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 =


== Background ==
Problem owner: Joost Preyde (IT):<br>
 
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?


= Interview Questions =


Also: check out David Maister: http://davidmaister.com/articles/24/ for deep perspective on the consulting world.
[[Future of Consulting 2020 - Interview Questions & Answers]]


history of consulting: http://www.careers-in-business.com/consulting/hist.htm
= Driving Forces =


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


'''Starting Questions''' <br>
==Societal Driving Forces==
*[[Innovation]] (KL) <br>
*[[Rising need to co-create]] (PD) <br>
*[[Rising Intellectual Power of Emerging Markets]] (LS) <br>


1) What keeps you awake at night? <br>
==Technological Driving Forces==
2) What do you think are the key uncertainities? <br>
*[[Development of ICT, web 2.0]] (IT) <br>
3) What is your dream? <br>
*[[Globalization of companies]] (KL) <br>
4) What do you think drives the changes in consulting companies today? <br>
*[[Openness of Information]] (CR) <br>
*[[Automation of processes]] (LS) <br>


'''House of Performance related questions''' <br>
= Research Questions =


1) How do you differentiate your firm from other consulting firms and clients? <br>
[[Future of Consulting 2020 - 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>
=Scenarios=


1) Do you foresee any change in traditional organization structure of consulting firms? (Hierarchical/Flat/Hexagonal) <br>
==Systems Diagram==
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>
[[Future of Consulting 2020 First Draft]]


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


'''Emerging markets''' <br>
== Short Scenarios Description ==


1) Development of different markets for consultancy? <br>
'''Tradition Remains'''<br>
2) Development of big consulting companies which are non-US and non-European?
''Current consulting model remains the same''<br>


== Driving Forces ==
-Fear and validation remain an underlying motivation for hiring consultants<br>
-Relationships and trust continue to drive the consultancy model<br>
-Consultant-client relationship shifts to co-creation for innovation<br>


1. [[Global Economic Growth]]  (IT)
'''Inside Out Innovation'''<br>
''Innovation from within organizations''<br>


2. [[Development of ICT, web 2.0]] (IT)
- Creation of center of excellence + innovation center <br>
- Growing cycle dimishes external consulting <br>
- Attracting top talent to the organizations <br>


3. [[Demographics - increasing aging population]] (LS)
'''Collective Good Consulting'''<br>
''Open source & free consulting'' <br>


- All information in public domain <br>
- On-line collaboration based on non-fee <br>
- Reward through "virtual currency" - promotes free knowledge base <br>


4. [[Globalization of companies]] (KL)
'''A Leap Ahead'''<br>
''Move towards e-consulting & automation'' <br>


5. The growing trend and acceptance of outsourcing (CR) <br>
- Commoditization of specific consulting services <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.
- Advancement of ICT and growth of emerging markets <br>
- Replacement of consulting services by machines <br>


6. [[Environment]] (KL)
==  Future of Consulting Scenario Tree ==
[[Future of Consulting Scenario Tree]]


7. [[Increasing gap in Intellectual Capital base of clients]] (PD)  <br>
== Timelines ==


8. Lack of talent and capacity issues of many firms (CR) <br>
[[Tradition Remains Timeline]] <br>
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>
9. [[Move towards specialized client-consultant relationship]] (PD) <br>


10. [[Rising Intellectual Power of Emerging Markets]] (LS)
[[Inside out Innovation Timeline]]<br>


11. The Role of University Research (CR) <br>
[[Collective Good Consulting 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>
[[A Leap Forward 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>
== Scenario Stories ==
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>


14. [[Demographics - changing needs and demands of new generation at workplace]] (LS)
[[Traditions Remains]]<br>


Younger population not only has increased mobility and flexibility but also has much more choice. This creates problems for companies to retain the  top talent. This paeticularly is imporant for consulting industry as it begins to move towards long-term relationships with clients, rather than a one off deal. <br>
[[Inside Out Innovation]] <br>


== Numbers that matter ==
[[Collective Good Consulting]]<br>


Numbers that matter in Consulting - global statistics for consulting industry:
[[A Leap Ahead]]<br>


http://www.plunkettresearch.com/Industries/Consulting/ConsultingStatistics/tabid/177/Default.aspx  (LS)
= Presentation feedback =


Global Consulting Industry Revenue (including HR, IT, strategy, operations management & business advisory services) equals 345 Billion US Dollars. (LS)<br>
Like that you ask the audience questions <br>
Management Consulting is by far the largest segment with $142.7B in 2008 (CR)<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>


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


= Useful Resources =


Conor has idea on decreasing of US defense expense and put this money to feed the whole planet (IT)<br>
Fiona Czerniawska and others on future of consulting:


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).
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>
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).
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>
== Research Questions ==
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>
1) What role does collectivism play in a consulting firm? <br>
http://www.time.com/time/business/article/0,8599,1917002,00.html Time article about the history of wikipedia<br>
2) What role does collectivism play in a consulting project? <br>
http://www.zdnet.com/news/open-source-ibms-deadly-weapon/296366 Open source: IBM's deadly weapon<br>
3) What is the scope of Inhouse/Internal consulting? <br>
http://www.internetnews.com/dev-news/article.php/3499276 IBM: Open Source is More Than Just Linux<br>
4) Why there is a need for Inhouse/Internal consulting? <br>
http://www.javaworld.com/community/node/3104 interesting article about starting a business with open source <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://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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