Management consulting service is the method of helping businesses boost their functioning by examining current challenges and development strategies for an upgrade. Firms employ business advisory services to acquire external advice or when they require skill and services provided by consultants that include operations, strategy, human resources, internet technology, and business consulting services. 

Financial advising and operations are some of the biggest markets for consulting services, more than twice the strategy and human resources markets. However, all the global management consulting markets are seeing growth year after year.

The worldwide management consulting market is expected to achieve a value of $977.3 billion in 2022, having grown at a CAGR of 8.6% since 2014, and is likely to get bigger at a CAGR of 10.6% to almost $1,460.2 billion by 2025.

Growth in this phase was due to strong economic growth in emerging markets, subcontracting of back-end operations to low-cost nations, regulatory reforms in the financial sector, and public investments. Things that negatively affected growth in this duration were social and political instability and a shortage of skilled workers.

In the coming days, steep economic expansion, the advent of digital consulting, and the advancement of globalization will push growth. Things that could hinder the progress of this market in future include rising costs, decreasing margins, advances in artificial intelligence with a possibility to replace management consultants and in-house management consulting teams in big tech firms.

Management Consulting Market Trends

Some of the major trends that impact the global management consulting market are as follows:

Virtual firms in the industry: Fast evolving technology, heightened burden to reduce costs, and widespread use of mobile devices has pioneered the idea of virtual firms to market players in the consulting sector. It is possible that several consulting firms will go virtual and will have just a few permanent offices. By appointing employees on a contract, laying the entire infrastructure in the cloud, and using a limited number of offices, consulting firms are trying to reduce costs and increase revenues. Many firms are already in the virtual mode and are extending consulting services to clients online.

IT transformation in management services: With the advent of IT, all industries are rapidly moving towards digital. Increasing competition, new regulatory demands, growing opportunities, and investor expectations are putting businesses under pressure to digitize their practice. Consulting companies are providing IT services to businesses, banks, and other companies to overcome challenges like dwindling budgets and soaring stakeholder expectations. Such services consist of acknowledging vital technologies, forming an IT agenda, regulating, balancing, and consolidating IT solutions across sectors in a cost-effective manner. 

The number of individuals working as management consultants in the US has increased annually in the past 5 years and in 2019 there were about 710,000 management consultants in the US. Even with the number of consultants rising, keeping good employees was one of the big challenges for consulting companies. 

To benefit from the opportunities, consulting firms should consider concentrating on technology advisory offerings, emerging markets, launching virtual management consulting firms concentrating on strengthening their product portfolio through partnerships among other approaches.