In her final piece, Cocoa Gao looks at how the clearly defined line between traditional consulting work and technology work has become blurred as a result of rapid IT developments, and how this will create a new competitive landscape.
Next week, we'll be sharing Cocoa's whitepaper on Artificial Intelligence in the Management Consulting industry, and we'll soon be showcasing more thought leadership on ESG and the Future of Retail Banking.
The management consulting industry is rapidly evolving as a result of emerging technologies. The clearly defined line between traditional consulting work and technology work has become blurred as a result of rapid IT developments. The level of competition for the consulting industry will become even more intense than before.
Changes to the competitive landscape
The following sections contain three examples of how the management consulting industry’s competitive landscape will evolve as a result of rapid IT developments.
New breed of competitors
Emerging trends have created a new breed of competitors for the consulting industry – companies like Domo that specialize in business intelligence tools, business analytics platform, and data visualization. These companies provide full solutions that connect analytics, visualization, and cognitive computing with various platforms. They help their clients design, implement, and maintain next generation technologies across organizations. These types of services overlap with many existing deliverables that consulting firms are providing.
Many consulting firms have also announced partnerships with big tech companies in recent years to extend their service offerings. For example, Deloitte has partnered with Apple since 2016 to bring iOS solutions to solve a broad range of client challenges, helping their clients to accelerate business transformation. Capgemini has also partnered with Salesforce to help organizations improve their digital capabilities. This type of partnership is a win-win strategy for both consulting firms and tech giants. Consulting firms will be able to leverage the knowledge and expertise from tech companies to deliver faster results and speed up projects. This also enables consultancies to raise revenue from additional resources.
More intelligent clients
In the past, consultants’ value-add has been largely driven by information asymmetry. In today’s internet age, this advantage is slowly disappearing as information and data have become more accessible than ever before. As a result, clients have become more knowledgeable. Many companies have started to hire more internal consultants to increase their internal expertise. External consultants are hired mainly for more complex projects or specific areas where the companies know exactly what they need help with. Therefore, it will become even more crucial in the future for consulting firms to have specialized skills and the ability to serve niche markets. In addition to developing talents internally, consultancies can also look for talents externally by having access to subcontracted consultants with specialist skills.
Consulting firms of all sizes will be able to leverage the AI technologies to increase their competitiveness in this evolving landscape. Large consulting firms will be able to employ AI solutions in their marketing and service distribution processes and benefit from economies of scale whereas smaller firms will be able to utilize AI solutions to lower their overhead costs and provide high-quality services.
“Apple-Deloitte team press release.” Deloitte. [Https://www2.deloitte.com/lt/en/pages/about-deloitte/articles/apple-deloitte-team-press-release.html].
Co Match “The changing landscape of consulting: Three new business models.” 2017. [https://www.comatch.com/en/comag/changing-landscape-consulting-three-new-business-models/].
Kaplan, Soren. “The Business Consulting Industry is Booming, and it’s about to be Disrupted.” Inc., September 11, 2017. [https://www.inc.com/soren-kaplan/the-business-consulting-industry-is-booming-and-it.html].
Olivieri, B. (2020, March). Management Consultants in the UK. Retrieved from IBISWorld database.
“Salesforce.” Capgemini. [Https://www.capgemini.com/ca-en/partner/salesforce/].
“Who We Are.” Domo. [https://www.domo.com/company].