Benelux: Making a virtue of necessity

By Fiona Czerniawska

“Pessimists will no doubt despair,” begins our report on consulting in the Benelux region, “not least because while we foresee a slight uptick in 2014, there remains little to suggest that Benelux consulting firms are about to start seeing the levels of growth enjoyed by their neighbours to the west and east.”

There haven’t been many grounds for optimism about this market.  Caught between a malaise engendered by the global financial crisis, international business relocating functions to other parts of the world and a vibrant market for contractors and independent consultants (the subject of another, recent article), the Benelux consulting market has been the black dog of Northern Europe.

2013 saw a 2% increase in consulting in the financial services sector and a 1% increase in financial management and risk (we estimate that the market as a whole was flat), most of which was driven by regulation. But regulatory largesse was unevenly distributed: consulting demand in petite-but-precious Luxembourg grew by 3% overall, but was flat or slightly negative in Belgium and the Netherlands.  And there’s little sign of organisations being able to invest: 84% of clients say that they expect to have to cut operating costs in the next 12 months and fewer than half of those would turn to consultants to help them do that.

But if consulting opportunities aren’t going to fall like manna from heaven, it might still be possible nurture a few spindly shoots.  Technology consulting, which we estimate accounts for around a third of the market (around €700m – but remember we focus on what we call ‘big’ consulting), grew by just shy of 1% in 2013.  Nine out of ten clients say they need to invest in improving their existing (and, over the last five years, much neglected technology) and almost as many say they’d like to leverage new, digital technologies more effectively.

At the same time, both here and elsewhere, clients tell us that what they’re looking when choosing a consulting firm to help with digitisation is changing.  We’re moving from a world in which ‘digital’ has primarily been a front-office activity to one where it’s being used as a means of improving back-office efficiency.  While clients still want consulting firms with deep technical skills, they’re also looking for experience in operational improvement and an understanding of how digitisation can change their business model.

But there’s one more thing they’re looking for which may play to the strengths of firms in the Benelux region: clients expect the consultants they work with to be walking the talk.  To be successful in the digitisation space, consulting firms need to be exploiting the potential of digitisation and changing the way they deliver their services – and this is something that Benelux firms have excelled in.  While Spanish consulting firms are avoiding bankruptcy by working in Latin America and Italian firms by, frankly, blind optimism, Dutch and Belgium firms have had to be more innovative.  If they were now to combine their ideas about business models with knowledge around digital technology, they’d have a distinctive proposition both at home and abroad.