Source Global Research, based in London and with New York offices, is essentially a consultant’s consultant: The company produces an annual survey in corporate management-consulting trends, and advises those corporations on structuring their consulting projects. Its latest US survey, released last month, shows that the pharma and biotech industries are near the top in revenue growth, with spending in the sector having risen 10.4% in 2015 (as compared to an all-sector average of 7.7%); greater than 10% growth is projected for this year as well. M&A activity is a leading driver of revenue for consulting firms; other drivers are changing reimbursement models from payers; the advent of biosimilars; and lean manufacturing models.
Edward Haigh, a director at the firm, notes that one of its innovations is defining the “addressable” consulting market: the analysis is limited to consulting firms of more than 50 employees, and excludes most types of hands-on outsourcing work including IT implementations, HR management and the fees generated by financing M&A. Tax advisory and audit services are also excluded.
Haigh notes that consulting revenues generally follow the overall trends of the various sectors that Source Global Research tracks—energy and natural resources are trending lower currently, while healthcare, retail and technology & media are trending higher. The biopharma industry saw annual growth rates about half of what they are now in the early 2010s, when the patent cliff was in full swing. “Biopharma was a reluctant user of management consulting then, but now it’s a pretty good place to be,” he says.
An overall trend for management consulting across the board is a “bifurcation” between higher-volume, commoditized types of services, versus industry-specific, higher-level strategic work. “Buyers of management consulting services have become adept at contracting for the high-volume services, and are willing to shop those projects around for the best price. Clients looking for answers to the new big questions that require sector knowledge and more sophisticated analysis aren’t as price conscious.”
Reports from Source Global Research are available on a regional basis, along with subscription services and consulting.