The Future of Consulting - An insight from a mere 21 years of observation

After starting my career within the engineering industry (Hawker Siddeley), completing a full apprenticeship and designing physical things that require thoughtful design and realisation in steel, I migrated to ITO/BPO consultancy in 1994 and haven't looked back. I've been fortunate enough to work with some of the top firms such as IBM, Arthur Andersen, Deloitte, CSC, and Oracle. I've also enjoyed working with Indian pure-play companies such as HCL and boutique consultancies such as Sysao and Compel. It's a varied list to say the least. Some enter consulting as graduates, some enter as accountants but some have an engineering background which does deliver a slightly different perspective that has (I believe) served me well.
At the start of my career there were green screen terminals, the first PC’s, the first laptops and then we moved into the portable age with mobile devices, smart phones and I’m now a big fan of devices such as Chromebooks as the future of personal computing itself moves into a cloud environment entirely. In some respects we have moved full-circle, in others there are new challenges that need further scrutiny. But throughout, I’m a digital tourist where my children are very much digital natives. For the current generation “everything is available all of the time”. As this generation become consumers and leaders in industry, things will change. Unfortunately, some of them already have!

My roles have covered just about all the tasks you can undertake from being a DBA, technical developer, enterprise applications implementation consultant, project manager, programme manager, service transition manager, steering committee board member, solution architect, solution director, CxO advisory, sales leader and managing partner for an entire stream. I have slowly morphed from designing and implementing physical things, to designing and implementing digital things. But what is constant, is that there is an outcome and an answer to a tangible problem that can be articulated. This we will come back to.
So on to the subject of this tome. With over 21 years of experience I thought it would be interesting to discuss:

• What has changed in the IT consulting industry?
• What has remained constant?
• What are the challenges?

And finally, so this piece doesn't turn into just a statement of the problem, a few suggestions for practical answers to address the points made. - What the future of IT consultancy looks like?

What has changed in the IT consulting industry?

Quite simply, there are more accessible ideas out there to exploit. It's easier to get your new solution or service to the market. It's easier to check what others are thinking and doing to spark new ideas based on previous ideas. The barriers to entry are much lower. Your customers are better informed. Within five minutes you can obtain a précis on the most complicated subject there is. You can quickly copy and paste a UNIX command to update your PC that would have taken you days to do on your own. You can easily work out the next steps to get deeper knowledge and who the experts are in that field. Before the digital age, it was very difficult to do that.

Your customer will look for the company that has a positive response to the question or problem they are posing. They are no longer as impressed with the big brand and the history behind the brand. They want it now and they want tangible benefits quicker still.
The IT titans traditionally grew by attracting the top talent, and as a customer you knew that if you wanted an IT expert, you would certainly find the right person at a company such as HP or IBM. That's not as easy today. The larger firms are struggling to recruit and retain talent. Where once they had unique services, products and solutions, these are rapidly becoming commodities. The titans have also grown by acquisition, have large property portfolios, private jets, significant overheads and a need to maintain a team ready to mobilise at relatively short-notice. This drives a certain quarterly heartbeat focus that isn't always helpful to its customers. Large companies want large deals, customers to handover large capital expenditure and long-term commitment. Modern enterprises want the opposite, they want a short commitment, monthly rental models and the ability to switch services quickly with minimal or no business impact.

Most international brands have also gone as far as they can with the old models. They have all taken full advantage of labour arbitrage. In established offshore locations, labour rates are rising rapidly and the same effect will be seen in emerging offshore locations such as the Philippines and China.
Traditional companies have checks, controls and gates to control spend and these are not supporting the demand for 'I want it tomorrow'. Products and services take time to develop. There are many examples where, by the time your product finally gets approval/sign-off, the market has moved on and there is no opportunity to recoup your investment. The life-cycle for a product or service has shortened dramatically as there always seems to be a better mousetrap.

The industrial age delivered economies of scale which are still relevant, but individuals are looking for a more personalised experience in order to connect them to the purchase decision. It used to be a mantra that you need to deliver the right product at the right time, but now we need to add to that list "the right place and the right price" in real-time. For that, you need lots of data and the right engines to deliver intelligence on that data.

What has remained constant?

It’s a bit of a cliché, but change is the one constant. There have been accusations that the IT industry in particular, recycles ideas to keep the revenue stream flowing:

10 - Outsource everything
20 - Insource everything
30 - GOTO 10.

There are however other constants such as the need to evolve, to invest in research and development and to keep your human resources relevant by training them, not rarely, but as part of their day-to-day activities.
Another constant is the complexity of dealing in a global market. We aren’t there yet in having a solution viable for all markets so some localization will always be required.

What are the challenges?

The main observation I have, is the almost complete abandonment of trusted brands. It wasn't that long ago that companies were valuing themselves on the strength of their brand. This is the case with wider industry and it's the case in your own personal purchase patterns.

Let's take a look at some examples. Look at the way you buy a book, music, films. In a very short timeframe all the old brands seem to have fallen away to be replaced by totally new names that have a very strong foothold. Where the HMV's of this world fell during the rise of iTunes, so iTunes fell in the path of Spotify. Blockbuster has gone and we now have Netflix and Amazon Prime. Did Sky see the threat from internet content providers and has it done enough to keep up?

In the world of automotive production, nobody could have foretold that Elon Musk after turning the payments world on its head with PayPal, would jump the queue with the Tesla model S and set the standard for battery powered cars and home energy storage. How did a small operation like Tesla get a jump on Mercedes, BMW and likes of Ford and General Motors? Mr Musk now has his sights on the space delivery industry and Hyperloop may well be the answer for city to city transport.

In the world of IT, the titans of that world such as HP and IBM just could not have foreseen that a little start up online book vendor would take them on in terms of IT infrastructure, yet Amazon Web Services is the first on the list of cloud services providers when looking at an IAAS model. These larger brands are seen as being old-fashioned, lethargic and bureaucratic. Just declaring you embrace 'agile' does not make you agile.
Your past success is only relevant to your last sale. Since then, you can guarantee some of the rules have changed, and it's your job to spot this. If you don’t, you know someone else will.

Businesses have also moved much faster than the countries within which they operate. A global company has to maintain a relative state of stability across diverse culture and geographies. You may have a global reach but you still need to cater for local tastes and requirements. Can one company do it all? Is it better to collaborate with smaller companies or an affiliation of individuals?

What the future of consultancy look like?

One thing is for certain, and that is that the methods and course to follow will not benefit from being written down in a dusty book.
There is much to be gained by drawing on the collective internet-age community, predominantly the digital natives, those born into this age. The rate of change and improvement in terms of 'how to do it right' and 'how to adopt new ideas and technology to provide benefits" will grow exponentially as different people from different walks of life make comment and suggest improvements in areas they previously had no interest or exposure. Solutions developed for a particular industry all of a sudden answer a problem in another industry where no link was previously spotted. Doctors can help solve engineering problems, biologists may help engineers. An artist could help solve a mathematical problem. People have more than one skill and we need to tap into that.

Summary

The consulting industry will need to train its people in new ways. We will always need specialists in the deep areas, but we do need free-thinkers who stay up to speed with the world around them. You will know you have the right advisor if they demonstrate the following behaviours and language:

1. They don't obsess with the technical and focus on the benefits and outcomes
2. They demonstrate exposure across multiple disciplines and industries to foster collaboration that could show links where none were seen before
3. They keep their eye on and hopefully fund the start-ups and incubators for new ideas to weave into the solution to deliver differentiation and a competitive advantage
4. They encourage collaboration and suggest ideas such as creating a wiki style 'how-to' portal for the business that is policed and kept constant by your employees and extended community to keep up with the change as it happens. You can't possibly do this centrally, so loosely define the parameters and let the community keep you current. This will help in training the organisation to easily transition once your SI or advisors have completed their assignment and moved on
5. They define processes and a method to keep your people happy and get them involved in the operation and process of transition and change
6. They encourage your staff to move between departments to gain valuable insight that they can take back into their section. This will further encourage organisational acceptance and future collaboration.

There are also a number of disciplines you need to get used to in the digital age:

1. Challenge your mission statement. Is it still relevant? If not, rewrite it
2. Evaluate and re-evaluate your strategy to realise your mission statement
3. Plan thoroughly and change decisively! - (The art of War by Sun Tsu) Of course you need a plan but you need to keep it current and tweak it to keep it relevant. Move - Stop - Evaluate - Move again!
4. Work on articulation - Are you the best at encapsulating the problem or even observing your organization from the umpires chair? If not, get someone in who can do that
5. Know where you are on the curve. A course of action, solution or service may well be fun and lucrative but its days in the sun may be numbered, so what's next? Keep a few ideas boiling on the back burners. You need to keep moving to keep up.
6. Try new avenues to solve your problems. Post your problems to a wider set of people (a solver community) and use a competition to see what comes back. You may be surprised at the result and the left-of-field thinking that emerges. These could be a mixture of industry and non-industry people or retired individuals that may take up the challenge just for fun
7. Use common industry benchmarks provided by the likes of APQC to define your target operating model and only retain those functions that give you a differentiation. Outsource the rest. There are other organisations that will do it better and cheaper than you
8. Share your great ideas and get used to collaborating, even with your direct competitors. You may have a joint strength you can exploit in a joint venture
9. Create the right forums for innovation such as quarterly 'dragon's den' style meeting where representatives across your entire operation can see the ‘new’ for themselves
10. Outsource those areas of your business that don't give you a competitive advantage. Some of these may be the crown jewels but look at them very hard and make the right choice for the good of the overall operation. Sentimentality won't win you orders
11. Be your own disruptor - Why wait for someone else to steal your thunder? Your people have the right ideas so why not ask them? Set up gain-share schemes for your employees so they get a piece of the pie. Even small changes to the way you operate as suggested by your employees can add up to large cost savings and operational improvement.

Finally

Planning is very important. If you can prepare the ground before you start and check your kit bag before you set off, you will have a much better start and a much improved journey.
Before you start your journey and engage your new consulting partner/SI, do as much of the time intensive activities upfront. I would suggest these are:

1. Make sure you can adequately describe your business problem in terms of what you need to achieve and what the ideal outcome should be. Is it a single problem? Consider a root cause analysis approach to explore the issues completely
2. Use language that is not technical. You need to engage a wide audience across multiple disciplines, so keep it simple
3. Understand who in your business will benefit and communicate this before you engage. It does not look good if you are seen to justify a major project after you have mobilised and committed the team and budget
4. Design the process for how you will monitor and measure the benefits you listed in your business case/justification. What will success look and feel like?
5. Make sure your governance layer is right. Allow a single individual to take responsibility and tie their remuneration with the success of the venture
6. Commit your business completely and back-fill the best staff to assure success. Half-hearted will not deliver!
7. Learn from past failure and fix the issues before you start the next programme
8. Get better at recording your intellectual capital. Many organizations do not fully understand their own staff and capabilities. Why employ an outsider if you already have the skills for critical areas of your programme. If you have a good idea of your capability, it will help you quantify the external help you need and speed up the mobilisation phase
9. Learn from others - As stated, it's much easier to find information in the digital age. What have other organizations done in this situation?

I trust that you find these thoughts and observations useful. Consulting has always been fluid but supported by solid methods and frameworks. These are still useful, but as always, flexibility and innovation needs to be present at all stages of the engagement. The world moves on, and we all need to change our thinking to cope with change that seems to be accelerating exponentially. The world is changing, ignoring it will not make it go away. The definition of insanity is doing the same thing over and over again, but expecting different results!

All Rights Reserved - Simon Pass - www.irwellsolutions.co.uk