The IT consulting business in going through major changes and the market appears posed for only moderate growth.
"The growth in this sector is much more modest than last year," notes Tom Rodenhauser, vice president of consulting for Kennedy Information Inc., a research firm. "There's been growth the past few years and now were seeing cost cutting."
Kennedy expects demand for IT consulting to grow at a compound annual rate of 6% between 2008 and 2010—and it expects capacity at IT providers to continue to expand, potentially pushing fee levels down.
Many consulting firms are now switching their focus in search of revenue.
"Last year most of the IT consultancies were focused on stitching together enterprise applications," Rodenhauser says. "This year, the emphasis is on seeing all the applications work together and lowering IT overhead."
And, notes Rodenhauser, the market has seen other significant changes. Most notably, the $13.9 billion acquisition of EDS by Hewlett-Packard this past May. In terms of technology consulting, EDS is the more developed of the two, Rodenhauser says. "Now we'll see how it operates under HP." HP is establishing a new business group, which it is calls "EDS: An HP Company," which will be headquartered at EDS's existing executive office in Plano, Texas.
Another important trend for CIOs to watch, according to Rodenhauser, is the demand for consultants that can deliver both management and IT consulting capabilities during a downward economic spiral. This has helped consultancies such as Accenture and McKinsey, which have always had a strong management consulting capabilities, and slowed down the hard charging Indian consulting outfits that haven't been known for providing management consulting services - although most are now beefing up in those departments.
With all the changes, the CIOZone thought this would be a good time to list the major consulting companies with their areas of practices.