Caribbean Export/CICMC:Management Consulting Industry Report

Management Consulting Business Symposium 2 St. Kitts & Nevis

29 June 2010

Project DescriptionAims• Profile management consulting industry• Strategy for development of the industryGoals• Help local consultants access regional/external markets• Stronger industry to support development of regionProcess• Local surveys of suppliers and purchasers of services in:

1. The Bahamas2. Barbados3. The Dominican Republic4. Jamaica5. The OECS (Antigua and St. Lucia)6. Trinidad & Tobago7. Martinique

• Draft report based on supply/demand gaps

The Market: Spending

Amount Spent Yearly (US$)

Percentage of Respondents

Mid-point Value (US$)

Share of Market Value

$10,000 - $19,999 36% $15,000 3%

$20,000 - $49,999 18% $35,000 3%

$50,000 - $99,999 13% $75,000 5%

$100,000 - $249,999 14% $175,000 12%

$250,000 - $499,999 6% $375,000 12%

$500,000 or more 13% $1,000,000 65%

The Market: Approach to Consulting

• Few projects: consulting valuable add-on, not part of business model

• High value spend on strategy or systems, smaller amounts on process-type services

• Although small/young businesses need strategy, most spend on process services: need to show benefits to develop this market

The Market: Performance

• Satisfied + very satisfied:▫Locals: 82%▫Regional: 82%▫Extra-regional: 72%

Management Consulting Industry Profile

•64% 1-4 employees, 82% 9 or fewer

Management Consulting Industry Profile

• Productivity critical indicator of profitability• Productivity benchmarks: 2xsalary min, 3x good, 4x

very profitable• 2 groups exist: 1-new/struggling firms, 2-mature

firms

Revenue in 1-4 Employee Group (Average of 1.45 professional staff)

Revenue Bracket% in Revenue

Bracket MidpointRevenue per

Employee$10,000 - $19,999 30% $15,000 $10,323$20,000 - $49,999 26% $35,000 $24,086$50,000 - $99,999 26% $75,000 $51,613$100,000 - $249,999 13% $175,000 $120,430$250,000 - $499,999 5% $375,000 $258,065$500,000 or more 0% - -

Supply/Demand Implications

•65% of market value in large assignments, but only 13% of number of clients

•54% of clients spend under US$50K annually▫Two-tiered market, weak middle

•Quality issues thrown up by Group 1 firms▫Need for skills development

•Flight to safety: big names on big value projects, small local firms pushed out▫Need for quality assurance-CMC

•Still hard for Group 2 firms to tap top segment▫Need for market development/intelligence,

alliances

Demand Side Recommendations•Develop market for higher value

consulting, particularly strategy consulting▫Focus on MSME market to help small consulting

firms▫Will help fill in weak middle

•Need to educate customers on benefits of consulting, process and reasonable outcomes▫To do this use active (workshops, newsletters)

and passive (information packages) techniques▫CICMC could provide consulting services to

BSOs serving MSMEs; act as business cases and learning opportunities

Supply Side Recommendations•Marketing BDS: Benefit all firms▫Opportunity identification: Centralise gathering of

market intelligence, advise on market trends▫ Improve positioning in key marketing channels:

Alliances between Caribbean firms, partnering with extra-regional firms (member directory)

▫Guidance in preparing marketing material▫Guidance in responding to tenders

•Professional BDS: Benefit Group 1 firms▫Develop technical and consulting competency, CMC

and advisory services▫Advice on defining service offering, consulting

operations (setting fee rates, management systems)▫ Provide quality assurance supplementing CMC

Implementation

•CICMC to lead implementation, support from CE, form strategic alliances with national industry associations where they exist▫Appoint a Strategy Director to act as point

person, draft implementation plan based on Strategy

▫Lobby on behalf of industry in ongoing initiative to regulate management consulting

•Goal is sustainability: Need for CICMC to become service driven industry association, eventually decrease role of CE▫Self-reliant associations: membership fees, fee-

based services, professional/promotional events

Thank you