Archives for: December 2007

12/27/07

11:13:25 am, Categories: Entrepreneurship, Technology, Business Trends, KPO  

The Management Consulting industry has changed quite a bit over the past decade or so. And the off-shoring phenomenon has added a new element to the mix. Thought I would put together a back-of-the-envelope model for how I see Management Consulting continuing to evolve over the next 10 years.

If you mentioned Management Consulting in the 1990s, the key firms that came to mind were McKinsey, BCG, Bain and then, the Big 6 (Anderson, C&L, PW, KPMG, E&Y and Deloitte). The first 3 firms were focused exclusively on strategy consulting. The Management Consulting units of the Big 6, however, had more expansive offerings that included BPR and IT Design & Delivery. That is, the Big 6 not only advised on solutions to their customers' business problems. They also delivered these solutions. One of the things I distinctly remember about the 1990s is how Management Consulting firms would shy away from “low-value”, long-term, outsourcing relationships. These types of deals, typically focused on IT outsourcing, were pursued by EDS, IBM and maybe towards the end of the decade, by Accenture as well.

Off-shoring in the late 1990s and specifically in the early part of the current decade created new markets. The SWITCH companies (Satyam, Wipro, InfoSys, TCS, Cognizant and HCL) all have significant traction in IT markets (Engineering, R&D, Custom IT, ERP / CRM). The business process outsourcing market took a long circuitous route to maturity and now compares favorably with the IT market in India. As I mentioned in a previous article on BPO, the SWITCH companies have established sizeable BPO lines of business as well, either through acquisitions or organic growth.

The most interesting development I find in this context is the development of the KPO market. I view this as the natural evolution of strategy consulting. I remember the days in the 1990s, when a handful of well-dressed management consultants would engage with a customer for a couple of months. And after a series of interviews and mid-night sessions, we would deliver a well-crafted presentation on the strategic solutions to the customer’s imminent business problems. In the industry, we used to call our deliverables “credenza-ware”, because most of our presentations would gather dust on the CxOs’ credenzas. What the last few years have revealed is that with India’s large, latent pool of well qualified research analysts, strategic advise can be delivered at such a granular level that it is immediately actionable. This is what we have been doing at SalesQB. We do not just deliver PowerPoint presentations to Sales VPs on how they could execute their sales strategy. We provide personalized sales support to individual sales reps on specific deals & accounts that they are chasing. This is what I call Operational Analytics.

Fast-forward to the 2010s. I think Management Consulting firms will have to evolve and demonstrate strong Advise & Analytics capabilities that are tightly coupled with their current BPR, BPO and IT capabilities. And I think Accenture is already on the right track with its emphasis on Consulting, Outsourcing & Technology. It will be interesting to see how the SWITCH companies morph their identities from IT service vendors to business service providers to leading Management Consulting firms …

Sampath

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