Extracts of Source Global Research Interview with Pierre Briand

Source Global Research: Do you expect the decline in consulting demand to be long term?
There is a cyclicality in these things. In Australia there is an election this year, and consulting demand typically slows before elections, particularly in the public sector. But that usually rebounds after the election.

A more fundamental factor that could impact the consulting sector is AI, as this is primarily disrupting the professional services industry. AI poses a threat for consulting firms engaged in lower-value business improvement work that does not offer a clear value-add.

While no one yet knows exactly how to transform their companies through AI, all major consulting firms have already begun integrating it internally. This has changed ways of working and the profiles of staff, meaning traditional benchmarking analysts and lower-level
consultants are likely to be disrupted.

Source Global Research: Post-election, where do you expect the demand to be for consultants?
The question is not necessarily ‘where’, as there will continue to be significant work in defence and infrastructure. Rather, it is ‘how’, as there is the perception that a coalition government would be more inclined to outsource consulting services than a Labor government.

Each company has its own government contacts, so some contract shifts are expected. However, companies are unlikely to make major decisions until after the election, even though many sectors are not directly affected by it and the differences in economic policies between the parties are not particularly significant.

Source Global Research: What are clients thinking around the Australian economy and macroeconomic environment?
In 2025, GDP growth is expected to be 2.3%. This outlook is more optimistic than in Europe, with the upcoming election and anticipated interest rate reductions expected to have a positive impact. However, the B2B sectors linked to consumer spending, such as retail, remain weak. The more important macroeconomic influences are likely to come from overseas (US, Europe, China), factors beyond Australia’s control.

Source Global Research: Did the competitive landscape change for consultants in 2024?
The financial results for accounting and tax firms showed bigger firms in negative territory, while second-tier firms performed better. But some smaller firms saw their profitability impacted—as the consulting market operates on a fixed-cost model, losing just a few clients can have a direct impact on their profit & loss. This is also why there are fewer candidates for M&A. If a firm is not doing well, it becomes more challenging to sell, as it is less attractive to potential buyers.