Management consulting, a $250 billion industry, is under threat from digital disruption. New players, such as Eden McCallum and Business Talent Group (BTG), are offering a ‘gig economy’ approach, where freelance consultants are matched with projects. This model reduces costs, increases flexibility, and offers access to a wider range of expertise. Additionally, these firms are utilising the latest technology to deliver their services more efficiently.
Traditional firms are also feeling the pressure from in-house consulting teams. Companies like General Electric and Siemens have developed their own advisory services, reducing reliance on external consultants. This trend is driven by the desire for greater control over strategic decisions and to keep sensitive information in-house.
Moreover, the rise of artificial intelligence (AI) is another significant challenge. AI can automate many tasks traditionally performed by consultants, such as data analysis and strategy development. Firms like McKinsey and BCG have already started investing in AI and machine learning to stay competitive.
Lastly, the management consulting industry is seeing a shift towards outcome-based fees. This pricing model aligns the interests of clients and consultants, as payment is linked to the success of a project, making the industry more competitive.
In conclusion, digital disruption is reshaping the landscape of management consulting, with new business models, AI, and outcome-based fees driving change. Traditional firms must adapt to survive in this new environment.
Go to source article: https://www.cbinsights.com/research/disrupting-management-consulting/