admin The management consulting sector is still expanding, but it’s not without challenges. As long as we have not implemented big data or automated processes, it will be sustainable as long as skilled people remain on the ground. Although the industry jumped into the high-tech world in 2018 and 2019, digitization will need to improve in several areas in 2022 to sustain rather surprising growth.
Regulatory changes continue to affect the way UK and US management consulting firms do business. Brexit continues to have an impact on UK business. Employment and intellectual property decisions, and the scope of liability between “claims” and “accidents,” continue to affect our day-to-day business activities in the United States. These legal issues need to be addressed in order for any business to function properly. Today, the management consulting industry has a net worth of $250 billion. This large and lucrative industry continues to grow globally, with industrial hubs in the UK and USA. The UK continues to show the highest growth rates, nearly four times the UK economy in 2015. In 2016, it rose 8.2% from £6.02 billion to £6.79 billion. The growth trend has continued and should continue into 2022. The US management consulting industry recorded similar growth, up 7.7% to $55 billion over the same period. In the United States, the trend of companies hiring consultants continues, driving the industry’s growth.
It is expected to see increased digitalization and a digital response to the growing demand to change operations, structures and service conditions more quickly to meet customer expectations. Management consulting is still a labour-intensive business service, but other industries have already embraced digital transformation. Humans are still used in research, analysis, process and management and provide consulting services. This trend will lead consulting to shift from a billable time-based business model to a flat rate strategy.
As management consultants become more popular, they are increasingly segmented into two market segments: a low-cost product segment and a high-value professional consulting segment. This department forces each company to develop new strategies for operating in both markets, resulting in changes in business models, pricing structures, and brand architectures. More than 700,000 consulting firms worldwide offer a wide range of services, including general consulting and services focused on niche topics such as finance, information technology (IT), human resources (HR), operations, strategy, and taxation.
Coming to the demand of new talent, the shift from traditional top ranked universities to focusing on skill sets when recruiting new talent. A bachelor’s degree is still an entry-level requirement, but consulting firms continue to focus on only the top handful of high school graduates instead of looking at who has the best skills. Recruiters get to know people through presentations and posters at relevant academic conferences and through field internships. As retention becomes an issue, consulting firms will continue to move from people to products.
Challenges and Trends
The management consulting industry continues to move toward a multi-sourcing model. This applies to work with niche companies and other consultants. Multisourcing takes many forms, including large generalist companies working with smaller niche experts. Management consulting firms that have partnered with consultants outside the industry; work with scientists, digital institutions and technology companies to provide advisory services.
Clients have changed the way they screen and select consultants as a result of selection process. Now they use an online service where they can conduct research to determine which consulting is best for their needs. The speed of these services and the reduction in the cost of using these Internet databases are of interest to many large consulting firms as they make it easier for their clients to find subject matter experts (SMEs). This way you can ask, “Who do you know?” Aspects and referrals are removed and the hiring process is reduced to a pure experience. It also eliminates the reputational aspect of consultant selection. An established company with a reputation that has taken decades to give way to a small and medium-sized business with specific knowledge. A related trend is to create internal teams from former consultants. These internal “SWOT teams” eliminate the need for external consultants.
2022 requires a rapid transition to a modern way to keep the industry moving forward. The overreliance on people has forced consulting firms to develop new ways of hiring talent. The pool of eligible candidates is still small, and reliance on people will only inflate the cost of achieving completed workloads. Using big data to grow your business and develop how your customers use it can help you make better decisions overall. The management consulting industry must develop its own big data analytics, including data mining and data modelling, using both data lakes and data warehouses. The integration of automated analytics will accelerate the business process improvement process.
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