Over the past 12 to 18 months, businesses have navigated through a challenging landscape marked by high interest rates and inflation. Many organisations were hesitant to embark on strategic projects, particularly when capital was scarce. During this period, we saw a surge in cost-cutting initiatives, with reduced headcounts and a focus on conserving cash. Strategic growth and transformation took a back seat as businesses waited for more stable economic conditions.
However, sentiment is now shifting. With the election of the new government and the promise of lower inflation and stabilising interest rates, businesses are beginning to reconsider their postponed transformation initiatives. Organisations that had shelved ambitious projects are now re-engaging, and we expect to see a steady increase in greenfield projects as we move into Q4 of this year and into Q1 of next year. This uptick in activity is already visible among our clients, particularly tier-one advisory and global consulting firms, which are reporting robust pipelines for 2025.
While the mood is generally positive, we haven’t yet seen this enthusiasm translate into widespread hiring or tangible project approvals. The process is gradual, but the momentum is building, and we anticipate more significant investments in technology-led programmes, especially as businesses gear up to drive value through digital transformation.
One major area of focus is SAP’s upcoming discontinuation of support for its ECC 6 module, set to end in 2027. This means businesses need to upgrade to S4 HANA, a major undertaking that will require a significant investment of time and resources.
We’re already seeing organisations in the race to complete this transition, particularly larger global, matrixed companies. The transformation required will touch every workstream, from finance to HR and data, necessitating a comprehensive approach to data migration and integration.
Private equity (PE) firms, as always, remain agile. With cash reserves built up during the slower M&A activity of the past year, these firms are well-positioned to invest in transformation programmes that will generate value post-acquisition. As PE houses look towards exits in the coming years, transformation will be key to enhancing portfolio value and preparing businesses for sale.
Artificial intelligence (AI) and machine learning (ML) remain prominent in discussions, though there’s still some uncertainty about their application. Many businesses are excited about the potential of generative AI but aren’t entirely clear on how to implement it effectively. The conversation around AI is growing, but there is a knowledge gap at the board level regarding how to operationalise these technologies for real business outcomes.
As businesses prepare for the resurgence of transformation programmes, talent acquisition remains a critical challenge. In the early stages of this recovery, businesses will have the upper hand in recruitment, able to be selective in their hiring. But as demand for specialised skills like AI grows, the market will tighten, making it more difficult for companies to find the perfect candidate.
As the co-founder of The Consultancy Group’s Transformation division, I’ve worked with organisations across the UK, Europe, and the USA to deliver large-scale, high-impact transformation initiatives. Whether it’s implementing complex ERP systems like SAP S4 HANA or driving strategic change across Finance, Technology, HR, and Procurement, we have the expertise to support your organisation’s goals.
Our team specialises in placing senior leadership roles and managing transformation projects for multinational groups, FTSE 100 companies and Private Equity portfolios. If your business is preparing for its next phase of transformation, I’d be happy to discuss how we can provide the right expertise and guidance.
Feel free to connect and we can explore how best to support your organisation’s needs.
