The Future of Consulting (Consulting 4.0) and How Disruption Can Benefit Clients & Providers Alike?
The disruption in the Consulting value chain can benefit clients in many ways. Due to the digital transformation affecting modern industries, we see disruption unfolding in major areas such as Marketing & Sales; Knowledge; Data Analysis; Methodologies & Solutions; Services and Resources. Clients today have an abundance of opportunities to source talent, expertise, and to use offerings tailored to their specific needs.
Providing and receiving feedback is key to create dynamic and healthy relationships.
Understanding disruptions can help you take advantage of the powerful new trends and position your company to optimize for the trends that will shape the future.
If we take a quick look back, we will see that the Consulting industry is pretty resilient and adaptable. It started with a value proposition around work optimization, and then shifted swiftly to more value and a focus on strategy.
Since then, consulting firms have shown a high capacity in embracing the top trends in management. They developed specific offerings to help their clients implement new management concepts such as: total quality, globalization, voice of the customer, design to X, value pricing, lean six sigma, and succession planning.
Today is all about digital-
Pretty much every Consulting firm today has incorporated a digital layer in its offering.
The recipe for success until now was rather simple. Consultants had to accumulate experience, gather knowledge and data, organize information, process information at light speed, and organize findings into superior looking reports. Sounds simple? Let’s see how digital seems to be reshuffling the cards.
The Consulting Value chain is constantly evolving, in all its sectors, from Marketing & Sales, to Knowledge and expertise, Data and Data analytics capability, Management tools & Methodology, Proliferated Talent pools, and much more.
It’s important to mention that Clients are evolving simultaneously as well, expanding their knowledge and expertise, access to Data, and are relying on in-house Consultants more than before.
In that line of thought, the Consultants’ role is shifting too.
The Consultant added value becomes their capacity to frame the problem and analyze the data provided by the expert.
Companies such as Evalueserve are offering outsourced knowledge services to management consultancies such as knowledge management, business intelligence, market-specific or clients insights to support business development. Until recently most companies had none or very scarce resources dedicated to data analytics.
With all the hype around artificial Artificial Intelligence, Big data and Machine learning, that situation is about to change. Major companies are building teams of data scientists to take advantage of their data and even for some of them to create new business models..
Now let’s take a look at the future of Consulting-
We are now entering the era of Consulting 4.0 – a term borrowed from the industrial revolutions’ stages – industry 1.0 to industry 4.0.
New technological developments, or digitalization to be more exact, have affected the Consulting category as well.
The fundamental business model based on solving problems, whether developing a new strategy, cost-cutting solutions, or implementation of new technologies, guaranteed the Consulting industry’s success.
But in the aftermath of the 2008 economic downturn, things have dramatically changed.
Declining revenues, growing competition, and market consolidation are among the main factors that make Consulting firms worry.
However, a better perspective to look at this, is to frame it as the beginning of a new era – Consulting 4.0
The consulting industry has to reshape itself with new business models, new growth areas, and innovative products and services to be created. We can confidently say that Digital transformation is at the core of Consulting 4.0
Consulting 4.0 – Main Characteristics:
- Consulting 4.0 is more than the digitalization of the industry. It includes a fundamental change in almost all sectors.
- Some of the factors behind it include volatility and uncertainty, as the global economic environment is constantly changing, and to a big extend has created to the disruptive forces we are witnessing.
- Clients-Consultants relationship has changed – a complex and uncertain global economic environment created many new challenges for Client organizations.
- Clients today have more information – with the launch of many new platforms and information services in the past ten years, clients have access to quality and quantity of information, giving them a strong preference for which consultants they want to hire.
- The demand for Consulting services has changed – and Clients today are less dependent on Consultants. They are either doing in-house consulting or prefer very niche and specific services rather than general management Consulting services.
- Low cost and high-end expertise services – as Client perceptions evolve, they are reshaping the consulting industry, driving it into two distinct directions – Low-cost consulting fixing problems and discovering solutions. And on the other end of the spectrum – high-end, specific consulting solutions to problems that Clients don’t have the confidence or expertise for.
How to be a winner in this new economic domain?
Both Clients and Consultants need to understand the new dynamics and utilize the latest developments, while building their relationship on transparency and mutual interest.
The consulting industry’s market leaders – strategy consultants, IT consultants and system integrators or the Big Four – have the chance to position themselves as multi-specialists, sometimes by eagerly acquiring smaller specialist consulting firms.
Smaller consulting companies on their own too, with their deep specialist know-how and innovative business models, could be well-positioned to make a remarkable amount of work in nearly all sectors as clients realize the possibilities for wide-ranging change, major transformation, and are rethinking their business models.
So who is the right Consultant for your project?
The one who is able to navigate through this complex consulting landscape, and deliver the best solutions and desired outcomes.
Let’s discuss your projects in more detail, and we can offer you an expert perspective on how to move forward.