Ex-Consultants Agency:

Disruption in Management Consulting

What disruption?
BACKGROUND

The global consulting industry continues to grow at a steady rate, with no immediate signs of
slowing down. Across the many flavors of management consulting, the strategy segment has
grown the most in recent history, and for good reason. Fortune 500 CEOs continue to engage
top-tier firms to help drive value to their top and bottom lines.

Global Management Consulting Market

Segmented by Type (in Billions USD)

4.4% 189.7
181.7
172.9
30.9 4.1 %
164.5 29.7
156.9 28.7
153.1
27.7
25.3 26.7 37.7 6.6 %
35.4
32.5
30.0
27.4 28.2

49.8 50.9 2.3 %

48.2
44.6 46.5
45.5

70.2 HR
63.6 66.8 5.0 %
54.9 57.4 60.3 Strategy
IT
Operations

2011 2012 2013 2014 2015 2016E

Source: Consulting Edge Strategy Consulting is Growing the Fastest

So whats wrong with this picture? Nothing really. Clearly, clients see merit and positive ROI on
management consulting spend, or they would reallocate the billions of dollars to more useful
endeavors. Yet, we are witnessing major disruption in the industry. Not because the consulting
market is broken - rather, there are a number of macro-factors lending to a reshaping of the
landscape.

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Whats driving this?
MACRO FACTORS

Gone are the days of consultants flying first-class, eating expensive steak dinners, and working
100+ hour weeks. Enter a new model, where consultants spend a few years getting top-notch
training from pedigree firms, and then work for the clients they wantwhen they want.

A lot of factors are contributing to this changing landscape, from shifting cultural norms to
increasing client sophistication:

Key Factors Driving Disruption

1 4
Clients are increasingly building
internal corporate strategy teams
Increased Client Teams are typically staffed with
Sophistication former management consultants,
making for sophisticated buyers
Advances in technology continues
to allow more and more consultants
Emergence of to conduct business from home
Remote Workers Changes in cultural norm continue
to support this shift as well

2 5
New players (e.g. curated networks,
freelancers, etc.) are entering the
Emergence of Lower management consulting market
Cost Players Able to offer clients reduced fees
with comparable talent to larger
firms
New models rely on robust
databases to source and vet talent
Digitization / for clients
Big Data Technology Technology is quickly becoming a
core capability for all consulting
models

3 6
Traditionally high turnover at
management consulting firms
Growing As larger firms grow, their alumni
Alumni Pools networks do toproviding ideal
talent pools for lower cost players
Larger players continue acquiring
mid-sized strategy firms to offer
Consolidation of clients full-suite of services
Mature Players Mid-size players increasingly
challenged to compete in market
where scale benefits matter

Source: ECA Analysis

The goods news? Like most markets, increased efficiencies mean more winners than losers.
Clients end up paying lower rates, thus increasing their ROI on consulting spend and driving
shareholder value. Consultants actually earn more on a per-hour basis, waste less time brown-
nosing partners, and theoretically get more time with their families.

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What are the prevailing models?
KEY BENEFITS

There are three major types of consulting models. They tend to differ based on four major
dimensions:

1. Cost / Client Pricing: How much clients are billed per hour
2. Speed of Deployment: How quickly an engagement can be kicked-off
3. Talent / Experience: How experienced the consultants are
4. Core Capabilities: What these firms must excel at to win

Prevailing Management Consulting Models

Traditional Curated Freelance

Consulting Model Network Model Model

Examples

Cost / Premium Pricing Value Play Low Cost

Client Pricing Managers bill at ~$600-900 per hour Managers bill at ~$250-300 per hour Rates vary based on bidding process

Speed of Slow: Client Driven Fast

Deployment Proposals / pre-work 1-3+ months Resources deployed in ~3 weeks Work can begin in a matter of hours

Wide Range Robust Variable

Talent / Experience
Partners to recent college grads Large resource pool, rigorous vetting Based on bidding process

High Profile Project Delivery Deep Industry Experience Matching Algorithms

Core Capabilities In-house Research / Publications Speed of Deployment Maintaining Two-Sided Platform
Long Term Relationships Fast-Turnaround Project Delivery Low-Priced Provider

Source: ECA Analysis

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Is traditional management consulting dead?
NEAR TERM PROSPECTS

Emerging models do not pose a significant threat to traditional firms rather, they should be
viewed as complimentary players. Each of these models has an important place in the
consulting value proposition for clients.

High-Profile Strategic Analysis / Presentations /

Client Types
Strategy Engagements Operational Improvements Discreet Analysis

Ideal Model
Traditional Curated Freelance
Consulting Model Network Model Model

Large-Scale Strategy / Salesforce Effectiveness

Fundraising Presentations
Transformation Initiatives Pricing Strategy
Example Financial Models / Projections
Outsourcing Market Assessment
Project Types SWOT Analyses
New Product Launch Sourcing / Procurement
Marketing Plans
Brand Strategy Initiatives

Brand name matters
Partner expertise is required
Rationale
Large consulting and client
teams necessary
Value / cost more important Speed and cost are prevailing
than brand concern
Smaller teams (1-3) can drive Significant portion of freelance
work independently network in graduate school

Source: ECA Analysis

While each of the models has an ideal use-case, we can still expect competitors to grab share
in other areas. For example, PE firms are increasingly hiring consultants from the curated
network firms to run high-profile operational initiatives.

The future largely remains in question for the industry as a whole, and each model has their
own challenges. Traditional firms will need to be nimble and leverage technology when possible.
Emerging models, on the other hand, will likely need to build a certain level of in-house
capabilities if they want to continue to grow. Regardless of the outcome, it seems that clients will
surely see more and more value for their money.

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Example: Cost Savings on a Consulting Engagement
ECA VS. EQUIVALENT TOP-TIER FIRM

Cost Comparison
ECA vs. Equivalent Top-Tier Firm

20%
ECA Rates Flexible Travel No Partner
~50% Less Arrangements Overhead

Up to 80% savings,
when compared to the
50% 20% 10% 80% traditional management
consulting model

Equivalent Top-Tier Firm 100%

Source: ECA Analysis

Why ECA?
WHAT MAKES US DIFFERENT

Ex-Consultants Agency is extremely well equipped to assist companies with various consulting
engagements. We are redefining the way clients utilize top-tier consultants. Our leadership team
is comprised of top-tier management consultants and we have built a robust technology platform.
Our model is backed by a set of differentiating capabilities:

1. Speed & Efficiency: Projects kicked-off in as quickly as 3 weeks

2. Expertise / Ideal Candidates: 30K+ top tier management consultants, with experience
in 50+ industries, across 25+ functional areas, across more than 40 countries
3. Significant Cost Savings: Up to 80% savings when compared to the traditional
management consulting model
4. Strong Track Record: We have worked with a range of clients from Fortune 500, to
high-profile private equity firms

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 5.
QUESTIONS

ECA Leadership Team

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Founder & CEO Senior Director
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Engagement Director and schedule your
FREE Strategic Needs Assessment
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Finance Director Engagement Director
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Senior Advisor Growth Manager
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