Digital transformation returns to growth: Market momentum builds across 2026–27

A market turning a corner

After a challenging period of subdued activity, the UK Tech consulting and services market is poised for a return to growth.

Industry sentiment has strengthened, underpinned by rising demand for digital transformation, data services and cyber security. The Management Consultancies Association (MCA) forecasts revenue growth of 5.7% in 2026 and 7.4% in 2027, marking a welcome rebound following three years of declining or flat performance.[1]

While the outlook remains more measured than the rapid expansion seen pre‑2022, the shift signals renewed confidence across firms of all sizes as clients re‑engage with digital programmes and technology‑enabled change. We expect to see an uptick in M&A activity in the space, based on our own experiences and also evidenced by Partners Group-backed Version 1 recently announcing the acquisition of UK-based digital transformation consultancy CreateFuture, an early indication of a renewed confidence.

Digital transformation re‑emerges as a priority

Demand for digital transformation consulting will increase in 2026. According to the MCA, 69% of UK consultants expect increased demand for this capability – making it the clear second priority after AI (78%), but ahead of cost reduction (42%).

Data services will amplify this opportunity further. As organisations modernise their digital infrastructure, they’ll need to simultaneously upgrade data platforms to support AI adoption – creating sustained demand for consultancy support.

Public sector opportunities

The growth in digital transformation will be particularly pronounced in the public sector, where digital maturity continues to lag. The State of Digital Government Review highlights that 47% of central government services and 45% of NHS services remain non‑digitised, underscoring the scale of the challenge – and the opportunity available to businesses offering digitalisation services[2].

Despite scrutiny over third‑party spend, digital transformation providers can play a critical role in helping public bodies address poor user experience, modernise legacy systems and unlock cost efficiencies.

The scale of upcoming public sector procurement cycles is also expected to create meaningful opportunities for tech consultancies and service firms. According to analysis from public sector data provider Tussell, £11.3bn of public sector technology contracts are due to be retendered in FY26/27 – and this is excluding any new programmes that are yet to be announced. This substantial pipeline is likely to make tech consultancies with established framework positions particularly attractive acquisition targets.

Recent M&A activity further highlights the premium placed on firms with strong public sector credentials. Notable transactions include Accenture’s acquisition of Decho in October 2025, an AI consultancy and Palantir implementation partner; Digital Workforce’s acquisition of NHS automation specialist e18 Consulting in July 2025; and CGI’s acquisition of BJSS in February 2025, which underscores the value of scale and deep public sector practices. While G-Cloud 14 approved supplier CreateFuture (acquired by Version 1) has a growing public sector footprint.

Cyber security remains a magnet for investment and M&A

Cyber security remains an area with appealing market growth and tailwinds as organisations increase spend to mitigate proliferating cyber risks, which has resulted in cyber consultancies continuing to attract strong interest from both trade buyers and private equity.

Recent transactions illustrate this trend, including LDC’s investment in Daintta in April 2026, Reply’s acquisition of Cyberis in February 2026 and Horizon Capital’s investment in Threatscape in January 2026, reflecting the strategic importance of cyber capabilities as businesses seek to strengthen resilience and meet rising regulatory expectations.

Outlook: steady recovery with strategic opportunities

The tech consulting market is entering a period of measured but meaningful recovery. Digital transformation, cyber security and data modernisation will remain central to client priorities, with the public sector representing a significant engine of demand.

As a result, M&A activity is expected to pick up, particularly where targets offer access to high‑value frameworks or differentiated digital experience capabilities.

For buyers and investors, the next two years present a window to secure strategic positions ahead of a broader market upswing.

[1] https://www.mca.org.uk/press-releases/uk-consultants-forecast-higher-growth-as-demand-for-digital-technology-is-expected-to-surge-in-2026?utm_source=copilot.com

[2] https://www.gov.uk/government/publications/state-of-digital-government-review/state-of-digital-government-review