Business model

By Fiona Czerniawska.

In 1610, after months of painstaking work grinding his own lens, Galileo Galilei finally held his new telescope up to the night sky. What he saw astonished him: instead of a few hundred stars, he could see thousands, even millions.

The consulting “universe” has long been populated by a small number of large “planets”–strategy, technology, operational improvement, and so on–but if you were to carry out an equivalent of Galileo’s exercise in today’s market, then you’d see something that looks more like the Milky Way than a simple solar system.

The consulting market is fragmenting. Centrifugal forces are breaking up our familiar planets, based on the precise expertise required, on a changing sense of what a “reasonable” price is, and on a new generation of clients who know that the way they want to buy from consulting firms isn’t necessarily how the firm wants to sell or deliver to them.

By Fiona Czerniawska.

Consulting around business and digital transformation markets accounts for around a sixth of all consulting in the world today, fuelled by clients’ deep-rooted desire for fundamental change and technology that’s making new things possible. At the same time, we hear senior executives being increasingly concerned about the need to deliver concrete results. “Transformation is all very well in theory,” they tell us, “but we want more proof about what it can deliver in practice.

None of this is surprising: Every “new” consulting service passes through a stage in which consultants need to make good on their glorious promises, and the failure to do so heralds decline and eventual extinction. As a service, digital transformation has technology on its side: There’s plenty of evidence of tangible change all around us, but the challenge for consulting firms is to demonstrate whether these changes have translated into the substantial increases in business performance that organisations are looking for.

By Alison Huntington.

You don’t need me to tell you that digital transformation is big. It’s already a massive market ($44bn by our latest estimates), it’s growing rapidly, and it’s right at the top of the corporate agenda. What’s more, by being multidisciplinary by nature, and requiring a breadth of consulting services to be truly transformational, it’s particularly big news for big firms. Which, if anything, makes it even bigger.

But what does that mean for mid-sized strategy firms? Several barriers to these sort of firms playing in this space spring up, at least in theory: They’re not big enough to have the global reach many clients require; their breadth of services is unlikely to be as wide as the biggest firms; and they may simply not have enough people to deploy, particularly when it comes to turning strategies into action.