Coronavirus Causes Losses for Global Management Consulting Industry, Beroe Analysis
Management consulting, one of the industries which involves extensive travel, has been adversely impacted by coronavirus pandemic. The global management consulting industry is expected to lose around $30 billion of value in 2020, as clients tend to delay projects, decrease scope or cancel them altogether, according to Beroe Inc, a procurement intelligence firm.
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Consulting firms with a strong technology footprint and/or well-established client relationships are still seeing opportunities. The anticipated economic slowdown as a result of COVID-19 indicates that challenging years are ahead for consulting firms.
The management consulting industry is expected to shrink across the globe. Travel restrictions due to COVID 19 have impacted the management consulting industry as typically, management consulting professionals spend nearly 80 percent of their working lives away from home. Organizations are stabilizing their bottom line by eliminating discretionary expenses, limiting hiring and also reducing the use of external advisors. This will reduce the demand for consulting services and cause a revenue dip for the global management consulting industry.
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Beroe, which is based in North Carolina, further stated that procurement experts can access this report on market intelligence platform Beroe LiVE: live.beroeinc.com
As a result of the coronavirus pandemic and economic slowdown, consulting firms might take up a digitally centered approach and provide services at a lower cost due to elimination of travel expenses. Major industry risk drivers with almost certain risk probability are the demand for management consulting and consulting billing rates. Demand for consulting services might decline due to cost cutting by client firms. In addition, the consulting billing rates are expected to drop by 10 to 15 percent, with the drop in rates varying by service line.
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