Which consulting firm has the biggest share of digital transformation work?

By Fiona Czerniawska.

Estimating the size of the digital transformation market isn’t easy. What do we mean by digital and how is this different to other, more established types of information technology? When is something labelled transformation actually transformational in practice?

We’ve spent a lot of time over the last few years tracking the size and growth of one part of the market: the work done by consulting firms. That’s not the whole picture, of course—it doesn’t take into account the amount of money clients spend on hardware and software, and it excludes systems development and implementation. Nevertheless, it’s a big number. In 2017, when the global consulting industry grew at around 7%, we estimate that demand for digital transformation consulting almost doubled in size. Like an alluring but rapacious monster, it’s been eating into the amount of money clients are willing to spend on other areas. Want to sell a client some process improvement work? An expert in classic, corporate strategy? You’ve probably found yourself sitting across the table from a stony-faced client, who’s asking how deep your understanding is of the impact digital technology could have on the issue being discussed.

Back in 2010, the canny people at Deloitte had an inkling that digital technology and transformation might turn out to be big business and launched Deloitte Digital. The head-start that gave the firm translated into an immediate advantage in the market. Clients, uncertain about the depth and breadth of firms’ capabilities could at least see that this was an area Deloitte was investing in. They also liked the fact that it felt and looked different: Fewer suits, more cool kids—which was surely what the future was about. Other firms have, over time, followed suit, some with hutzpah, others shyly and apologetically, but Deloitte’s early success kept them ahead and gave them the largest market share.

Until recently.

In the last year, we’ve seen Accenture take the top slot, with 9.9% compared to Deloitte’s 8.9%. More important than the actual numbers is what this change tells us about shifting client sentiment. Digital transformation consulting work has primarily been a balance of strategy and technology, in clients’ minds. Should they be focusing on trying to answer difficult questions about what business they’re in? Or are they looking, perhaps more pragmatically, to exploit the opportunities that arise from adopting very specific new technologies in their organisation? You could argue, therefore, that Accenture’s ascendance suggests that technology, not strategy, is now driving the transformation agenda. But we think it points to something rather deeper. The senior executives we speak to are increasingly frustrated by the lack of measurable results being delivered by transformation programmes, and there’s a real and growing danger that growth in this market will stall because of this. Our suspicion is that technology firms are gaining ground because they’re seen by clients as delivering something concrete, in contrast to much of the other work being done around digital transformation. We all know—and we’ve certainly written about on this blog—the dangers of putting too much faith in technology, but when that’s the only thing you have to go on…

“We’re starting to wonder what our consultants are actually doing,” was how one senior client put it to us recently. And our data suggests that they be starting to vote with their feet.