The same forces that disrupted so many businesses, from steel to publishing, are starting to reshape the world of professional services. The pattern of industry disruption is familiar: New competitors with new business models arrive; incumbents choose to ignore the new players or to flee to higher-margin activities.
To compete and win in today’s disruptive world professional service companies need to think about their business along these 2 dimensions:
But, how professional service firms think about customers and information today actually stifles competitiveness. Customer conversations are ignored and companies try to solve their problems by abstracting away complexity. When faced with disruption the worst thing a professional services firm do is simplify. Simplification frustrates employees and customers, leads to lost deals, commoditizes your company and makes it less competitive.
The same forces that disrupted so many businesses, from steel to publishing, are starting to reshape the world of consulting.
Cost pressures force clients to abandon the easy assumption that price is a proxy for quality.
We are seeing the beginnings of a shift in consulting’s competitive dynamic from the primacy of integrated solution shops, which are designed to conduct all aspects of the client engagement, to modular providers, which specialize in supplying one specific link in the value chain.
I anticipate that the percentage of projects employing value-based pricing instead of per diem billing will go from the high single digits to a third of the business within 20 years.
Competitors are becoming increasingly sophisticated - with nontraditional business models that are gaining acceptance.
The current pattern of disruption in consulting is familiar to what other industries have experienced: New competitors with new business models arrive; incumbents choose to ignore the new players or to flee to higher-margin activities.
Democratization and access to data are taking out a huge chunk of value and differentiation from traditional consulting firms.
Turnover at all levels in prestigious consulting firms averages 18% to 20% a year.
At traditional strategy-consulting firms, the share of work that is classic strategy has been steadily decreasing and is now about 20%, down from 60% to 70% some 30 years ago.
The traditional boundaries between professional services are blurring, and the new landscape will present novel opportunities.
Clients rely on brand, reputation, and “social proof”—that is, the professionals’ educational pedigrees, eloquence, and demeanor—as substitutes for measurable results.
It’s critical to deliver client experiences that feel connected, memorable, and personal. Docurated uses data analytics and machine learning to empower consults with the right information at the right time.
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