Challenges Faced by the Global Management Consulting Community
Consulting companies have a key role in supporting businesses across domains as disparate as sales and marketing, business strategy, human resources, and manufacturing & supply chain. While the multiplicity of the industry means it can endure changes rather easily unlike others, a Deltek report indicates it still confronts a variety of challenges in the digital age.
Global management consulting help their customers in several ways, from assisting them in formulating business models, reduce costs, foresee risk, and modernize products, to bolstering their processes for handling talent, remaining compliant and hiring staff. Gradually, this includes serving customers to stay a step ahead when embracing digital tools or adjusting to swiftly shifting geopolitical settings. As a consequence, while the international economy may be slowing, the consulting industry maintains its strong growth.
Here are some of the challenges faced by consultancies worldwide:
Changing client behavior
Corporate customers of specialized services are more insistent today and are pushing back against ideas such as billable hours and demanding fixed payments with more transparency on expenses. In an agile ecosystem, expanded by speedy digital innovation, customers now demand more value, greater quality of work, and speedier delivery of services.
Simultaneously, they are also demanding more responsibility and openness in the work being delivered. This shift in behavior is due to the financial crunch when firms were compelled to significantly reduce their external consulting expenditure and since then, they are holding a superior level of inspection. Customers are scrutinizing the value offered by consultants with more interest than earlier.
Profitability
As customers are keen on shopping around for consulting services, they clearly hold more influence than ever before and are asking for more flexibility and value at a reduced price. According to a survey, more than half of C-Suite executives stated that their leading challenge is “changing client behavior” where they are being asked to provide more value at the same cost.
This has impacted the revenue of consulting firms, pushing consultants to relook at their business models. According to a study 51% of those surveyed deemed price pressure as a leading business development test over the coming few years, and growing profitability is the primary concern for 54% of the businesses surveyed, followed by dealing with a contracting or volatile spending situation (27%).
New competition
Buoyed by groundbreaking technologies allowing them to accomplish more with less, new companies are joining the consulting arena, and alternate, tech-savvy business structures are being implemented. According to the survey carried out by Deltek, 55% stated that tackling the growing competition was a primary concern, while 33% of C-Suite executives stated “identifying competitive advantage” as one among their top priorities for the coming years. With the growth of AI, automation of consultancy work could turn into a reality. Duties carried out by groups of junior analysts can today be done by a machine in minutes.
Project complexity
Consulting companies are confronting a difficult micro-ecosystem where they must offer the best advice on a regular basis. The global trait of the industry compounds the challenge, as businesses deliver more projects abroad, in many instances also collaborating with subcontractors, partner firms and/or freelancers. Delivering a project is not the primary concern, the challenge is doing it more rapidly, more effectively and with tighter resources, while continuing to fulfil customer requirements.
Complexity is growing also because customers are getting better insight into their projects and asking for more control. The growth of mobile technology has caused a major shift in the sector, empowering stakeholders to get quick access to project information on the move. It offers project managers the task of accomplishing their projects within a more active data ecosystem.
Cybersecurity
Consulting companies manage an immense volume of classified client data. This extends from strategic information to commercial and personal data. Such high-value data can be detrimental if it is accessed by rogue elements. That makes professional service companies clear targets for hackers, data infringements, therefore, present a serious threat to consulting firms.
