Key Challenges For Management Consultancies in 2017
The management consulting sector has experienced positive growth over the last few years, despite there being significant changes in terms of technology and legislation. This has positioned the industry well but there are still challenges and like every professional services industry, management consulting is defined by its client’s needs – as they change, so to must the industry.
For the year ahead, the focus will be on operational processes and doing more with less, and for many, the key to success lies with implementing a comprehensive digital strategy.
One of the primary challenges the industry faces is the growing division of the market into two distinct parts – a low cost, commoditised section and a high-value, more classic knowledge consulting section.
Another challenge is that the speed of development in digital technologies is creating new business models at a faster rate than many current company structures can cope with.
Again, this loops back to the necessity of firms having robust digital strategy. Planning and completing a successful digital transformation means that larger consulting firms can become more agile, adopting the fail fast mindset which is often only found engrained within smaller firms.
Management Consulting Industry Snapshot
What Else Can Management Consultancies Do To Adapt To Change?
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This mindset encourages innovation and empowers firms to differentiate – ultimately providing greater value to clients. There are also other elements outside of digital that firms must consider this year as they work towards revenue and business growth.
The first being the ongoing war for talent. Competition is fierce and many firms have been forced to do one of two things – either explore service and product offerings that don’t rely on their ability to sell people or look outside the traditional talent sphere of universities and focus more on skills than qualifications.
The second factor is the need for collaboration. As specialist and disruptor firms appear it becomes more apparent that in order to succeed, firms will need to partner with each other in order to meet the full breadth of client demands.
This doesn’t just refer to a large firm partnering with a start-up firm either, more and more it is about a management consulting firm partnering with a digital or academic agency to widen the scope of experience.
The final element to consider is the move away from traditional business models to an output focused model that shares the risks and rewards with clients.
Still in its infancy of what that might look like, it is none the less important to consider as technical work becomes commoditised and margins fall.
2017 Management Consulting Industry Snapshot
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- Transformational Trends