The Italian consulting market—can things really only get better?

The Italian consulting market, after years of high expectations counterbalanced by poor performance, finally achieved a little bit of growth in 2015. True, only 1% growth, but any growth at all in a market that has experienced years of negative or low growth has got to be seen as a good thing.

But how much are things really looking up? It’s our fear that the structural problems at the heart of the Italian consulting market could be such that it will be many years before this market really takes off again. The fundamental issue is that this is a mature market, and one that is therefore well-served (even over-served) by consulting firms. And with very few indigenous large companies around—even fewer since the financial crisis—there is a relatively small pool of large consulting buyers in Italy. Whilst family owned, and mid-market clients present an alternative market, small projects and low prices are very much the name of the game here, with the result that it continues to be very difficult for consulting firms to make very much money in Italy.

Digital could still be the great hope that transforms this market, forcing clients to invest in scarce and valuable expertise in order to transform their organisations. But this is taking a while to gain traction, and we’re starting to get a bit dubious about the degree to which even digital will change things in the near future.

But it isn’t all bad news. Whilst this is undoubtedly a difficult market for all, larger firms are doing the best here—the Big Four are seeing quite respectable levels of growth—and those firms that are committed to (and have the money to invest in) developing differentiated services and innovative assets will be the best positioned to survive this prolonged period of less-than-stellar growth. Manufacturing work is starting to take off, and technology work (albeit much of it currently focused on systems optimisation rather than shiny new digital development) is also doing OK. So it could take a while, but maybe ultimately things will get better for some, even if the difficult times are not over quite yet.