Austrian consulting market breaks through €5 billion income barrier

The Austrian management consulting market is set to break the €5 billion fee income barrier this year, with an especially high market share commanded by strategic consulting services.

Growing at a rate well above the nation’s GDP, the management consulting market of Austria is this year forecasted to pass the $5 billion revenue mark for the first time. According to a Consultancy.eu analysis of data sourced from the local consulting sector association UBIT, the Austrian management consulting sector has been tracking at a growth rate of roughly 6.5 percent or above in recent years, with GDP growth as a contrast only just picking up after sluggish rates of below 1.5 percent for the past half a decade.

Yet, while the projected $5 billion-plus revenue take for the year would place the Austrian management market at the very spikey end of the European table, such as if measured against the $4.5 billion market in France (in fact one of the top three country markets in Europe alongside Germany and the UK), the market data is compiled in varying ways by different sources, with for example the French data excluding activity conducted by smaller consultancies, and certain ICT services often omitted. Still, the German-speaking DACH region (Austria together with Germany and Switzerland) is the largest consulting industry of Europe.

Notable in terms of the data compiled by UBIT (the Austrian Professional Association for Management Consultancy, Accounting and Information Technology), is the size of the local strategy consulting industry as a share of the overall market when compared to the European average and other regional hot-spots. For Austria, which pulls in 85 percent of its revenues from within the EU, strategy consultancy accounts for a one third overall market share – compared to the less than one fifth average for Europe, and a figure as low as 8 percent in the UK.

Elsewhere, operations consulting – which includes activities related to Business Process Re-engineering (BPR); customer/supplier relations management (CRM); turnaround/cost reduction, and purchasing & supply chain management among other areas, and is commonly the largest segment in developed markets (commanding a whopping 40 percent share in Germany) – is Austria’s second-largest segment, at ~18 percent, while people & change (HR and support for organisations in dealing with change on a human level) is the third largest with a ~15 percent share.

According to the researchers, the presently dominant segments, together with Sales & Marketing (which consists of customer insight and relationship management, sales and channel management, product portfolio management and branding, and digital marketing and is currently the fourth largest segment locally with an 11 percent market share) are expected to continue growing at a significant rate. So too, management industry employment numbers, which were projected to grow by almost 10 percent over the past year or so after eclipsing 12,500 in 2016 – with the country home to an additional 23,000-plus self-employed consultants.

In terms of clientele, the Consumer & Industrial Products sector is by far and away the largest local consulting market buyer, accounting for close to 38 percent of fee generation. The Public Sector is the second biggest spender on management consulting services, at around 9 percent of total revenues, followed in order by the financial services, energy & utilities, and telecoms & media sectors, ranging from shares of 5 to 2 percent. Overall, recent years have seen exported services account for around a fifth of the Austrian turnover, with just 3 percent deriving from beyond the EU.

Trends projected to impact the dynamics within Austria’s management consulting industry include the continued rise of independent consultants, growing competition from internal consultancy clubs and technology players commoditising transactional activities, as well as changing client behavior (e.g. favouring boutiques and niche specialists in some sectors of the industry). Services that are enjoying high demand in 2018, and beyond, include Disruptive Innovation Management, Change Management (on topics such as flexible workplace environment and changing demographics), Business Process Optimisation, IT Strategy, Operational Excellence (Lean, Agile, etc.), Industry 4.0 and Design Thinking.

Leading the way in many of these areas in Austria are some of the world’s largest strategy and management consultancies, including American giants McKinsey & Company and The Boston Consulting Group, which, given the value of the market, not unsurprisingly have permanent bases in Vienna. Global firms such as Roland Berger, Simon-Kucher and Horváth & Partners, which all boast German heritage, are also present in Vienna and likely enjoy a small competitive edge, while Accenture, A.T. Kearney and BearingPoint are among other firms with local outlets along with the consulting arms of the Big Four. 

Meanwhile in Austria’s consulting market, Cegeka's recently acquired Vienna based IT consultancy Solutions Factory, in a deal that was advised on by KPMG Corporate Finance.

For all market sizing analysis of European consultancy markets, see the section News | Consulting sector.