The Management Consulting industry is projected to endure a transformational phase as it confronts emerging headwinds including a continuation of changing business planning technology and changing client expectations.
Industry Growth and Saturation
A Statista report estimates that the management consultancy industry will grow to a value of just under USD $300b. The report forecasts steady growth for the five main sectors of business consulting in 2019: business planning (1%), financial advisory (4%), HR (2%), operations (4%) and technology (2%).
Statista: Size of global consulting market from 2011 to 2020, by segment (in billion U.S. dollars)
Changing Client Expectations
While the growth of the industry is not in question, client expectations are. Moody Analytics predict that in 2019 consultants will experience success if they are able to deliver the following:
1. Tangible value — the ability of a consulting firm to provide something physical for the client to walk away with.
MAUS CEO Peter Hickey stresses this point in his Client Discovery webinars arguing that providing a tangible report in the first client meeting paints a picture of professionalism.
This process can be automated through the MAUS Customer Needs Analysis Software
2. Performance-based billing — remuneration based on performance outcomes and results, rather than hours-billed.
3. Multi-sourcing — refers to the consolidation of consultancy in a number of business functions (e.g. firms providing both financial and strategy advice services).
Summary: Clients in 2019 are looking for consultants to be a one-stop source where they can receive a number of consultancy services. They are focused on building trust-based relationships with consultancy firms, whereby they are looking for firms to prove their expertise and trustworthiness through performance-based payment options. These consumer groups are also looking for businesses to provide something beyond advice, they want tangibles and a close coaching relationship to provide guidance on a range of issues, not just financial.
The Opportunity – How Can Businesses Adapt and Survive in 2019?
- Being able to sell on value.
Clients no longer want to billed by-the-hour, and neither should consultants. Value and performance based pricing allows consultants to scale their business if they integrate automaton processes. This is because software can fast-track consultant activities such as building reports which often take hours but are very valuable to clients. This also means that consultants should define the outcomes they can deliver.
- Place a focus on trust
Invest in trust-building training programs (The Institute of Advisors has recently launched a program that covers trust-building in the consulting industry).
- Expand your services
Business advisors need to expand their service range, for example, a financial advisor completing a course in business strategy planning.
- Differentiate your service through credibility
With the vast amount of consultants in the market in 2019, advisors need to capitalise on client desires for trust by emphasising their credentials. The most recognised business advisor course endorsed by the Institute of Advisors is the CBA Certified Business Advisor Course. For the next available CBA course, see here.