Interviews
- »Consulting One on One with Romil Bahl
In the January/February edition of Consulting, we examined how American Express is formalizing a consulting business around the data mining and analytics it is performing based on its unique access to aggregated consumer credit card usage information. In a similar vain, PRGX (formerly PRGX-Schultz) is looking to expand its consulting offerings by data mining the aggregated data it has collected on the business-to-business transactions in the retail and healthcare markets as part of its profit recovery audit business. To learn more, Consulting’s One on One sat down with PRGX CEO Romil Bahl. Bahl joined the firm a year ago. He previously co- founded Infosys and was recognized by Consulting as one of the Top 25 consultants in 2007.
- »One on One with OMNI's Frank Bernhard
The merger and acquisition market is way down from its peak a few years ago, but there are still significant consulting opportunities for well-positioned firms. To better understand the upside to the down M&A market, Consulting’s One-on-One sat down with Frank Bernhard, OMNI Consulting Group’s managing principal for its telecommunications, media and technology practice. His 20 year-old M&A firm grew by 7.8 percent in 2009, far outpacing the sluggish market.
- »Out of Office: Roz Savage
After 11 years as an IT consultant, Roz Savage knew she wanted to take her life in a new direction. But little did she realize she’d be charting a new course in a kayak.
- »Ingenix CEO Says He’s Bullish On Healthcare Opportunities
In November, John Nackel was named CEO and executive vice president of Ingenix Consulting, a 1,000-person firm providing services focused on hospitals, health plans, physicians, employers, government agencies and pharmaceutical companies. Consulting sat down with him to discuss the healthcare marketplace.
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2010
»DataWatch: Recovery Optimism Buoyed By Improved Performance Metrics
Unlike 2009 when firms were lucky to keep their revenue flat, the vast majority (83 percent) of consultants anticipate growing their revenue in 2010. Their optimism is fueled, in part, by a gradual increase in demand. And there seems to be at least two underlying metrics that may give merit to the renewed confidence, according to a recent survey by Consulting.
An increasing share of consultants anticipates improvements in fees and sales cycles in 2010. If consultants are indeed able to sell projects faster, and charge more per hour for that work, top line growth may be possible. But even if it’s not enough to overcome cuts to capacity (following layoffs in 2009 and an expected surge in voluntary attrition across many consultancies in 2010), progress in fees and sales cycles certainly bodes well for healthier bottom lines.
 As of the third quarter of 2009, the vast majority (61 percent) of consultants expect they will be able to raise their average realized rates somewhat in 2010, up from just over one-third (34 percent) of consultants who shared that optimism just three months earlier. There are also far fewer pessimists. Just five percent of consultants anticipate further reductions in their average hourly fees in 2010, down from 20 percent of consultants who shared that sour forecast when the same question was posed in the second quarter.
To be clear, few consultants are anticipating a significant uptick in their hourly rates in 2010. Client sophistication isn’t going away, which means clients will continue to know where, how, and to what extent they can continue to push back on fees. And while the economy is slowly improving, clients will continue to contain their costs as much as possible.
What this optimism may suggest is that the supply/demand pendulum may finally be reaching equilibrium. With the supply of consultants down over 2009 levels, and demand rising—albeit slowly, consultants may be able to push back on fee pressure a little.
Even if rates merely remain flat over 2009 levels, it would be a positive sign for the consulting market. In 2009, many firms sacrificed their rates in order to secure work, increase utilization among remaining consultants, lure new clients and protect client relationships. Having to worry less about those pressures in 2010 would be very welcomed news.
 Sales Cycles Also Poised For Improvements
How fast one can sell a consulting project is an important indication of the health of the market. The more deliberate clients are in purchasing engagements, the more likely projects are to be postponed or not bought at all. And the longer it takes to pursue each sale, the higher the cost per sale.
Clearly, the pains of longer sales cycles were a lesson learned in the last two years. The good news is that as of the third quarter of 2009, only 51 percent anticipate longer sales cycles in 2010, down from 85 percent last year. For half of the profession, a third consecutive year of longer sales cycles will still cause pain to bottom lines. However, these numbers are trending in the right direction.
—Jess Scheer
Who Was Surveyed? The data analyzed is based on two separate online surveys conducted in the second and third quarters of 2009. Combined, the two surveys collected data from nearly 8,500 consultants from more than 200 consulting firms. The vast majority of respondents work for firms that generate more than $100 million in annual consulting revenue.
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