Damian Wild

It was over a decade ago that I first met Rod Aldridge.

By then he was already chairman of Capita but I didn’t recognise him as he sat unassumingly among a patchy audience at a public sector conference. He chatted amiably enough but clearly wanted to listen to the presentation ­ I forget what it was on ­ so I left him to it.

Fast-forward to today and things could hardly be more different. Few consultancy success stories can match that of Capita’s. From humble beginnings (it’s hard to believe now that it was once the commercial arm of the smallest of the UK’s main accountancy institutes), Capita has grown into the eighth biggest business advisory consultancy in the country, according to our latest league tables. More than 10% of Capita’s £1.4bn turnover comes from what we classify as business advisory work.

Aldridge himself has suffered something of an unfortunate fall from grace, choosing to fall on his own sword after becoming caught up in the recent Labour loans scandal. As his finance director Gordon Hurst told our sister title Accountancy Age this month: ‘It’s a shame. He was gutted the way his personal decision came out’. You can, by the way, read the complete interview with Hurst on our website, www.managementconsultancy.co.uk ,this month.

BELOW THE STRATOSPHERE

But while Capita climbs our latest league table, its growth in the business advisory market probably falls a little short of its ambitions. That’s certainly the case for the market at large. The industry’s hopes of double-digit growth failed to materialise in 2005 ­ and even failed to match the rate seen in 2004 ­ although it was still pretty healthy at 9.6%.

In this month’s issue we attempt to get to the bottom of just where the growth for consultancy is coming from.

The financial services industry continues to perform strongly and spend heavily on advice. More specifically, it’s the banks that are increasingly turning to external advisers to help them confront what they once viewed as business certainties. The public sector, as Aldridge or any of his soon-to-be former colleagues will tell you, is playing its part too.

And where is the money going? Well, the multinationals may continue to rely on the tried and tested blue-chip advisers, but elsewhere businesses are increasingly turning to new players ­ boutique consultancies and, whisper it, the big accountancy firms whose appetite for advisory contracts is increasing by the day.

Is there anything that could derail the industry? Plenty. After all, consultancies are businesses whose fortunes are linked inextricably to the fortunes of the companies they advise and the industries and the economies in which they operate. And then there is the small matter of people. Hiring the right professionals has never been harder.

Can the consultancy industry cope with these challenges? It’s better equipped than most other industries to do so. If you make your money from helping your clients surmount their business obstacles, then tackling your own challenges should really be a piece of cake.