Ready or Not: The Consulting Industry is Ripe for Disruption

[Sally McKenzie]

Responding to the most recent post, my view is that this will not affect the major consulting firms.  The website appears to serve an entirely untapped part of the market. 

 

If you are an established consultant or consulting firm and have a lot of clients then there would be absolutely no need for existing clients to contact you through a third party website, they would just call you directly to discuss their needs. 

 

Thoughts?

[Tom Spencer]

Sally, 

 

Thanks for your thoughts. 

 

It may not effect the major consulting firms right now, but the nature of a disruptive innovation is that it begins in a part of the market is too small or low margin for the established players to care about.  Once the innovation gains a foothold at the bottom of the market, it is then able to slowly move upmarket and displace the established players. 

[Ted]

If I were a consultant, I would keep an eye on the rate at which the technology is moving.

 

Referring to the HBR article consulting on the cusp of destruction, opacity and agility were the two factors that kept consulting immune to disruption. Opacity is under threat. The changing business models offered by companies such as

CONSULTED and the democratization of knowledge[1] will continue to diminish its importance.

 

I cannot overstate the impact of technology, especially Big Data and Analytics on consulting. The sky rocketing rate at which data is being generated and collected, exponentially increasing computer processing power, and powerful algorithms that can derive never-before insights from this data, would eat more and more into what was purely a professional's job. Has been happening in marketing (an interesting story), is now poised to hit medicine (HBR), and it's not going to stop.

 

However, the constantly changing business environment will bring in new problems which would need to be solved [1]. The world will continue to need consultants. But the classical consultant may not be the one.  In this digital world, I believe the power may shift towards consultants who can understand and define algorithms or techies who understand business.

 

My advice to aspiring consultants - consider equipping yourself with this new weapon and keep an eye open for potential disruptors.

 

References

[1] https://hbr.org/2013/10/consulting-on-the-cusp-of-disruption

[Tom Spencer]

Ted, 

 

I completely agree with what you say about big data and computer processing power.  I believe that the disruption of professional services, as we know it, is coming but it is not clear when it will arrive.

 

I'm sure you've already seen it but relevant to this discussion is Jeremy Howard's fascinating talk about the implications of computers that can learn (embedded below).  

 

Howard shares the view (which may be quite frightening if you currently have a highly paid professional services job) that computers which are able to learn will be able to teach themselves to do cognitively complex tasks, the kinds of tasks that are currently performed by highly paid professional services firms.  

 

The question is, what will happen to today's large, prestigious and highly paid professional services firms when data scientists are able to solve the same problems more quickly and for lower cost using computer algorithms?  

 

Existing firms will either be forced to buy the new technology and integrate it into the their existing practices (and presumably layoff a large number of employees in the process).  Alternatively, or perhaps additionally, we will see disruption innovation on a similar scale to that which was seen during the industrial revolution.