Management consultants have not always been early adopters of technology. Even as they preached the benefits of digital transformation to their clients, many firms failed to apply that philosophy to their own businesses—choosing instead to cling to their post-it notes and brown papers.
But that’s starting to change. As clients have become more mature buyers of digital services, they have started to hold consultants to a higher standard. It’s difficult to be taken seriously these days unless you can show evidence that your firm has addressed the question of how your services can be enhanced through the application of technology.
At the same time, consultants are under increased pressure to do more with less. Firms are at constant risk of being undercut on price by freelancers and agencies—now more than ever, as clients tighten their purse strings in response to the current crisis. Technology also has an important role to play in keeping costs under control.
For all of these reasons, consulting firms have started to deploy specialist software to aid in the delivery of more and more of their client projects. It is now time we started talking about “Project Tech” as a discrete product category, analogous to more established fields such as Legal Tech or Insurtech.
In a recent study we conducted of mid-sized consulting firms (under 2,000 employees), 76 per cent told us that specialist products now play a critical role in all or most of the work that they do—compared with only 5 per cent who reported that their firm had made no efforts to adopt Project Tech.
When asked for specific examples of Project Tech deployed by their organisation, respondents most often cited project management products — tools like Trello, Basecamp, and JIRA. Fifty-seven per cent of firms now use these tools in over half of their client engagements. Other products in the wider constellation of Project Tech include data visualisation tools, client-facing project dashboards, activity trackers, and automated surveys and data collection tools.
Only a third of firms build their own proprietary Project Tech — and even they will typically need to supplement their home-grown products with external ones. There’s a new market emerging here, and vendors of many different stripes are rushing to fill it.
Today, this emerging market is still relatively fragmented. But it is easy to imagine a situation in which a single player with the right suite of products manages to dominate — becoming, in other words, the “Amazon of consulting”.
Just as it’s now impossible to do online retail without in some way touching Amazon’s ecosystem of products and services, it could soon become difficult to operate a consulting firm that doesn’t license the same gold-standard tech that everyone else in the industry is using.
Some of the larger firms seem to be making an explicit play for this space — with stories that leading strategy houses have developed their own products in-house and now license them to smaller boutiques. The McKinseys and BCGs of the world, for example, may decide the best way to safeguard their future is to make themselves look a lot more like platform businesses.
Our data suggests, however, that if anyone succeeds in “Amazon-ing” the consulting industry, it won’t be one of today’s market leaders. A relatively large proportion of firms that we studied said that they would never be comfortable licensing Project Tech from their competitors.
But there are a number of start-ups and newer tech companies out there who may have a better shot at one day becoming the one-stop shop for firms’ technology needs. It’s also not out of the question that one of the tech giants will eventually release their own suite of consulting-focused products. Ironically, the “Amazon of consulting” might just turn out to be Amazon itself.
Regardless of who wins this race, one thing is clear: Project Tech is here to stay. Consulting firms look set to continue expanding their technology and asset bases — and that can only be a good thing for today’s cost-and value-conscious clients.
Fergus Blair is a producer of thought leadership for Source Global Research
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