CQ Directory Insights – African Consulting Market #4: The Industries

Welcome to the fourth issue of our New Blog Series -the “CQ Directory Insights”. In this series, you will learn “everything-you-need-to-know” about the African Consulting market through a set of fun infographics. In the previous issue, we discussed that the Top Three Capabilities in the African consulting market are Strategy, Human Capital and Operations. The total number of capabilities covered on average is 2.5 and almost a quarter of the consulting firms is specialized in only one capability.

In this issue, we will take a look at the top Consulting industries the region and how they compare to those on a global scale.

The Industries

According to Consulting Quest’s research and data from the Global Directory, the Top Three Industries of the African Consulting market are 1) Financial Services; 2) Health & Life Sciences and 3) Energy & Environment. Interestingly, the consulting offering does not reflect the local needs, which are primarily rooted in Agriculture, Natural Resources and  Financial Services.

In addition, over 14% of the consulting firms in Africa are specialized in one industry, yet the total industries covered on average is 6.3. This finding is congruent with our previous observation that large global Consulting Firms are over-represented in the region compared to the rest of the world. 

This post concludes our series on the African consulting market. In the next series, we will shift our focus to the Consulting market in Asia-Pacific and explore the unique consulting offering there. Stay tuned!

About Consulting Quest Global Directory

Consulting Quest Global Directory is the World’s Largest Professionally-Managed Directory in the Consulting Industry. Searchable by consultancy name or by region, capability or industry, it lists and describes more than 6000 consultancies worldwide, with links to their websites and social media channels. With such a powerful database, we decided to dig deeper into the directory and analyzed the consulting offering in each of the following regions of the world: North America, Europe, Middle East and Africa, Asia-Pacifics and LATAM.

Interested in Seeing More? Subscribe to the Series!

CQ Directory Insights – African Consulting Market #3: The Capabilities

Welcome to the third issue of our New Blog Series -the “CQ Directory Insights”. In this series, you will learn “everything-you-need-to-know” about the African Consulting market through a set of fun infographics. In the previous issue, we discussed that Large Consulting Firms (with 1000+ employees) make up one-third of the consulting firms in Africa. Despite the strong presence of foreign companies in the region, 57% of the consulting firms are in fact only based in Africa, and almost half of the companies have less than 50 employees.

In this issue, we will take a look at the top capabilities of the Consulting Firms in the region and how the figure compares to that on a global scale.

The Capabilities 

According to Consulting Quest’s research and data from the Global Directory, the Top Three Capabilities in the African consulting market are Strategy, Human Capital and Operations. Technology, being the most common capability among large companies (with 1000+ Employees), is the #4 biggest capability in the region, while it is only ranked #6 globally.

The total number of capabilities covered on average is 2.5. Interestingly, however, almost a quarter of the consulting firms in Africa is specialized in only one capability. Niche, local and small consulting firms are on the rise.

In the next issue we will dive into the Industries of the consulting offering and explain how the overall consulting offering is not reflecting yet the local needs.

About Consulting Quest Global Directory

Consulting Quest Global Directory is the World’s Largest Professionally-Managed Directory in the Consulting Industry. Searchable by consultancy name or by region, capability or industry, it lists and describes more than 6000 consultancies worldwide, with links to their websites and social media channels. With such a powerful database, we decided to dig deeper into the directory and analyzed the consulting offering in each of the following regions of the world: North America, Europe, Middle East and Africa, Asia-Pacifics and LATAM.

Interested in Seeing More? Subscribe to the Series!

CQ Directory Insights – #2 – African Consulting Market: The Company Landscape

Welcome to the second issue of our New Blog Series -the “CQ Directory Insights”. In this series, you will learn “everything-you-need-to-know” about the African Consulting market through a set of fun infographics.  In the previous issue, we discussed that the size of the African consulting Industry to be $2.2 billion. Although the size of the market is relatively small from a global perspective, it has grown strongly over the past years, with a 6.3% growth rate. In this issue, we will dive into the sizes of the consulting firms in the region and how they compare to those on a global scale.

 

The Company Landscape

According to data collected from the CQ Global Directory, Large Consulting Firms (with 1000+ employees) make up 29% of the consulting firms in Africa. This figure is significantly higher than the global average, which is estimated to be around 10%, meaning Large Global Consulting Firms are over-represented in Africa compared to the rest of the world.

Despite the strong presence of foreign companies in the region, 57% of the consulting firms are in fact only based in Africa, and almost half of the companies have less than 50 employees. This shows that smaller niche local companies are on the rise.

More insights on why large companies make up one-third of the consulting firms in Africa will be presented in the next two issues, in which we will look into the Industries and Capabilities of the consulting offering in the region.

 

About Consulting Quest Global Directory
Consulting Quest Global Directory is the World’s Largest Professionally-Managed Directory in the Consulting Industry. Searchable by consultancy name or by region, capability or industry, it lists and describes more than 6000 consultancies worldwide, with links to their websites and social media channels. With such a powerful database, we decided to dig deeper into the directory and analyzed the consulting offering in each of the following regions of the world: North America, Europe, Middle East and Africa, Asia-Pacifics and LATAM.

Interested in Seeing More? Subscribe to the Series!

CQ Directory Insights – #1 – African Consulting Market Overview

Welcome to the first issue of our New Blog Series -the “CQ Directory Insights”. In this series, you will learn “everything-you-need-to-know” about the African Consulting market through a set of fun infographics. 

 

 

Know the Market  

In 2016, the Consulting Industry in Africa was valued at $2.2 billion. Although the market is relatively small in terms of size from a global perspective, it has grown strongly over the past years, with a 6.3% growth rate. The African consulting market is bigger in size than many of the European markets such as that of Spain and Italy.

Consulting services can be found in over 30 markets in Africa. The Top 3 Locations with the greatest number of consulting firms are: 1) South Africa, 2) Nigeria and 3) Morocco.  Among these regions, Southern Africa alone makes up around two thirds of the Africa’s entire consulting market.   Africa continues to position itself as an attractive geography with a double-digit growth in West Africa, particularly in Nigeria, and East Africa, benefiting from the reduced attractiveness of the Asian countries.

The African market as a whole is forecasted to continue its impressive growth, thanks to the rapidly growing economy and governmental push on innovation. Despite of being a market with a huge potential, there are risks for consulting business in the region including political stability and difficulty in getting paid.

 

About Consulting Quest Global Directory

Consulting Quest Global Directory is the World’s Largest Professionally-Managed Directory in the Consulting Industry. Searchable by consultancy name or by region, capability or industry, it lists and describes more than 6000 consultancies worldwide, with links to their websites and social media channels. With such a powerful database, we decided to dig deeper into the directory and analyzed the consulting offering in each of the following regions of the world: North America, Europe, Middle East and Africa, Asia-Pacifics and LATAM.

Interested in Seeing More? Subscribe to the Series!

Why Maintaining Organizational Flexibility is the Key to Sustainable Growth for your Consultancy?

Why Maintaining Organizational Flexibility is the Key to Sustainable Growth for your Consultancy?

A consulting firm is a dynamic organization that is vulnerable to the fluctuations of the business cycle. New projects come and go, and the people who staff your firm tend to change over time. While you may not have current problems with recruitment, finding the appropriate level of staffing is tricky. A major economic event could shift the entire market, meaning that your company might quickly lose or gain projects that affect your staffing scheme. Whether you have too many staff on hand or not enough, firms rarely end up in the middle with the perfect number of consultants.

Due to unpredictable economic changes, it’s important to have a flexible staffing plan that accounts for factors affecting your firm’s optimal size, considering the structure of the business and the market demand. The appropriate level of staffing is not an issue that will go away. With too many consultants, you could lose profitability in the case of headwinds. Without enough consultants, your firm could miss important opportunities to grow and profit. In addition, having excess staff could mean that your firm accepts projects for which it isn’t qualified, which creates the risk of damaging your credibility. In a consulting firm, delivering great value and return on investment for your clients is a must have, but the key to profitability is finding the size and cost structure that works for you.

Optimizing the Risk Rewards Equation

The driver for profitability, in all asset-intensive businesses, is optimizing the utilization of the assets. Consulting, despite being asset light from a tangible standpoint carries the bulk of its costs through salaries. This means that you need to find the right trade-off to get the maximum economic performance results from the utilization of each employee, without overextending your human capital budget.

Besides sizing, finding the right equilibrium between base salary and bonus Is very often an underestimated lever. Many consultancies consider the total compensation as a fixed cost and link the bonuses to the quality of delivery without taking advantage of the flexibility it could provide.

Tying part of the bonus calculation to the economic profitability of the firm can not only mitigate partially the risk of the downturn but also drive the right behaviors from your consulting staff.

Another lever can be, to change the ratio between base salary and bonus to lower the guaranteed amount but grant higher rewards if the firm is doing well. This is a deal that many young consultants are more than willing to take as it mimics the classical partner structure they aspire to.

Sizing for the Unexpected

Just like staffing for any business, maintaining the right number of employees directly affects your profitability. Keep in mind that, once you have people on the payroll, you measure profitability by what remains after their checks clear your company bank account.

Your firm makes a financial obligation to employees, at least in the short term, by offering ongoing employment and perhaps benefits and perks. When you extend your budget for more staff, financial issues and downsizing might threaten your ability to keep them on the payroll. Or worse, the pressure to keep up with your payroll needs could lead you to unscrupulous or deviant behaviors to capture new business.

You cannot always predict an economic downturn. Because of this, your firm should add new employees in stages, so as not to overextend the payroll budget. It’s always easier to hire new consultants than it is to fire them, so be prudent. If you do have to begin downsizing, you run the risk of blemishing your firm’s reputation and damaging relationships with your consultants.

Investing in Non- Production activities

When reviewing your sizing assumptions, it is important to anticipate that not all days will be productive. First by design as assignments usually don’t align themselves to optimize your own schedule. Second as you need to dedicate some time to other activities that are key to the sustainability of your company. Those activities will range from commercial and networking to more knowledge related tasks on research, capitalization, thought leadership and knowledge sharing. This layer in your resource planning is extremely important as it will condition your ability to bring something fresh to your clients and your flexibility to move from one contract to another.

Preparing for Good News

Once you have defined the minimum size and added some resources to handle other activities, choosing the right size for a consulting firm is still not an exact science. As it turns out, with a sizing like this you might be unable to take additional projects and therefore to grow your business.

The secret formula lies somewhere in the ideal balance between internal and external resources. This means that you have enough full-time consultants on staff to provide stability and to inspire client confidence. While at the same time, you have successful partnerships with external organizations and individuals to meet the requirements of special projects on schedule.

You want the size of the staff to meet the level of projected demand. You also want your company to build a network of valued partners and qualified subcontractors. This enables your firm to augment consulting staff when the demand for all projects exceeds your internal capacity. When you accept new projects, you can temporarily take on extra consultants. Later, you can scale down to the usual team size, especially after those extra projects are completed. Unless in the frame of a deliberate strategic move, none of your projects should extend your firm too far beyond its core competencies.

Partnering with Qualified Staff

While you may rely on external consultants, you must also ensure that each of these resources possesses the right skillset for the job. Not every consultant will have the appropriate qualifications for each new project. You may need a diverse recruitment strategy to attract subcontractors who can augment your operations.

Beyond the optimization of your cost base and the proper management of your company’s risk profile, working with external partners creates new business opportunities. When you expand your professional network, you can pitch new business. Your additional partners can bring capabilities that are complementary to your core business. At first, this may seem like conflicting advice, but your firm should begin by adding partners with capabilities that closely relate to your core competencies.

While you could augment your staff through relationships with other firms around the world, it’s important to choose those located in countries or regions that offer your company the biggest competitive advantage. The intent is to win new business. This occurs, in part, by attracting the interest of the companies that are familiar with your new business partners.

Be Flexible and Prepare for the Future

Your firm will eventually adjust the number of staff, hopefully, to include more consultants. This will mean that the pessimistic scenario is improving and that you are growing your activities in a sustainable way.

Even though financial challenges may arise, you will agree that the best time to add more human assets is when things are going well. When your company is successfully completing its current projects, and attracting more projects and your worst-case scenario in term of planning can cover your internal staff it may be time to consider adding at least a few consultants to your team. In essence, you are scaling up to prepare for future growth while managing risks. Looking at your teams and discussing the capabilities needed for new opportunities, as well as factoring in the use of qualified partners and subcontractors, will help you to optimize your consulting set-up.

Balancing your current resources, while leveraging partnerships, doesn’t mean you need to fundamentally change your recruitment plan but those adjustments can make all the difference on your balance sheet, reduce risk, provide higher rewards to your employees and open new opportunities to fuel your growth.

 

About Teambuilder


Teambuilder is the first global marketplace specialized in providing consultancies and independent consultants alike a shared location to communicate their project team needs and pair it with the right skills and expertise. The platform is designed to streamline the search process for bringing on consultants to strengthen your team and win more projects.