Oil: Just another problem consultants in the GCC may slip on

by Julie Ahadi.

There is an Arabic proverb (Lebanese, in fact) that goes: “He who wants to eat honey should endure the stings”. We suspect that a fair proportion of consultants in the GCC may benefit from reminding themselves of this mantra in the days and months ahead as the impact of low oil prices play themselves out.

Aside from the UAE, which is already witnessing a fallout as a direct result of what’s happening with oil, the rest of the GCC consulting market is uncertain how it will fare in the medium-long term, as habitually oil-reliant economies start to unravel. Keeping too much fatalistic paranoia at bay, however, is the fact that honey has already started to flow for consultants from the very thing they were afraid of (every cloud...). Primarily, this has been in the form of transformation and efficiency projects that clients/governments are wading into, en masse, to try to offset the regions’ reliance on oil. Saudi Arabia, in particular, (which managed double-digit growth in 2015) is hastening an already urgent programme of reform and diversification as clients – particularly in the all-important public and financial services sectors – looked to take cost out of their operations. Indeed, the ‘honey’ on offer translates into a GCC consulting market currently worth more than $2.7 billion.

That is hardly a market you would want to wimp out of. But, underpinning this positive picture, are not only the familiar (and tricky) idiosyncrasies consultants working in the GCC are used to (the cultural divide, relationship-is-king business model and an immature market) but a new set of challenges. Clients are understandably very nervous right now and their tension is being transferred onto consultants. As such, there is a growing focus on value, an insistence that consultants implement (rather than simply recommend) and even greater pressure on prices (and please don’t expect to get paid this side of Ramadan). So, despite some already benefitting from the strategic divergence from oil, consultants are under the magnifying glass and fighting for air like never before.

For those consulting firms brave enough to stick around, or who have far too much work on to even consider hitting the eject button, it would be folly not to be mindful of the region’s uncertain economic future, devoid of big-money oil dollars. Nobody can predict the future, but whether the entire region is sent into a quasi-anaphylactic shock, or pockets of the economy are affected, it is clients who have the most at risk and consultants who will be best placed to provide them with an antidote. So keep at it – but perhaps invest in some protection clothing.