Professional Services embracing digital transformation
While many industries have faced disruption from competitors with new business models, consultancy work has remained relatively immune to disruption. But, according to Harvard Business Review, the same forces that disrupted so many industries including steel and publishing, are now affecting Professional Services such as the consulting industry.
Sophisticated competitors with non-traditional business models that were not accepted in the past by the industry are now gaining traction. While these new entrants do not appear as impressive as major consultancy players like McKinsey, Bain, and Boston Consulting Group, incumbents are beginning to recognise a shift and some are probably feeling a bit vulnerable in the face of growing competition.
Global trends are already highlighting this shift. For instance, 20% of today’s consulting work is pure strategy, which is in stark contrast to three decades ago when it accounted for 60-70% of consulting projects.
The reason for this change is the digitalisation of knowledge and service delivery, the emergence of innovative and disruptive business models (which is changing old paradigms such as the move towards value-based pricing instead of traditional hourly charges), as well as global talent networks, according to SAP’s latest research.
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Technology trends enabling digital transformation
With change comes opportunity so it’s in the best interests of Professional Services firms to build a strategy where technology enhancements are embraced. To transform, firms need to redesign their business models and processes using digital technologies. They need to digitalise their expertise, talent, service execution and customer engagement.
This can be done using:
- Algorithms and machine learning
- Cloud computing
- In-memory computing
Cloud is a popular choice for CIOs, according to the KPMG report. 40% say they believe that it improves availability and resiliency, 38% say it is the best solution available, and 37% say it improves agility and responsiveness.
These figures are interesting since some Professional Services firms are still not convinced by cloud. With 40% of international CIOs looking to the cloud as a best fit solution, the capability of the solution has obviously proven itself.
Disruption - Embracing the inevitable
Firms definitely recognise that disruption is here to stay, but there seems to be uncertainty on how to tackle it.
The KPMG survey shows that 37% of firms say they have an enterprise wide digital business vision / strategy, while 33% say they are working on one. 22% say they do have a strategy but only within business units. 30% of CIO’s say that the primary source of disruption is new innovative products / services and 20% say it’s new forms of customer engagement, while 19% say its new business models.
The abovementioned figures show that many firms are still uncertain about the disruption and are literally scrambling, presenting an opportunity to gain market share. It’s important to realise that disruption takes many forms, so it’s good to keep an eye on the competition, locally and abroad.
Armed with the right digital tools and attitude, Professional Services can prepare for the disruption that is already here. Disruption should not be viewed in a negative light. Often, it opens doors to opportunities that weren’t there before. By recognising that change is inevitable and preparing yourself by employing the right digital solutions, skills and strategies, as well as being agile and innovative, your firm will enjoy all the benefits that disruption has to offer.
By employing the services of an IT consulting firm like Soltius, you will be able to draw on the relevant expertise and experience, equipping your firm to make the right decisions the first time around.