William Johnson, Managing Director of PDN, shares some of the key trends the firm sees affecting the consulting marketing in 2014 and beyond.
The consulting market — cautiously turning a corner while preparing for bumps
Multiple forecasts and CEO sentiment point to 2014 being the year where the downturn slows or stops and a norm of marginal growth begins to return. At the same time, we know that ‘things keep happening’ in terms of political, environmental and technological disruption. What are the best strategies to handle, as PwC terms it, ‘stable instability’? How does ‘stable instability’ impact recruitment, talent development and organisational structure?
Operations consultancy — the new battleground?
We know that operations consultancy is one of the strongest sectors of consultancy. At the same time, pure strategy consulting is still aspirational and a driver of brand value. How do consultancies maintain brand credibility whilst demonstrating capability? How to avoid margin erosion when moving into the operations area? What are the key differentiators from the client side?
The global-local paradox — effective strategies for management and knowledge exchange
An ever-increasing amount of consultancy has an international element to it. At the same time a PwC survey states that CEOs are focusing on organic growth. How do global firms manage local presence? How best to manage local acquisitions — absorption, integration, or independence? Additionally, we’re now beginning to see ideas transferring from the developing to developed world. How can global consultancies best leverage that knowledge to drive growth and innovation at home?
The IT strategy paradox
There is clearly a ‘race to the middle’, with the Big 4, strategy consultancies and IT firms all trying to fight for a piece of the operations consulting pie. IT firms are therefore trying to reconfigure and rebrand themselves further up the value chain but don’t really appear to be winning the battle. We also know that IT is increasingly a strategic issue rather than an operational one and that IT is still a large and growing strand of consultancy. Should the tiger change its stripes (as it seems some are trying to do) or are there other strategies available? For example:
- Be ‘out and proud’. IT consultancies are just that: experts in IT. The key with this strategy is getting IT on to the strategic agenda.
- Focus on risk management. IT is the biggest predictable disruptor in the business environment. Given also that risk is an inherent part of today’s environment, might there be an avenue of growth for IT consultancies by focusing on this topic, first in the IT venue, and then expanding in to other risk areas?
The client-consultant relationship — trusted advisor, partner or outsourcer?
The rise of longer term engagements and change in model from providing advice to working on implementation raises questions around what consulting really is and how it adds value. How are the skills needed in the old model different from those needed in the new and how can they be developed? How do firms’ consultants stop ‘going native’? How to balance long term development with the clients’ need for continuity?
The price-value equation
Although everyone, from clients and procurement departments to consultants themselves wants to talk about ‘tangible value’ the reality is that the tool of value-based pricing isn’t used very much. Can value-based pricing be used as a differentiator and what are the best practices for designing such programmes? Is there such as thing as a ‘consulting pre-nup’?
Procurement — the case for poacher turned gamekeeper
Procurement is extremely influential in the selection of consulting vendors but how much do they really know about the consulting industry, providers and the work that consultants do? If procurement were trained a little more like consultants, would both sides benefit from a closer understanding, more accurate matching and increased value all round? What are the key skills that consultants have that procurement would benefit from?