The Savvy Client’s Definite Overview of the Consulting Industry Today
The consulting industry today has been better than what it was a few years ago. It has been in the spotlight for decades now, but the landscape has changed dramatically over time. The savvy client knows better than to rely on outdated information – they understand that the business world is always evolving, and consulting firms must evolve with it.
In today’s fast-paced environment, consulting firms need to be agile, adaptable, and well-versed in a variety of industries. The consultants who thrive are those who can offer both deep expertise and fresh perspectives.
To be successful in the consulting industry today, firms must focus on innovation, collaboration, and continuous learning. For the savvy client, it’s essential to choose a consulting firm that is on the cutting edge of these trends – one that can bring a wealth of knowledge and experience to the table while also constantly pushing the boundaries of what’s possible.
The Consulting Industry Today
The consulting industry is one that is constantly evolving, making it difficult for businesses to keep up with the latest trends and practices. However, with our expertise, we can offer a detailed snapshot of the industry as it stands today.
We have compiled a list of 8 major features that encompass the consulting landscape, ranging from key players in the field to the various services they offer. With this knowledge at your fingertips, you’ll be well-equipped to make informed decisions that drive your business forward.
Don’t let the ever-changing consulting industry catch you off guard – let us provide you with the insights you need to stay ahead of the curve.
8 Main Features of the Consulting Industry Today
The consulting industry today boasts a dynamic landscape that reflects the ever-changing business world. Within this industry, there are a variety of features that are driving success and innovation.
Let us now look at the 8 main features of the consulting industry today!
#1. Main Players Consultancies
When you think about direct purchasing, would you source from the local neighbors or take advantage of the global marketplace? Would you always use the same suppliers? You would probably play with some competition, to ensure you get the best supplier.
Consulting abides by the same rules, and the supply options are almost unlimited once you get to know the market. Another good way to approach the complexity of the consulting market is to look at the size of the consulting providers.
As a rule, large firms offer a broad range of services, while small firms tend to specialize in a narrow domain. The bulk of the consulting providers are very small boutiques with less than 10 employees.
In the US for example, they represent 87% of all consulting firms. The remaining 13% of consulting firms with over 10 employees, however, generate more than 90% of the total revenues in the industry.
#2. Mergers & Acquisitions – Very Active Front
An interesting trend going on for the past 15-20 years or more, is the mergers and acquisitions. Every year since 2006, we observe roughly 500 acquisitions or mergers of management consulting firms of all sizes with larger players in the consulting industry.
The reasons behind these moves can be to access in a new client base, to venture in a new capability or a new industry, or to strengthen an existing practice. The consulting landscape reflects that continuous M&A activity.
Compared to the average, the consulting industry has 60% less small firms between 10 and 50 employees, and almost three times more firms over 500 employees. Thus, the consulting industry is clearly a large market with robust growth.
#3. Levels of Consulting Offering
Interesting to note that the scope of “consulting services” continues to expand. The top-level offering is highly skilled advisory with a proven reputation and higher fees.
The 2nd level of consultancies is made of specialty niche technology services that have a specific price range. And the 3rd level comprises of highly skilled niche experts hired on specific projects.
#4. Digital Age Disruption Trends
A few years back, the consulting industry was shaped by 3 major trends: digital transformation, technological disruption and cultural shifts within the industry due to globalization.
The expertise topics offered to clients expand and multiply even further, in niche markets. Digital agencies and consultants’ capabilities further overlap, as they offer similar expertise.
The consulting industry has undergone significant changes over the past year, and it is no secret that the COVID-19 pandemic has played a critical role in shaping the landscape of the sector.
Consulting firms have had to adapt quickly to support clients facing unprecedented challenges, including supply chain disruptions, remote work, and an increasingly digital economy. However, amidst all the chaos, one thing is clear: the consulting industry remains as vital as ever.
#5. Freelance Consultants and Micro-Consulting
We are all familiar with the growing trend of freelance services, but micro-consulting sounds kind of trendy too. The concept refers to getting expert help, in short, targeted projects for clients.
It differs from months-long engagement and a team of consultants working together. It’s also interesting to mention that according to recent surveys, most freelance consultants like to stay independent and enjoy the flexibility of their work.
#6. New Billing Models Applied
The demand for performance-based billing models has been growing as well. More and more clients now have the technological capability to slice and dice every expense. And they are able to analyze their spending on consulting, while evaluating the ROI.
And speaking of the ROI of your consulting spend, we did a whole podcast series on the said topic. You can kick things off by listening to the overview episode by clicking here. And as far as the remaining episodes of the podcast series is concerned, hop over to Consulting Quest to check the episodes out.
Now getting back to the new billing models, performance-based billing is also popular among consultants. This pricing styles can prove mutually beneficial to clients and consultants alike, reducing the chance for unexpected fees, and setting up a well-defined benchmark for consultants to prove the value they bring.
#7. Increased Competition & Continuing Commoditization of Services
The consulting industry is not immune to the impact of the freelance economy. With the rise of online marketplaces, clients are spoilt for choice when it comes to hiring experts or seeking advice.
These marketplaces bring together a diverse pool of talent from around the world, allowing clients to tap into the niche expertise they need, without being confined to a local talent pool.
This trend is transforming the way consultants work, with many turning to freelancing as a means of offering their services to a wider client base. As the freelance economy continues to grow, it’s clear that the consulting industry today will need to adapt to meet the changing needs of its clients.
#8. Never Ending Need for New Skills & Innovation
The fast pace of innovation is affecting all industries. Consultants now strive to stay on the cutting-edge of knowledge. But by evolving and enhancing their expertise, clients are not the only beneficiaries of this trend, consultants too, as they are able to build better portfolios and ensure long term success.
Closing Thoughts
The consulting industry is constantly evolving, and staying up-to-date on the latest trends and practices is crucial to success. With the right knowledge and understanding of the market, you can better leverage their resources to make informed decisions and drive growth.
By deepening your understanding of the consulting industry, you can find yourself in a position to buy consulting better for your business and stay ahead of the competition.
Don’t miss out on the opportunity to level up your game and stay ahead of the curve!
Hélène Laffitte is the CEO of Consulting Quest, a Global Performance-Driven Consulting Platform and author of “Smart Consulting Sourcing”, a step by step guide to getting the best ROI from your consulting. With a blend of experience in Procurement and Consulting, Hélène is passionate about helping Companies create more value through Consulting.
