The consulting business model under challenge? One can observe a series of business model innovations that could reshape the way consulting firms engage with clients in the future. For more than 100 years, management consulting has been based on a project-based operating model: Consulting firms deploy human capital at client organizations sending smart consultants into organizations for a finite period of time and asking them to recommend solutions for the most difficult problems confronting their clients.
At traditional strategy-consulting firms, the share of work that is classic strategy has been steadily decreasing, competition among consulting firms is significantly increasing, consulting fees have dropped in the last 5 years by 20%. What's next? The forces that are starting to reshape the world of consulting are based on "modularization". New competitors with new business models arrive which offer solutions for parts of the consulting value chain - more cost efficient, faster and more flexible - allowing clients to disaggregate consulting services, reducing their reliance on solution-shop providers. Clients become savvy about assessing the jobs they need done and funnel work to the firms most appropriate for those jobs.
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