Difference between revisions of "Future of Consulting 2020"

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Kiho Lee <br>  
Kiho Lee <br>  
Conor Ruff <br>  
Conor Ruff <br>  
Lidia Sholkova  
Lidia Sholkova <br>
= Background =
 
Problem owner: Joost Preyde (IT):<br>


== Background ==
Quote: "All progress depends on the unreasonable man. <br>


Joost Preyde (IT):<br>
quote: "All progress depends on the unreasonable man. <br>
Education:<br>
Education:<br>
1981-1985 Flight Engineering; 1985-1987 MBA<br>
1981-1985 Flight Engineering <br>
1985-1987 MBA <br>
Reading book now: Mojo: How to Get It, How to Keep It, How to Get It Back if You Lose It (so we can talk/ask him the most strange questions)
 


Work:<br>
Partner House of Performance (12 years)<br>
Consultant at Principal Consult<br>
Consultant at Alexander Proudfoot<br>
Marketing Sales B2B at Shell Chemical<br>
Reading book now: Mojo: How to Get It, How to Keep It, How to Get It Back if You Lose It
==Focal Issue==
How will Consulting industry evolve in next 10 years?


Also: check out David Maister: http://davidmaister.com/articles/24/ for deep perspective on the consulting world.
= Interview Questions =


history of consulting: http://www.careers-in-business.com/consulting/hist.htm
[[Future of Consulting 2020 - Interview Questions & Answers]]


== Interview Questions ==
= Driving Forces =


'''Starting Questions''' <br>
==Economic Driving Forces==
*[[Global Economic Growth]]  (IT) <br>
*[[Complex Business Environment]] (PD)  <br>
*[[The Role of the Internal Consultant]] (CR) <br>


1) What keeps you awake at night? <br>
==Societal Driving Forces==
2) What do you think are the key uncertainities? <br>
*[[Innovation]] (KL) <br>
3) What is your dream? <br>
*[[Rising need to co-create]] (PD) <br>
4) What do you think drives the changes in consulting companies today? <br>
*[[Rising Intellectual Power of Emerging Markets]] (LS) <br>


'''House of Performance related questions''' <br>
==Technological Driving Forces==
*[[Development of ICT, web 2.0]] (IT) <br>
*[[Globalization of companies]] (KL) <br>
*[[Openness of Information]] (CR) <br>
*[[Automation of processes]] (LS) <br>


1) How do you differentiate your firm from other consulting firms and clients? <br>
= Research Questions =
2) What is the recent successful project and failure? What caused the differences? <br>
3) How do you maintain delivery quality? <br>


'''Changes within Consulting Industry''' <br>
[[Future of Consulting 2020 - Research Questions]]


1) Do you foresee any change in traditional organization structure of consulting firms? (Hierarchical/Flat/Hexagonal) <br>
=Scenarios=
2) Do you foresee any change in pricing model? (Value based pricing as against hour based pricing) <br>
3) Do you foresee an emergence of Credit rating agency for consulting firms? (Similar to what we have for banking industry Moody's) <br>
4) Any change in the business model with more young population? <br>
5) Do you foresee a consolidation trend in consulting industry? <br>
6) What is the future of consulting? What areas? (More specifically, where do you see consulting by 2020 and what trends? In which industry do you see the most growth potential by 2020? Why? <br>
7)Can it be like construction industry? One main big one stop shop developer get order and maintain all relationships with the client and outsorce specialized areas for small consulting companies who are experts in specific areas. <br>
8) What is the future of outsourcing for consulting companies, if any? <br>


'''ICT in consulting''' <br>
==Systems Diagram==


1) What is the role of ICT in the future of consulting? <br>
[[Future of Consulting 2020 First Draft]]
2) Based on ICT changes, do you foresee any standardization happening in consulting industry? <br>


'''Emerging markets''' <br>
[[Future of consulting 2020 - Final Diagram]]


1) Development of different markets for consultancy? <br>
== Short Scenarios Description ==
2) Development of big consulting companies which are non-US and non-European?


== Driving Forces ==
'''Tradition Remains'''<br>
''Current consulting model remains the same''<br>


[[Global Economic Growth]]
-Fear and validation remain an underlying motivation for hiring consultants<br>
1. Global Economic Growth (IT)
-Relationships and trust continue to drive the consultancy model<br>
consulting is usually additional service for companies. During times of financial crisis companies trying to find money for salaries and operations, so consulting is postponed or even rejected by many companies. However, during the economic growth, companies have money which they can spend to consulting. Paradox, but it is what it is. <br>
-Consultant-client relationship shifts to co-creation for innovation<br>


2. Development of ICT, web 2.0 (IT)
'''Inside Out Innovation'''<br>
    more and more companies and people integrate, live in web and use ICT. Future development of ICT will have tremendous influence onto reality and world perception. <br>
''Innovation from within organizations''<br>


3. Demographics (LS) - increasing flexibility/needs of new generation of professionals and implication of aging population 
- Creation of center of excellence + innovation center <br>
e.g.  older retiring partners, changing demographics globally, young generation with different view on workplace <br>
- Growing cycle dimishes external consulting <br>
- Attracting top talent to the organizations <br>


[[Globalization (KL)]]
'''Collective Good Consulting'''<br>
4. Globalization (KL)
''Open source & free consulting'' <br>
    As more companies expand globally their consulting partners also expland their territories. <br>


5. The growing trend and acceptance of outsourcing (CR) <br>
- All information in public domain <br>
Outsourcing has grown tremendously in the 21st century and looks to continue. Not only because of globalization, but also because of the increased need for specialization. If the trend continues, consultancies will be in prime position to fill the gaps.
- On-line collaboration based on non-fee <br>
- Reward through "virtual currency" - promotes free knowledge base <br>


6. Environment (KL) 
'''A Leap Ahead'''<br>
    Corporate Social Responsibilities become more and more important. This will be one of big new service offerings of consuting industries <br>
''Move towards e-consulting & automation'' <br>


7. [[Increasing gap in Intellectual Capital base of clients]] (PD)  <br>
- Commoditization of specific consulting services <br>
- Advancement of ICT and growth of emerging markets <br>
- Replacement of consulting services by machines <br>


8. Lack of talent and capacity issues of many firms (CR) <br>
==  Future of Consulting Scenario Tree ==
As the complexity and vagueness of job functions grow, it is starting to take larger amounts of time to find and train competent workers. This is leading to capacity issues in many firms that are forcing companies to fill these gaps through consultancies. <br>
[[Future of Consulting Scenario Tree]]
9. [[Move towards specialized client-consultant relationship]] (PD) <br>


10. Rising Intellectual Power of Emerging Markets (LS)
== Timelines ==


11. The Role of University Research (CR) <br>
[[Tradition Remains Timeline]] <br>
The relationship between consultancies and Universities has strengthened over time. Many great ideas that consultancies use come from University thinking and consultancies higher many professors and great minds from these universities. The relationship between these two play a large role in shaping the future of consultancy thinking.<br>


12. Openness of Information (CR) <br>
[[Inside out Innovation Timeline]]<br>
Depending on the level of openness of information moving forward, there may a convergence or divergence of consultancy firms and the need for consultants. If the level of information sharing opens up between consultanices, universities, companies, etc., we may see a convergence of consultancy firms between the so called "copy-cat firms" and the minority, but powerful, "Rocket Scientist Firms" (ie, McKinsey, BCG) and also a lessening of demand for consultants in general. However, if information between consultancies, universities and companies because more proprietary and closed, the gap between the "Rocket Scientists" and "Copy Cats" firms may diverge and the need for elite consultants grow.<br>


13. The Role of the Internal Consultant (CR) <br>
[[Collective Good Consulting Timeline]] <br>
Internal consultants are typically looked down upon, but an increase or decrease in the role of the internal consultant will have a profound impact on the necessity of external consultants. There is also a potential emergence of hybrid consultants. Technically external consultants, but only have 3-10 clients that are serviced for life. <br>


== Numbers that matter ==
[[A Leap Forward Timeline]] <br>


Numbers that matter in Consulting - global statistics for consulting industry:
== Scenario Stories ==


http://www.plunkettresearch.com/Industries/Consulting/ConsultingStatistics/tabid/177/Default.aspx  (LS)
[[Traditions Remains]]<br>


Global Consulting Industry Revenue (including HR, IT, strategy, operations management & business advisory services) equals 345 Billion US Dollars. (LS)<br>
[[Inside Out Innovation]] <br>
Management Consulting is by far the largest segment with $142.7B in 2008 (CR)<br>


-What is the fastest growing segment of consulting? IT? We should be able to find this out with numbers (CR)<br>
[[Collective Good Consulting]]<br>


[[A Leap Ahead]]<br>


Conor has idea on decreasing of US defense expense and put this money to feed the whole planet (IT)<br>
= Presentation feedback =


The official budget in  2010 for US defense spending is $533.8 Billion. If you include supplementary spending for the war in Iraq/Afghanistan that number jumps to somewhere between $880 billion and $1.03 trillion. (these are wiki numbers so I will have to confirm).
Like that you ask the audience questions <br>
Like the small vignettes that you used to demonstrate the scenarios ( not sure I know the scenarios) <br>
Like the causal diagram to explain what you were doing <br>
(see how a scenario works, in terms of showing a new world- when Joost said "O my God") <br>
Like the CFO/CEO discussion nice shift <br>
Good to conclude with outline <br>
Perhaps there is another standard scenario in the "normal" consulting space <br>
2nd scenario question should be framed also in terms of the technical challenges to realize this system <br>
Joost was discussing some interesting strategic responses to the challenges that the scenarios raise <br>


Basically, the US spends about 5% of GDP on defense where most other countries spend around 2-2.5%. So our thesis can be, "What America could do (or buy) if it decreased its defense spending to normal levels." That would mean cutting the US defense budget by half. So depending on what numbers we use it will be between $250 billion to $500 billion per year. My idea was to come up with a bunch of neat things the world could do with $250-$500 billion. Such as: lift x% of people out of poverty, give everyone in africa a laptop, etc. We could all come up with like 2 profound examples and tell the class. Let me know what you think. (CR).
= Main Learning Points =
- Investigating Fundamental Business Model of Consulting <br>
- General Trends of No Value, i.e. tracing the root of the symptom <br>
- Move away from obvious Assumptions <br>


== Research Questions ==
= Useful Resources =


1) What role does collectivism play in a consulting firm? <br>
Fiona Czerniawska and others on future of consulting:
2) What role does collectivism play in a consulting project? <br>
3) What is the scope of Inhouse/Internal consulting? <br>
4) Why there is a need for Inhouse/Internal consulting? <br>
5) What is a typical value stream in consulting industry? <br>
6) What are the various consultancy models? <br>
7) What are the various pricing models employed by consulting firms? <br>
8) What does knowledge sharing imply in a non-hierarchical organization? <br>
9) What is the role of emotional intellingence in consulting? <br>
10) What role will young generation play in strategy formulation? <br>
11) What is the average duration client engagement for top consulting firms? <br>
12) How consolidation of firms impact consulting industry? <br>
13) What role does boutique consulting firms play? <br>
14) Where does talent pool for consulting firms come from? <br>
15) What are the new potential regions of growth for consulting business to strive? <br>
16) How rapidly/slowly are non-US or non-European consulting global firms growing? <br>
17) What is the percentage of referral client for a typical consulting firm? <br>
18) What role does sales and marketing play for consulting firms? <br>
19) What are the drivers for growth in government and healthcare consulting? <br>
20) What role does Universities play for consulting firms? <br>
 
== Useful Resources ==


Fiona Czerniawska and others on future of consulting:
http://davidmaister.com/articles/24/ - David Maister - a deep perspective on the consulting world<br>
http://www.careers-in-business.com/consulting/hist.htm - History of consulting <br>
http://www.managementconsultingnews.com/- Features ideas and tools from leading thinkers, consultants, writers, and marketers<br>
http://www.scottberkun.com/blog/2008/thoughts-on-googles-20-time/ - A look at internal innovation programmes <br>
http://www.youtube.com/watch?v=soYKFWqVVzg - Interesting speech by Marissa Mayer about Google's innovation<br>
http://enrd.ec.europa.eu/app_templates/filedownload.cfm?id=B7288CC2-AAAF-2E2A-742A-040F3A77A56B Pros and cons of internal and external consultants<br>
http://www.time.com/time/business/article/0,8599,1917002,00.html Time article about the history of wikipedia<br>
http://www.zdnet.com/news/open-source-ibms-deadly-weapon/296366 Open source: IBM's deadly weapon<br>
http://www.internetnews.com/dev-news/article.php/3499276 IBM: Open Source is More Than Just Linux<br>
http://www.javaworld.com/community/node/3104 interesting article about starting a business with open source <br>


http://www.managementconsultingnews.com/
= Numbers that Matter Presentation =
[[Deforestation vs adult&drug tax]]

Latest revision as of 09:42, 9 September 2010

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