Future of consulting report forecasts the rise of practical consultancy

The consulting industry is transforming. Influenced by technology disruption, greater spend visibility, subject matter expertise, knowledge transfer, execution focus and supplier rationalisation, this transformation is being pushed and pulled by three industry levers: consultants’ wants, companies’ needs, and consulting firms’ abilities. Kaush Oza, a Senior Director at RGP, explains.

To better understand the changing landscape and the future of the consulting industry, Resources Global Professionals (RGP) surveyed more than 450 companies for their views on what they look for in a consulting partner, how they select companies, and how their needs are being met. The findings revealed a gap between what clients need and what has traditionally been offered.

There is a natural delineation of consulting tiers, with companies falling into one of two broad categories. The first category: consulting firms provide high level, strategic advisory services and command high fees due to their pedigree. The second category represents the reality of the commoditisation of certain services and encompasses large scale work flows with well-defined processes (using armies of consultants) as well as staff augmentation. These firms tend to compete on price.

However, as companies rationalise their consulting suppliers to reduce costs and improve the quality and effectiveness of the services, it becomes apparent that specific needs are not consistently met by the current two-tier system. Hands-on subject matter expertise and complete knowledge transfer back to the business are two of the most common unmet needs. The traditional two-category dichotomy of consulting firms is not addressing the gap.

The rise of the third category

At RGP, we believe another category is emerging: the third category. This category is based on engaging experienced subject matter experts to advise, help plan and, most importantly, execute a specific project in a way that complements an organisation’s existing resources and business plans. Third category consulting provides agile resources – unbundled services, allowing companies to select customised and specific expertise needed to achieve objectives with variable or specific solutions.

For example, imagine an organisation decides to establish an enterprise PMO and needs supplemental expertise in doing so. However, the decision makers do not want or need any type of assessment, nor do they desire a large consulting team to tell them what to do or control the initiative.

This challenge could be solved by using a mix of internal and external resources where the consulting firm provides the building blocks for the PMO design, delivers tailored tools and templates to help the organisation build the PMO structure and, most importantly, bakes in sustainable knowledge (e.g., utilises a train-the-trainer approach). While the organisation has engaged external help, company leaders can still rely on their internal employees to execute some or all of the work moving forward.

The third category fosters a symbiotic partnership between a consulting company and the organisation it serves. No longer is it about merely providing recommendations. Rather, it is a “help us and train us,” and “leave us with something we can leverage” model. This blended approach to consultancy is substantiated by key findings from RGP’s survey*.

The need for subject matter experts who are doers

Companies are increasingly seeking more agile, tailored, practical consulting support, rather than a large team of consultants, commodity players, or a high-priced brand name. Subject matter expertise combined with the ability to deliver is the primary driver for hiring consulting firms. Organisations are looking for collaborative help around specific needs, rather than consultants who follow only prescriptive methodologies or who are more instructive (strategy-only) and less participative.

A key attribute sought is the ability to not only execute, but provide attentive and tailored solutions to the client. Looking deeper into the attentiveness attribute, consulting firms need to position their subject matter specialty into meaningful business results. For instance, in addition to having source-to-report experience, a consultant on a process improvement project should also possess the ability to build internal capabilities by addressing organisational constraints related to people, process, and technology. A subject matter expert recognises that, at some point, additional resources may result in diminishing returns.

Today, companies are more knowledgeable about what they want done. Although companies may not have the bandwidth to attend to all aspects of the initiative, they do have enough information to define the need, but seek external help with experience and judgment (i.e. a precise solution or problem-solver) to supplement the company’s own internal talent to execute initiatives.

Related: Practical consulting set to become the new norm in consultancy industry.

* The survey by RGP was conducted among 472 respondents, primarily decision-makers from Fortune 1000 and mid-market companies, representing a range of sectors including consumer goods, financial services, construction, pharmaceuticals, manufacturing and conglomerates.