertainty will remain high.  In the U.S., there will be a pullback of government spending. The Eurozone is likely to remain in a no growth, or even recessionary environment, and it will take time before structural reforms initiated start to have an impact. China will continue on its path of economic transformation from export-led growth to one where domestic consumption is a more significant driver. In this context, we expect our growth to remain sustained in just about all industry sectors, even though there will be less traction from emerging geographies than in 2012. Obviously, a real double dip in Europe would have a global impact.

Opportunities in New Markets
Our biggest opportunities in 2013 will likely be coming from some of the recent investments we have made in our geographical footprint, industry practice areas, and innovative client solutions. We expect significant growth as we continue to expand into new markets to support growing demand for our services, such as Poland, Turkey, Indonesia and the Washington, D.C. region. We’ve also invested in developing new industry practice areas at Bain, such as the Global Oil & Gas Practice, which should continue experiencing strong growth, as we develop our teams and ability to serve clients globally. Finally, over the past few years, we have continued to increase our levels of investment in IP to develop innovative solutions that will help our clients navigate complex challenges.

Turbulence and Uncertainty Remain
Continued turbulence and uncertainty in the global economy will remain to be the main source of challenges for our clients in all regions. Our main challenge, as it is every year, will be to continue to surpass ourselves in delivering to our clients the enduring results and change capability that they need. We are confident that the strength of our results culture, and the quality, and passion of our teams will allow us to achieve this once again in 2013.


Dan Reardon• North Highland

North Highland has had a strong 2012 with 10 percent growth but there were some bumps along the way. The second and third quarter in the U.S. had a lot of project delays from our clients which resulted in less overall growth than we had hoped for. Our experience and ability to adjust to our clients’ demands means that we were able to adjust quickly and maintain our profit levels. We’re extremely excited by our growth in the UK as well as our new offices in Boston and Chicago.

New divisions have shown outstanding growth in 2012 and are positioned to hit it big in 2013. We’re definitely seeing an increase in client demand in the last few months of the year. Our strategic clients are ready to invest in implementing their strategies and making the most of this slow economy. Our clients continue to look to us for more holistic and innovative approaches that can be transferred to other areas within their organization.

Tremendous Opportunity in 2013
North Highland sees tremendous opportunity in the coming year. Based on the conversations we are having with our clients and projects already confirmed, we are planning on another high growth year for 2013, in the range of 15 percent to 20 percent. The main areas that will be leading the way for us are Financial Services, Healthcare, Retail, Media, Entertainment & Communications and Energy & Utilities. All of these industries are dynamic and are experiencing rapid change, and clients in these industries are turning to us to help them with their toughest business challenges.

Our BI and Marketing Services divisions are growing at rates in excess of 50 percent and these will really be a major growth driver in 2013. These include: Enfathom, our business intelligence and analytics divisions, addresses the challenges of deriving rapid value from big data and coupled with North Highland’s consulting expertise, we’re able to provide considerable return on investment for our clients. Sparks Grove, our full-services marketing division, is a unique offering for a consulting firm and we’re seeing considerable demand.

‘The North Highland Way’
With our growth, come new challenges. North Highland is known throughout the industry for our unique corporate culture, and we want to make sure this culture is ingrained in all of our new offices and divisions, no matter where they are in the world. We know that the values upon which we were founded—that we are building a different company where doing the right thing for our clients, our employees and our company—will lead to success. The biggest challenge is onboarding high numbers of new employees and training them on the North Highland Way.


TJ Campbell• Capco

We believe Capco is in a really advantageous position. Our focus on the financial services industries, which continue to be in tremendous flux, has driven our continued growth from the fourth quarter of 2011 through 2012. We have had an increase in major transformational engagements, clients, many of which grew from trust we built on smaller projects in previous years. We have also gained new top-tier clients as our solutions set has grown, and we continue to build our roster.

Regulatory Environment
One sign of increased demand is the fact that clients are continuing to come to Capco to build solutions in response to the new regulatory environment. Many of our clients are taking the opportunity to go beyond just “checking the box” to actually better their business through these initiatives and there is no sign that these engagements are slowing.

Growth Areas
As we head into 2013, we expect to see continued growth for Capco. We plan to continue making investments in our own infrastructure and personnel to serve clients. The practice areas we see leading the way in 2013 are wealth and investment management, capital markets and technology. The types of engagements we are seeing more of include: sourcing, architecture and target operating models. The market is looking for innovative solutions, and Capco continues to bring the top people together to develop these solutions for our clients. One major opportunity for Capco is greater engagements with current clients to cross-sell additional services. We are getting to know our clients on a deeper level. Our 360-degree view of our clients enables us to develop solutions quickly to help clients adapt as market conditions change.

The War For Talent is Back
One of the challenges we see is the war for talent, not only hiring—but maintaining and sustaining the level of talent. We plan to continue recruiting the best professionals, as well as work to maintain our high level of satisfaction among employees, by ensuring that they work on interesting projects. It’s a good challenge, but it’s a challenge all the same.


Lynne Doughtie• KPMG

With uncertainty dominating the corporate landscape in 2012, businesses were forced to balance an aggressive need to compete with a measured appetite for long-term investment. This dynamic drove KPMG’s Advisory performance over the last year, which resulted in record results for our business. Our deep-rooted commitment to innovation contributed to our growth, as we made investments in data and analytics, shared services and outsourcing advisory, Cloud enablement, human capital management and customer advisory offerings.

Transform and Thrive
These efforts, along with our continued focus on helping our clients manage and optimize risk and navigate complexities around new public policies and regulatory reform, have positioned our teams well to help organizations transform and thrive in the current environment. In addition, despite declines in merger and acquisition activity in 2012, we continued to see growth in our transaction related services.

With companies maintaining strong balance sheets and anticipation of greater political clarity in the months ahead, we are optimistic about future M&A activity. We also remain committed to growing and acquiring highly skilled talent in key industry sectors, as demand for industry-tailored solutions increased in 2012 and we fully expect that to remain in 2013 and beyond.

Strong Growth Trajectory
Based on our current pipeline, which is at an all time high, and the feedback we’re receiving from clients, we feel very good that we will continue our strong growth trajectory in 2013, which in recent years has been in the double digits for our U.S. Advisory practice. This confidence comes from the great traction we’re seeing in many areas.

Whether it’s our transactions specialists providing deal related advice, our forensic and regulatory teams counseling and executing complex investigations or our multi-disciplinary teams helping to transform the front and back office, enabled with emerging technologies, we are very comfortable that our services are well aligned with the dynamics driving today’s marketplace. We are confident our growth will continue to outpace the broader consulting market in 2013.


Tom Reichert• The Boston Consulting Group

This was another strong year for BCG. Despite all the challenges in the global economy, we were able to help many of our clients improve their growth trajectory. We also invested heavily in our people, industry knowledge and functional capabilities. If there was one theme for us in 2012, it was to invest in strengthening our capabilities and growing our team. We’re seeing continued growth in all of our regions and in virtually all of our practices.

Interestingly, in some of the most economically uncertain parts of the world, we’ve had some of our very best years ever. Clients that are facing enormous challenges and change view BCG as a firm that can navigate through very uncharted waters and then take insights and turn them into real competitive advantage.

‘Growth of 8 to 12 Percent’
We expect growth in the range of 8 to 12 percent next year. But in truth, our ability to predict both the highs and the lows is very limited. You put a great team in place, you make sure everybody is focused on their clients, and good things happen. As a private company, we don’t obsess over fluctuations from year to year. We invest in our team, in our capabilities, and in our clients with a long-term orientation. Our biggest opportunities are very clear: Despite all the growth in BCG, there are an enormous number of companies that we don’t serve and a large number of clients that we serve with only some of our capabilities. So our first responsibility is to take the clients that we serve and make sure we’re bringing them the best of BCG.

The Full Power of BCG
We need to understand what their issues are and make sure we mobilize for them the full power of BCG. Then, having done that, we need to invest and build relationships with other companies that may know us a bit or may have had some experience with BCG in the past. Doing those two things well will provide the fuel for years and years of growth. The macro environment is hard for many of our clients. Their resources are more constrained and they’re putting high hurdles on any investment. The challenge for us is to make sure that we’re operating as great partners and are clearly communicating the value that we can deliver. Our need to be sharp and clear on the value we bring is higher in an environment like this.


James Roth• Huron Consulting Group

We are pleased with the strength of Huron’s businesses entering 2013. We see strong demand in our two largest segments—Health and Education Consulting and Legal Consulting—as these markets continue to be impacted by economic and business pressures. In our Health and Education Consulting segment, hospital and university clients are facing similar challenges to reduce costs while enhancing quality. In our Legal Consulting segment, corporate law departments and law firms are under increased pressure to contain costs. Given the proliferation in electronic data, this industry will continue to face challenges managing the discovery process.

Positioned for Success
We are well positioned to provide our clients with services that deliver value, and we anticipate that demand will continue to remain strong in those businesses during 2013 and beyond. At this stage, we expect that the same factors impacting our clients in 2012 will continue in 2013, and we are expecting reasonably similar growth patterns across our business segments. 

Healthcare
In Healthcare, which is our largest business, we expect that there will continue to be uncertainties for hospitals and health systems that must adapt to the requirements of the Affordable Care Act. In addition, there will continue to be reimbursement pressures, and the need to align physicians to accommodate the transition away from fee-for-service toward value-based pricing. There is no question that a bulk of the challenge—and for us, a bulk of the work—is focused on the operational aspects associated with implementing strategies related to these issues. 

Education
In our Education business, universities are facing a confluence of rapidly emerging technological disruption and public pressure to reduce costs and improve efficiency. However, universities often find it more difficult to create institution-wide change. Our core services are well suited to this kind of environment, and we expect the favorable conditions in this practice to continue for the foreseeable future.

Legal
Our Legal Consulting segment, which represents about 25 percent of our business, is well positioned to help corporate legal counsel and law firm clients deal with the technological and economic pressures in e-discovery and matter management. We are optimistic about market acceptance of Huron Legal’s new Integrated Analytics offering that is designed to reduce cost and enhance accuracy within the discovery process. The addition of capabilities from the AdamsGrayson acquisition in 2012 also strengthens this business.

People, People, People
As always, one of the ongoing challenges of the consulting business is finding and retaining great people. We believe that Huron’s culture, collaborative workplace environment, competitive salaries, and excellent benefits continue to set us apart from others.

‘Collaboration and Client Service’
Our people and our clients are always our first priority. The leadership team and everyone at Huron share a focus on teamwork, collaboration, and delivering excellent client service. When you live those priorities every day, they define your company’s culture. As we look to 2013, we are very excited about the opportunities before us based on the strength of our market position in each of our businesses. We are well positioned to help our clients address the strategic and operational uncertainties impacting their organizations.


Gary Sturisky• McGladrey

Moving into 2013, we’re enthusiastic about where our consulting practice is headed. Consulting is growing at a double-digit clip. We’re strategically agile and are expanding capabilities in all three of our service lines—technology consulting, risk and financial advisory—and across industries. We continue to add quality professionals at all levels. And, we are focused on becoming the leading provider of consulting services to middle market businesses. Over the last 24 months, we’ve established a strong operating framework that has strengthened our ability to serve clients. The new framework is serving us well and we expect that to continue in the future.

Next-Generation Technologies
It has been somewhat surprising that, despite a myriad of challenging macro-economic data and uncertainty regarding the regulatory landscape, clients have been extremely bullish about the future. Many are investing heavily in discretionary consulting initiatives that can help them improve their competitive position and effectiveness. They’re implementing next-generation technologies like cloud and mobility computing, business intelligence and advanced analytics to drive performance. McGladrey’s professionals have the experience needed to help our clients implement these technologies effectively and efficiently.

Most Successful Year in History
We’re more than halfway through our fiscal year. If, as anticipated, we continue on our current course, this will be the most successful year in the history of McGladrey consulting. We’ve definitely seen an increase in client demand for our advice and counsel during the past 12 months across all industries. As a firm, McGladrey is committed to being the first-choice advisor to middle market leaders and guiding them through their business challenges. Our strong client focus is resonating with current and potential clients. We’re anticipating continued double-digit growth in calendar 2013. Many companies recognize the need to invest in new and innovative ways of doing business to drive growth, while simultaneously enhancing efficiency to reduce costs. McGladrey is building a solid reputation as a consulting leader, and we expect this growth trajectory to continue. During 2013, we will be highly focused on providing relevant solutions to dominate the middle market space.

Regulatory Environment
The evolving and increasingly complex regulatory landscape will continue to challenge companies in a variety of industries—particularly those in financial services and health care—and McGladrey has solution sets that can help. Practice areas such as merger integration, business effectiveness, information technology system implementations, mobility, security and privacy, regulatory compliance, transaction advisory services, data analytics, fraud investigations and business valuations will continue to be significant growth areas.

A Reunified McGladrey
We see tremendous opportunity in continuing to expand our consulting capabilities and geographic footprint. We will keep investing in the right talent so we can consistently and seamlessly deliver the integrated, industry-focused services our clients need. Along with ramping up our mobility efforts to become even more relevant to clients, perhaps our biggest opportunity arose in December of last year, when we came together under one roof as a reunified McGladrey. Now we’re truly able to bring integrated solutions to guide our clients through their business challenges, and there is tremendous value in that. Our greatest opportunity is to leverage the firm’s capabilities to drive this
new, exciting future. 


Mike Pongon• Point B

Point B clients began the year with a focus on growth, and we saw that translate into increased demand across all our practices in the first half of the year. With increased concerns regarding the U.S. presidential election, fiscal cliff, global economic health and social unrest, our clients were more conservative in the second half. 2012 almost felt like two separate years. In addition to the demand changes we saw on the client side, we also saw increased competition and tight labor markets for adding talented consultants in the first half followed by significant progress in hiring during the second half of the year.

Record Revenues
Overall, we saw another year of record revenues and had the opportunity to serve many new exciting clients. This is difficult to answer without looking at it sector by sector. We don’t see a uniform pattern across all industries and practice areas, but rather concentrations of strategic opportunities and complex problems that our clients are facing. Demand increases as we pair the right expertise and practical wisdom to help those clients navigate and execute on their most strategic initiatives.  

Double-Digit Growth
We are excited about 2013 and expect to see double-digit revenue and earnings growth. We’ve spent the past 18 months looking at marketplace opportunities, client needs and internal capabilities to align with what’s most needed by our clients. It’s allowed us to bring our best expertise to every client engagement. We will continue to lead the marketplace in Strategic Execution and Project Leadership across a very diverse set of industries. We will also grow our services portfolio in areas like Process Optimization and Business Technology within the Healthcare, Retail/CP and High Tech sectors.

Our strategic execution services and our core competence in project leadership continues to be the biggest opportunity we have in 2013. As we deliver industry and service domain expertise around that project leadership competency, we are realizing new and more impactful ways to help clients transform their businesses and drive better performance. The strength of our local model coupled with the ability to tap into some of the best experts in the industry across our firm’s 500 people puts us in a great position to drive value for our clients. 

Market Volatility and Finding Talent
We see challenges coming from marketplace volatility and continued pressure on finding great talent. Despite some calm provided by the settling of some major macro-economic indicators, we see a continued trend of conservatism in many sectors. 


Jim Moffatt• Deloitte Consulting

2012 was another very strong year. We overcame a slower and more uncertain global economy than expected, and were still able to grow across all our service lines and industry sectors. Our clients continued to call on us to help them address the complex economic, political, and regulatory challenges they were facing. Increasingly, we are finding that the issues most impacting our clients are specific to their sector and positioning relative to their peers. Because of this, in 2012 we found that our investments in growing our talent, building strength in our service lines and sectors, and deepening our client relationships enabled us to provide the help our clients needed.

Drivers Fueling Demand
There are several significant drivers fueling demand for services:  increased regulation, globalization, growth in the emerging markets, disruptive changes caused by technology, to name a few. These are being somewhat offset by continued economic and political uncertainty, both in the U.S. and globally. In fact, what makes predicting demand hardest is the ongoing uncertainty. While some companies are hesitant to spend, they also need assistance navigating a very complex global and more heavily regulated environment. When you add in the disruption caused by the growing pace of change in technology and a need to expand into the emerging markets, you find demand for services. However, a number of companies have delayed major transformation efforts required for long-term competitiveness. So, I would say client demand is still strong but uneven.

Opportunities Abound

At Deloitte, we continue to be optimistic. Our scale, diversity and positioning have allowed us to thrive amid this kind of uncertainty. While we do not disclose growth targets, we expect to continue to perform above the market in 2013. We see many opportunities in 2013. We expect both Financial Services and Healthcare to be areas of growth. We also see opportunities helping companies with emerging technologies, innovation, restructuring and M&A. Embedding analytics in more of our activities is another growth area. We’re already starting to see how it helps us improve our approaches to client challenges. In 2012, we made several significant acquisitions—in HR transformation and in designing and developing mobile apps to name two. We expect to grow in those areas this year as well.

‘Uncertainty Creates Imbalance’

It’s easy to look at some of the big sources of instability and uncertainty in the global marketplace—the U.S. fiscal imbalances, the European economy, for example—and see them only as challenges. And since we have a significant Federal practice, we know all too well that a major fiscal shift would have impacts on the country, whether in health, education, military, or housing. But taking a longer view, I remain very bullish and see many opportunities. Yes, there is uncertainty but that also creates complexity, which in turn, generates opportunities. We are very well positioned to support our clients in this environment and to drive impact.


Rakesh Kishan• UMS Advisory

UMS Advisory is a niche, specialized firm, and what surprised us this year is the continued strength in demand for services that continued even in the typically quiet holiday seasons. The other thing we noted was the level of global coordination on transformational initiatives, projects are more global today than before. There’s also a higher level of C-Suite interest in projects, corporate funding pools for services. Clients are increasingly seeking specialized expertise, thought leadership, along with implementation capability.

Outlook, Opportunities
As far as the overall outlook, we see a positive and strong outlook, efficiency solutions are leading the way for us, along with organizational transformations. The biggest opportunities for the firm in 2013 will be our ability to coordinate global solutions for a higher-level bottom line impact through institutionalized changes. Meanwhile, the biggest challenge for us will be the recruiting of talent to support our growth.
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