Consultancy will never be the same! 80% of all consultancy jobs disappear, within 5-10 years!

jun 28, 2015

Because of the success (views, likes, comments) of my POST (in Dutch) of June 25th, I created an Englisch version.

I’ve been working in the field of consultancy for more than 35 years, in all possible functions. I have build and run my own company (size +/- 100 employees) over more than 30 years. Our services were focused on vision & strategy development, the implementation of this vision & strategy via a strong and professional program/project management (especially of mega projects) and the development of customized software at a fixed price with serious warranties.

The last 25 years I directed and executed mainly activities for technology companies (including Telcos, ICT, automotive) and for information processors (e.g. insurers). I learned that technological developments follow each other rapidly, even exponentially. If a company delivers products and services that especially are based on digital information and ICT, you can readily assume that these products and services will follow Moore’s law also (which already applies for the computer chips sector for 60 years). So, in principle, the price/performance ratio for this type of companies will double up in 2 years!

But this exponential technological development I see only limited or not mirrored in the development of most organizations/companies. The latter develop mainly linear. If these organizations/companies want to use the exponential technological developments to the max, they also have to develop exponentially. This is a serious transition path which needs maximum attention for the “higher company purpose“. Knowledge becomes obsolete/is aging very quickly, which will lead to maximum use of “Staffing-on-Demand”, smart “Algorithms” and “Artificial Intelligence”. Plus the use of “Leveraged Assets” and a strong “Community & Crowd“ has to be created, developed, binded and fascinated. In all of this, the use of “Big Data” and the associated analysis tools are key. As well as in-depth specialization and use of “Artificial Intelligence”.

These disruptive changes also have an irreversible impact on the way consultancy will be purchased, implemented and evaluated. With the help of big data, data analytics, artificial intelligence and tools the executive “slave / monkish consultancy work” will be (almost) completely automated. In fact, there is already a “deforestation” going on at the once “green pastures” of the (management) consultancy: 1/3 question loss in consultancy agencies is quite normal, so 1/3 turnover loss also. The “warm-bodies-slide” is really coming to an end. There is already a substantial drop in demand. Customers have more knowledge and experience in house, or consultants adopted by them self. Self-employed reinforce the “cut-throat” competition.

Last year in the Netherlands, I already saw a large number of high-profile bankruptcies or acquisitions in the consultancy middle segment. Also reputable consultancy firms have substantially reorganized and staff reduced. The shake-out in the consultancy world has already started. In the last 5-10 years, about 80% of all contemporary consultancy jobs disappeared. Only the really creative top consultants, which add real value and who make the difference, remain.

This will be the cause that only a limited number of very large global consultancy companies (top end) will be left. These companies are using big data, data analytics, artificial intelligence and tools to the max. Also a large number of self-employed with highly specialized knowledge will be left as well as a number of boutiques with 8-12 employees (niche segment), with a very strong focus, all with deep specialist knowledge and highly developed tools, using big data, data analytics and artificial intelligence also to the max. The middle segment will be further decimated. This will result in “Productization of Consultancy”.