Consulting News from http://www.zambeasy.com/top-consultant/UK/news/newsletter.htm
Consulting firm Mercer appears to be weathering the storm in the global management consultancy sector quite nicely, according to the latest quarterly announcement by parent company Marsh & McLennan this week.
Mercerís Q2 revenues rose 16% compared with the year ago period, to $690m. In no small part this growth was due to the recent acquisition of Oliver, Wyman & Company. However, even excluding the effect of acquisitions, Mercerís revenues grew 2% on a constant currency basis. At a time when the major consulting brands have reported Q2 consulting revenues down as a result of the war in Iraq, Mercerís continued growth is welcome news indeed.
EDS yesterday reported its latest quarterly results, most notable for a plunge in profits, stagnant revenues and a weak order book. Shares were actually up on the news, reflecting analystsí concerns that the results might have been worse still.
Revenue picture shows mixed fortunes
EDSís quarterly revenues rose 2% to $5.52bn on the previous yearís quarter (though down 3% on a constant currency basis). Overall, modest improvements in IT and business process outsourcing revenues were offset by a continuing decline in GM revenues and the impact of a number of under-performing contracts.
Most worrying going forwards – at a time when consulting and outsourcing competitors have been reporting improving order books – EDS reported it has signed only $3.4bn in contracts in Q2, vs $6.2bn a year ago. EDS blamed the poor order book on a “tepid IT spending environment” but the reality is it has been losing ground to IBM and HP, who are aggressively targeting the market at a time that EDS has been focused on a strategic review and restructuring exercise.
The picture is no prettier when consulting is taken in isolation. Solutions Consulting revenues at EDS decreased 13%, at constant currency, from the year-ago quarter to $1.31bn. In top-end consulting, EDSís consulting business A.T. Kearney saw revenues decrease 27% (constant currency) compared with a year ago to $212m.
New competitor on UK Consulting Market
A major new competitor is set to enter the UK consulting market this year, bringing together seasoned professionals from the likes of McKinsey, Accenture and WPP.
The new consultancy – called The Ingram Partnership – will advise on branding & communications strategy and looks set to compete both with traditional management consultancies and advertising agencies. The Ingram Partnership is the brainchild of Chris Ingram, former owner of the Tempus advertising agency – sold to Martin Sorrell’s WPP Group back in 2001.
Mr Ingram is understood to be injecting £10m of initial financing, part of which is being used to acquire two companies as building blocks for the new consultancy: Unity, a communications strategy agency, and The Gathering, a brand-building agency. Through these acquisitions The Ingram Partnership will inherit an impressive client list including Bosch, B&Q, Cadbury Schweppes, the Carphone Warehouse, Guardian Media Group and Lucas Film. Further acquisitions to broaden the partnership’s service line are not being ruled out.
Founding partners of the new business include Ditlev Schwanenslugel (ex-McKinsey), and Alastair Rhymer (ex-WPP). Richard Eyre, former chief executive of ITV and Terry Neill, former chairman of the worldwide board of Accenture will also join the advisory board. Consultancies and ad agencies alike will be closely watching the inroads that The Ingram Partnership is able to make into their markets.