The report on the South African Business and Management Consultancy sector describes the current market, looks at developments and global trends and discusses factors influencing the success of the sector. The report also profiles 41 South African-based companies.
Business and Management Consultancy Sector
This report focuses on Business and Management Consultancy activities in South Africa. The industry, which generates an average annual income in excess of R70bn, provides over 100 different services to industries in every sector of the economy. The Institute of Management Consultants of Southern Africa (IMCSA) estimates that there are approximately 60,000 consultants based in South Africa.
Over the years, the market has become increasingly competitive. Although around 90% of business and management consultancies are micro-businesses, large consultancies, which are typically awarded high value projects, account for 85% of the industry’s total income. The challenging economic climate has compelled numerous clients to cut their consulting budgets and some of the larger companies, notably the ABSA and FirstRand groups, have established their own in-house consulting divisions. Consultancies continue to report declining margins and it is becoming increasingly commonplace for consulting contracts to include caps on overall cost, lower hourly rates, as well as tighter restrictions on project-related expenses. The recommendations made by Auditor-General for the South African Government to slash expenditure on consultants, is another problem confronting companies in this sector.