At the beginning of the decade, in 2011 the Adani Group decided to go for a complete business transformation and makeover. For that, it decided to hire consulting firms. The big 4 consulting firms of the world, EY, KPMG, BCG and AT Kearney and many other firms arrived at the game to win the project. Adani took a long time of one year before arriving at a final decision. The infrastructure business was won by Accenture, AT Kearney received the power business and KPMG bagged the port business. Since the beginning of the decade, the competition among the various management consulting firms is rising. It is posing as a challenge to the growing management consulting industry. In India, there are hundreds of management consultancies who are swiped by the rising tide of digitization and the massive expansion of start-ups and freelancing.
The total consulting in India is worth around 12 billion dollars and around 1.2 billion dollars is bagged by the management consulting firms in India. The management consulting industry has grown at a steady rate of 6% in the last 5 years. But now the sector is going to face some major disruptions and unknown challenges. With the ceaseless trending of globalization and the digitization, the management consulting firms face the changing demands of the clients; this scenario is not just limited to the nation, but also across the globe. The competitive global landscape has brought some major changes in the management consulting sector in this decade; let us have a look at them.
Digital Transformation in Management Consulting Firms
The wave of automation, machine learning, Artificial Intelligence (AI), Internet of Things (IoT) etc are impacting directly on the businesses across all the industrial sectors, like healthcare, telecommunications, banking or automotive etc. The industrial sectors are embracing automation for faster and efficient business development, with reduced human intervention. The start-ups are providing tech-enabled efficient services to their clientele, and the large-scale businesses are moving towards AI and machine learning for developing a niche-skilled and agile workforce.
The demands of the clients are changing patterns and the management consulting firms have to adapt to this pattern for better and profitable business. The management consulting firms are engaged in the business of all sectors like transport, logistics, insurance, banking, retail, hospitality, communication etc. In this decade, all the sectors are affected by technological penetration; their mode of work has changed, thus giving rise to a new kind of demand.
The massive expansion of the management consulting industry has positively affected India’s Gross Domestic Product (GDP). It has increased the foreign investment inflows and also boosted large scale employment opportunities for the resources. The firms are applying the technological intervention in maximizing their business growth by giving the best service to their clientele. This decade has witnessed the birth of many new segments like cybersecurity, design thinking etc, and this service based sector can face the tide of digitization by being constantly updated.
Rise of Gig Economy Boosting Management Consulting Firms
In this one decade, the Gig economy has attained immeasurable height due to all the favourable economic conditions and evident growth drivers. The gig economy plays a major role in Re-shaping and building the Future of Work. The gig economies aid the booming of start-ups in India and also across the world. The micro, small and medium-sized enterprises (MSME) are a part of the gig economies where the work is based primarily based on projects. The freelancers and experts make the best on-demand talents who are employed for various short term and long term projects.
The management consulting firms are outsourcing these experts who have in-depth domain-specific knowledge matching the project requirement of the clients. The business organizations can control the cost margin by preferring short term project-based employment to full time and permanent staffing. The management consulting industry is emphasizing on talent acquisition and recognizing the potential of the freelancers and experts.
The gig economy was not in limelight at the beginning of the decade. But by the closing of the decade, the gig economy has taken the centre stage and it will not take a seat back anytime soon. The management consulting firms and the gig economy are boosting each other’s growth. Thus defining a niche skilled and flexible workforce.
Quality over quantity
More importance is given to the quality of work, rather than the hours spent. The business organizations are in need of a more professional and flexible workforce. The management consulting firms are in constant search now of a highly skilled professional who is paid for the quality of work, and not the hour of work solely. The firms are busy satisfying their clients and sometimes this pressure can weigh heavy on the small and medium-size consultancies. But the large ones like Boston Consulting Global and AT Kearney will not be affected due to the clients’ demands.
The qualitative analysis is given preference over the quantitative analysis by the clients. The management consulting sector is working to fulfil the demand with the supply of appropriate resources, as per the projects. At the beginning of the decade, the number of freelancers and consultants were much less, and giant management consulting firms dominated the market like Bain, AT Kearney, BCG, KPMG and EY. But, with the passing years, Internet penetration has hit hard all the sectors of the industry, both product and service-based. In this era of internet, the knowledge and information are democratized and now everyone can access any information via the web. At this juncture, the role of management consulting firms is also changing fast. The online platform is enabling businesses to meet suitable consultants and vice versa. Certain times the role of management consulting firms are often questioned, as published in a report by Harvard Business Review.
In an article in Hindustan Times, the MD of Delhi based SL Consultants (founded in 2009), Lalit Khanna, “Moreover, one of the biggest nightmares the consulting firms have is by the time a consultant prepares a research report or any strategic plan for the client after collecting data, analyzing it, and pilot testing, those trends and issues become outdated and are replaced with the new emerging disruptive forces. Such vulnerabilities affect the revenues of small-scale consulting firms which do not have easy access to Big Data, Data Analytics, Cloud, and other cognitive technologies. However, the consulting giants who are the early adopters of dynamic nextgen technology dominate the market leveraging the relevant insights, automation devices, and scalable data gathering. They are better able to advise clients on the seamless implementation of disruptive technology as they themselves harness the potential.”
Conclusion
The management consulting industry explosion is one of the most prominent phenomena of this decade. The rising gig economy and technology penetration can be deemed as the foremost growth drivers behind the growth of this sector. The people are deviating from traditional permanent jobs and looking for short term project-based employment in recent years. The flourishing of start-ups give a boost to the management consulting sector and it will continue in the upcoming years as well.
In this decade, many things have changed in the management consulting sector. Do you want to know more about the same? Talk to our niche skilled experts now to know the diverse competitive market in greater detail! We at Vedak have an exclusive pool of experienced industry professionals and veterans who have in-depth knowledge in this sector. Contact us to know more.