“Consulting as a Product” Becomes Product
I’m often asked what’s meant when consulting firms “productize” their services. In the classic sense, we’re describing how they codify their service process/delivery for repeatability and scalability.
Think ERP implementation in the late ‘90s, or Internet 1.0 in the ‘00s, or IOT in the ‘10s; consulting firms first advised clients on different solutions, then took to implementing and modifying those solutions as growth drivers for their consulting business.
This worked because consultants intimately knew their clients’ businesses — they were “trusted advisors” after all — and could apply technical solutions built by others in ways well beyond the solution-builders themselves. The key point is that firms didn’t invent technology, they made it better for their clients.
Based on that nuanced view, consultants have been in the product-building business for years. What’s now different is that digital and data are increasingly driving these global firms to cut out the tech middlemen.
Our team observed this first-hand at recent analyst events hosted by a couple of Big 4 firms. One involved risk services and the other financial crimes. In both cases, partners proudly proclaimed the virtues of their products, along with hands-on demonstrations. Tools that provided real-time scoring of supply chain risk and offered near-instantaneous mitigation solutions. Financial crime monitoring that anticipated illegal activity before it happens. We’re talking Minority Report-kind of stuff.
As management consulting firms seek to usurp traditional tech, they still wish to retain their trusted relationship with client executives. In effect, many global firms want to be both the client’s consiglieore and muscle.
When I talk with partners, particularly those with tenure, I hear a fair bit of consternation as to how this dual role will affect the historical people-plus-time business model that drives consulting. Remember, the largest 10 global consulting firms employ hundreds of thousands of consultants and analysts. They’ve trained and developed these folks to do consulting.
There won’t be enough classic consulting work to keep the hordes of consultants busy. Nor will the majority of those mid-level consultants be re-skillable to compete with the digital innovation companies. Yes, consulting firms are hiring technicians and non-MBAs at a record clip. But so are Google … and Amazon … and Apple … and every Silicon startup around the world.
So what’s the end game? Well, at some point in the very near future, some very high-profile global firms will become better known for the products they produce than the advice they provide. Bully for them. But at that point, those firms are no longer in the consulting business … even if people inside those firms claim otherwise.
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