The Death of the Management Consulting Firm
West Monroe CEO Kevin McCarty featured in TheConsultantLounge
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Date : February 26, 2016
The management consulting industry is experiencing a major break from tradition. The historical consulting firm elite long enjoyed a position of prestige as trusted strategic partners, but today’s clients demand tangible solutions as much – if not more than – roadmaps or million dollar strategy decks.
Consulting firms can’t afford to continue solely as research and advice providers; instead, they must take an implementation, hands-on approach to not just solving client challenges but resolving them.

Technology architecture, design, build, implementations, and application design, previously the domain of system integration and other niche third parties, have to be the new table stakes for consulting firms.

Historically consulting firms survived for decades by embracing a technology-agnostic approach, but now clients expect IT expertise and a proven track record – no one wants to be your firm’s guinea pig. When most organizations are already playing catchup to remain competitive. Unfortunately, many traditional consulting firms are also scrambling to catch up, and struggling with cultural and logistical barriers in the process as they attempt to add technology depth to their capabilities.

Making Technology a Priority
The culture found at many prominent management consulting firms today didn’t appear out of nowhere. For years, consultants could afford to avoid and even shun tech heavy solutions. In fact, many firms celebrated their high-brow focus on strategic solutions over in-the-weeds fieldwork. But following the Y2K panic and subsequent dot-com boom, emerging IT obstacles and the pace of tech adoption quickly overwhelmed client businesses. They needed partners to not only provide research and abstract ideas, but to guide and implement innovative, digital solutions, even tactical IT catch-up programs.

In the decade and a half since, many firms have made only halfhearted efforts to meet clients’ demands. Some organizations have chosen to outsource “hands on” IT work to third-parties, theoretically enabling them to retain their exclusive focus on strategy, financial and organization while referring clients the tactical support they need. Unsurprisingly, this model has only seen limited success, producing disjointed solutions that consulting firms are ill equipped to support and failing to deliver the results envisioned.

In order for today’s consulting to survive and compete, they need to be more than intermediaries between IT gurus and business minded which gaps exist within their clients’ organizations as well – they must cultivate technology expertise in-house to provide the seamless blend of business and tech capabilities.

A Safe Space for IT
Sooner rather than later, management consulting firms will realize that outsourcing IT operations is a half-baked, unsustainable option. In order to make real progress and attract qualified technologists, firms first have to overcome their entrenched and sometimes hierarchical cultures. Even if the firm’s leadership is fully committed to embracing internal IT solution development and the technologists who make that possible, organizations historically indifferent or even demeaning to IT types will face an uphill battle. It’s not enough to commit to change from the top; consulting firms must take concrete steps to elevate technology a valuable practice area in the eyes of clients and staff.

Reforming Culture
Deeply ingrained cultural norms have prevented many firms from taking meaningful steps to attract deep technologists, even as the need for them grows. This technophobic reputation deters qualified IT experts from seeking careers within the consulting industry, and those that do risk being treated like second-class within their own organizations.

IT specialists should feel at home in management consulting environments, and integrated into strategic project teams whenever possible. Maintaining a wall between job functions misses the point. Permanently transforming consulting firm culture only happens when tech and business experts are encouraged to work together, seamlessly as partners – ideally cross-trained to be both.

Taking Ownership of Assets
It’s not enough for consulting firms to say they “do IT.” Beyond recruiting the right people, firms need to invest resources into developing proprietary solutions that address critical client challenges. Having a portfolio of exclusive software, methods and other intellectual property serves multiple goals: it demonstrates a concrete value-add to prospective clients, and helps to attract talented, external IT candidates to your ranks. Unlike vendor solutions, in-house assets can be tailored quickly to meet specific project needs and give clients a reason to keep working with you long after an implementation ends.

Projecting Authenticity
The key to effectively integrating IT development and support into your organization is authenticity. It’s not enough for technologists to feel at home in your firm; clients must also view technology as a core competency of your organization, rather than a bolt-on offering. At the same time, it’s imperative that your firm’s values support a more collaborative environment, including how your organization presents itself, how incentives are structured and more. As technology becomes the medium for controlling almost all critical business processes, firms must shake their antiquated notions of management consulting in favor of a more balanced union of strategic thinking and technological solutions.

Going forward, management consulting firms’ survival depends on their ability and willingness to adapt. Now is the time for firms to go all-in on technology – from cultural, personnel and service perspectives – or risk obsolescence.

To read this article as it originally appeared on TheConsultantLounge, please click here.

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