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What are some major trends in the management consulting marketplace?
Hello there! Thank you for your question on the major trends in the management consulting marketplace. The short answer is that customer demands and expectations are creating a more competitive market and the need for new innovative business models. Below you will find a deep dive of my findings.
METHODOLOGY
I began by familiarizing myself with the management consulting marketplace. Next, I conducted a comprehensive search through corporate websites and industry reports for any relevant information. I endeavored to find insights from medium to large-sized companies, as such no findings from small sized companies were compiled. I looked into trusted media sites to identify most prominent trends and find opinions from leading industry professional.
FINDINGS
For your ease of reading, I will break down my findings into sub-headings and analyze them accordingly. Any additional notable insights I found will be detailed in the most relevant section.
TRENDS
In the management consulting industry the need for new business is a high priority. There is rising concern from firms of all sizes, the struggle to find new clients is likely to be the determining factor for many firms. Due to the increasingly global marketplace competition between firms is on the rise. The urgency in recruiting good and reliable employees has increased too, firms may find themselves fighting to acquire the best candidates. News ideas and innovations are more important than ever as to keep up with the high level of competition. Having determined all of the pressures in the industry, the ability to take a strategic approach to the problem is a necessity. Using resources and time efficiently plays a major part in this.
Technology in the industry is on the rise. Artificial intelligence and machine learning are currently being integrated into the industry. These technologies allow for the more efficient use of employee time and increased productivity. The technology is quite sophisticated, it is reported that behavior patterns will be detected and the corresponding action implemented all independently of human intervention.
NEW WAYS OF WORKING
There is a growing division of the market into two increasingly distinct sections: one one side a low-cost, commoditised part, and on the other a high-value, more classic management consulting part. Consulting companies are advised to develop comprehensive digital strategies. Reorganizing of business and operating models is a necessary factor to achieving this. Recruiting a diverse workforce is described as a vital priority for development, as needs and demands grow the skill set of the workforce must also grow. Technical work will become commoditized and margins will fall. This allows for a higher value of comprehensive expertise in consultants.
Freelance and network-based models are becoming more prominent in the industry. An influx of knowledgeable buyers in the market is pushing traditional consulting firms to explore new business models. Focusing on more collaboration in the market is also vital to keeping up with the current trends.
CLIENT NEEDS
The increase in knowledgeable buyers can be attributed to clients building their own corporate strategy teams. These teams typically boast a staff of former consultants, consequentially forcing a widening of the market to meet the needs of smart buyers.
Value for money is demanded by clients. Clients will now hold out on making a commitment until the value of the discussions and service are apparent. General advice has a much lower value. There is also a rise in specific consultant needs, as clients are clear and strong-willed on what exactly what it is they want in their consultant. Most clients would prefer an older consultant where expertise and value are clear to see.
Client demands can often be large, across many fields of expertise and with short deadlines. This has created a need for collaboration between firms to work one project together. Moreover, contracts are preferred to be short and project specific as the needs of the client vary so much from project to project.
NEW VALUE PROPOSITIONS
One quotation found can eloquently summarize this area: "Companies will focus on operations or plans that will increase their competitive advantage and add value to them. At the top of the list of hot trends in 2017, the focus of companies is on employee engagement and customer satisfaction, the concern of future cyber-attacks and the negative impact for the companies, and the direction of companies over the next two years towards expansion for growth instead of cutting costs. Furthermore, there is a general inclination towards the development of IT technology, tools, and data analytics that could help the organizations retain their positions in their industries, make the best fact- based decisions, and grow."
The specific areas can be defined:
CHANGES IN CLIENT RELATIONSHIP
The changes in client relationship and consulting firms responsibilities can be depicted by the fact that many firms are choosing to re-brand. Many firms are reported to be dropping the words "consulting" and "services" from their respective company names in an effort to meet client expectations. Companies are even changing up the business attire regulations to accommodate for a more relaxed and approachable image to clients.
The client to consultant relationship can be defined: "the best consultants understand that the client is not one individual, but many people within the organization."
Good relationships are currently built on an individual level. Two factors are important: the cognitive (How good is the consultant? Do they have a successful history? How experienced are they?), and the emotional (Do I trust this consultant to prioritize my needs? Am I being heard?). In an effort to appease clients many firms will switch out a consultant with another to better meet the client's expectations and ultimately build a successful working relationship.
CONCLUSION
To summarize, I have found detailed information on general market trends, new ways of working, client needs, new value propositions, and changes in the client to consultant relationship. The most notable insight is a need for firms to become more flexible, be it to appease client demands, to keep up with the global competitive market, or to develop a more diverse workforce capable of satisfying large requests.
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