Rising profits and increased disruption increased the use of consultants in Canada’s financial services sector, with much of the revenue going to the Big Four accounting firms, according to a new report.
The report, from Source Global Research, found the consulting arms of accounting firms—dominated by the Big Four—grew faster last year than the overall consulting market, growing 6 percent to $1.55 billion, and faster than any other type of firm. The ability of firms like PricewaterhouseCoopers, Deloitte, KPMG and Ernst & Young to offer a wide and deep solution set made them a safe choice for clients uncertain about where to turn for support.
Canada’s wider consulting market saw relatively healthy growth of 4.9 percent to $3.91 billion in 2017. As companies across the economy invested more heavily in new technology, the share of consulting work related to digital transformation projects rose quickly, nearly quadrupling in size from $206 million in 2016 to $786 million in 2017.
The health care market was the fastest growing for consulting work in 2017, increasing 7.2 percent to $226 million. Health care providers hired consultants to help them deliver better quality services and reduce operational costs, prompting many clients to completely overhaul their IT systems so they could deliver new services such as e-prescriptions.
“Health care is once again a star sector this year, as it was last year, specifically in the public sector,” said EY’s Canadian advisory performance improvement leader Linda Williams, who was interviewed for the report. “There’s a lot of demand to redirect cost toward modernizing service to Canadians.”
Last year was also a year of growth for consultants to Canada’s public sector, with revenues growing more than 4 percent to $689 million. While confidence in Prime Minister Justin Trudeau’s liberal administration was part of the reason behind this, according to the report, an efficiency-inspired digitization agenda was the main reason consultants saw greater demand throughout 2017.
“Canada has been trailing behind the most advanced markets in terms of digitization, but in 2017, we saw digitization make significant advances here,” said Edward Haigh, a director at Source Global Research, in a statement. “This shift has been driven by increasing disruption from digital leaders—both foreign and domestic—and a pressing need to replace creaking legacy systems. At the same time, increasingly attractive new-technology use cases pouring in from other markets—especially the U.S.—served as a powerful pull, helping to drive digital transformation projects.”
On the federal side, the largest public sector projects focused on migrating clients away from legacy IT infrastructure to more efficient cloud-based technology. On the municipal side, there was greater focus on immediate cost savings, especially through use of automation in back-office functions.
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