In addition, almost a fifth (18%) eventually cost “significantly more” than was estimated and only 2% cost less, according to a survey from Source Global Research.
The Big Four, however, are better at sticking to consulting budgets than the big tech firms. McKinsey, Bain & Company, and Boston Consulting Group overrun budgets the least often (60%).
Clients believe that the rates are too high across the board, with three quarters (74%) saying consultants do not create enough value for the cost. However the study also found that consulting firms offer some form of discount on two thirds (66%) of projects, with the Big Four the most likely to do so.
“Discounting is playing a vital role in the US consulting market,” said Fergus Blair, a senior analyst at Source Global Research. “When clients extract discounts from the consulting firms they negotiate with, they come away thinking that they have ‘beaten’ the market—even if the reality is that they are ending up with the same deal that everyone else is getting.”
The survey of senior executives, the majority of which help run businesses with annual revenues of more than $1bn, expect fees to increase over the next five years.