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16/03/2016 Back

Quo vadis consulting? The business with new technologies

Management consulting in the age of technology

Demand for consulting is growing, but is also changing rapidly. The consulting market is at a stage where management consulting without technology is hardly thinkable anymore. Today's clients are increasingly focused on the strategic use of new technologies to take advantage of digital opportunities in their respective markets. These changes demand a different consulting engagement and delivery model. Consulting companies respond to the need for digital transformation with new services moving away from the traditional project-based model of the consulting business. This translates into developing consulting approaches that bring rapid innovation and insights. Solutions linking consulting & technologies evolve mainly in the following areas: 

  • Data/Analytics
  • Platforms
  • (Process) Automation
  • Marketing/Advertising & Design
  • Cyber Security, IoT, Cloud & Co.

The business with data

Recent years have seen companies seek ways to leverage huge amounts of information and data for actionable insights and intelligent decisions to gain competitive advantage. The "business" with data exceptionally revives the consulting market. The rapidly changing business environment has called for technologies that are effectively able to transform large amounts of data into useful outputs and decision bases, even with sometimes unclear data requirements: Consulting firm Bain & Company has struck an alliance with CrunchBase, a platform dubbed the Wikipedia for information on corporates and small businesses around the world. The partnership focuses on providing organizations with state of the art investment insights, in particular in the digital domain, through the combination of CrunchBase's wide array of data with Bain’s analytical rigor. Infosys, one of India’s largest IT service providers, partners with Waterline Data in USD 4 million deal to provide its customers access to a wide range of tools to automate the data discovery process.  McKinsey expands its "data-competence" and combines strategy, analytics and design capabilities through the acquisition of Quantum Black Visual Analytics, as it attempts to build the firm for an anticipated shift in how companies do business and to meet the increasing demand for data analysis and data visualization of its customers.

The launch of Platform Services

The development of platform solutions is an additional opportunity to enrich consulting services.  Platform technologies establish new business models, allowing customers to focus on their core business or to increase profitability. Platform solutions handle the management of operational tasks for customers resulting in better, faster or more cost-efficient processes. The “archetypes” can be found in various start-ups which offer new and sometimes disruptive products and services based on innovative technology solutions (e.g. Uber, Airbnb, etc.):  Boston Consulting Group (BCG) launched a web-based marketplace, xChange, to facilitate exchanges of idle equipment between ocean carriers, container leasing companies, intermodal operators, and other logistics companies in order to effectively and environmentally reduce costs and emissions for shipping companies. Mercer, a global human resource consulting company, invests in Pymetrics, a game-based career platform reinventing the recruiting process by using big data, neuroscience and machine learning to identify optimal career paths for job seekers and ideal employees for organizations (“talent matching”). Barkawi, a boutique consultancy focused on operational excellence, provides its customers a global online trading portal as a virtual marketplace for industrial overstocks that brings sellers and buyers of valuable raw materials and expensive equipment together. 

Process optimization through software

Digitization transforms industries, business models and companies radically and forces consulting clients to rethink their strategies, structures and processes. Software solutions for efficient and structured processing of daily business tasks aim to automate process handling without manual intervention and establish ways in conjunction with consulting services to elevate the value consulting firms offer to clients by providing efficient solutions for analyzing and optimizing core and sub-processes across the company’s value chain.
Examples of ways consulting companies build or supplement their software expertise are diverse: Accenture built an alliance with Workday to offer to its clients services in the field of cloud-based human resource (HR), CapGemini has recently acquired Salesforce provider onio in Germany to augment its capabilities in providing consulting and deployment of cloud-based CRM and digital marketing solutions, and Hitachi Consulting and SAP offer a complete cloud-based integration solution for the IT system needs of their clients.

«Worlds of #creative, #consulting, and #tech are blending»

This tweet announced DeloitteDigital’s acquisition of sfheat and illustrates what is currently happening in (digital) marketing consulting: The merge of management consulting, creative solutions and technology to bridge the assumed gaps of each single advisory and tech practices: It’s been said that although management consulting firms dominate the digital transformation, they are not good enough in making creative marketing campaigns.  On the other hand, advertising agencies don’t completely understand their clients’ business models and business realities to ensure the “big picture” of organizational changes needed for digital transformation programs. IBM’s acquisition of Resource / Ammirati, a leading US digital marketing and creative agency, Deloitte’s acquisition of creative agency Heat, or the merger of EY and North Point Digital are evidence of the attempts of consulting companies as the demand for holistic technology, consulting and creative solutions in response to dynamic market changes takes hold.

The new (technology) buzzwords

Consulting clients probably have only begun to scratch the surface of what is possible with new internet technologies. Even though some buzzwords continue their run as some of the most popular technology trends, it is still early days and it will take time until they reach market maturity and widespread adoption. Some of these trends or related buzzwords refer to artificial intelligence, virtual reality, 3-D printing or IoT (Internet of Things). Nevertheless, it is common that the consulting market picks up such topics at an early stage and provides some ideas (even though not yet concrete solutions) for potential customers and that new consulting topics arise based on technology-driven changes of business models and processes. For the Big Four, with their traditional focus on risk and regulatory consulting, cybersecurity is having a significant impact on risk consulting, with some firms reporting substantial growth in this sub-service. Challenges such as Internet of Things, Industry 4.0 or Service 4.0 are still in their early days. Nonetheless, developments in the consulting market can already be observed anticipating the future course of consulting activities in this field: Accenture, the global technology and management consulting firm, has acquired Climation, a firm that specializes in using “Internet of Things” technology and strategies to track products and equipment, and launched a specialized practice within its financial services group to help institutions implement blockchain technology, KPMG acquires Australian FinTech company Markets IT.

And «what about the customer»?

Today consulting clients are confronted with an almost overwhelming number of options to invest in smart technologies. Not for all these options there are already clearly-defined solutions yet. Companies depend on external know-how when it comes to the evaluation of the value, risks and impacts of new digital trends. They are looking for consultants which meet two essential requirements: First, the consultants must be specialists in specific technologies and solutions. Second the consultants have to understand their customers’ businesses in such a way to be able to derive and pinpoint the necessary economic, strategic, organization and process implications of any new “technological buzzword”.