Business Consulting firms play a vital role in helping businesses. The role could be as different and wide ranging as strategy to as specific as growth consulting.
In this area of digitised, global, rapidly changing business world where the next disruption is round the corner it puts may challenges on the consulting firms also to keep up to speed to be able to remain valuable to its clients.
In this article, let’s have a quick look at the top challenges (business or otherwise) being faced by the consulting industry all over the world.
- Increased Competition of a different kind:
Please note the word, of a different kind. What has happened in the recent past is that too many disruptions are happening in the world of business e.g. technologies are emerging which are commoditizing the regular routine consulting business, information is available in public domain almost free or at a nominal cost to anyone who wants or needs it. Thus one of the key pillars or differentiators of the big firms is disappearing rapidly.
- Changes in the buying behaviour of purchasers:
Buyers are no longer buying services from consulting companies due to their long standing reputation. Earlier “Brand Value” took a long time to create and go down. Not in the modern world of business. On-line channels have changed that completely. A new company with excellent on-line presence can rapidly reach a stage of competing with a bigger company and nibble away its niche business.
The other change in this area is that buyers are asking for more and more result driven consulting and result driven compensation models. Also in this agile world, people are looking for faster delivery of services.
- Need for new skills:
In this rapidly changing world of business globalisation, new technologies etc. etc. it is very very tough to keep reskilling your people. Training keeps them away from potentially billable hours, hiring people with new skills makes them unskilled within 3-4 years (because the requirements change so fast). It is a tough choice with somehow does not seem to have a clear answer.
The rapid speed of disruptive innovations and/or new technologies is outpacing organizations ability to manage the changes appropriately while running and growing the organization
- The uniqueness is gone:
Two decades ago big four had unique knowledge and best practices advice which made their offering invaluable. Now, much of this information is readily available to those who are willing to research. Also, the alumni of Tier 1 consulting companies are now spread across the businesses in leadership roles across everywhere thus making their capacities available across the industry.
- New Competition:
Boutique and specialists firms are not the only form of completion now. The increase in independent consultants operating is also providing major competition to the big players. Also their access to the market via on-line portals (which advertise requirements for consulting) have increased their ability to compete with the top ties firms.
In conclusion:
While I could go on about the changes and the impact on the consulting industry for many more pages but here is the fundamental truth.
Every industry, from time to time, due to changes in the various external factors undergoes basic changes in its structure via consolidation, segmentation etc. For many decades consulting industry was felt to be immune from the upheaval going in the rest of the business.
No more now.
Consulting industry’s time to change has now come. Changes via merger/Acquisitions, consolidation, failures due to inability to keep up with the changing times etc. are going to soon change the look and feel of consulting.
How long before it happens? Well, anybody’s guess is as good as mine.
My guess….in another 5-10 years, the consulting landscape would have changed so much that what we see today will be material for the Business History books…
Enjoy the ride till then.
About the Author
Manoj holds a Bachelor of Technology from the Indian Institute of Technology in Kanpur and PGDM from the Indian Institute of Management in Lucknow. He has over 34 years of experience in the IT industry. A large part of his professional experience has been in leadership positions, rendering Technical and Strategic Leadership to software organizations at the level of Managing Partner, Member of the Board etc. During his career he has lived and worked in UK, Europe, US and India. He is an avid writer having written for newspapers and publications like Economic Times, Business Standard etc. Manoj also has been involved in Academics for quite some time. As a guest faculty he has taught in IIM, IIT etc. and has been a member of the Academic Advisory Board of many institutes. At present he is the CEO of TMTC, a leading business consulting company.
