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?


= 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 =


==Systems Diagram==
==Economic Driving Forces==
[[File:Draft 1.jpg]]
*[[Global Economic Growth]] (IT) <br>
*[[Complex Business Environment]] (PD)  <br>
*[[The Role of the Internal Consultant]] (CR) <br>


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


'''Starting 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) What keeps you awake at night? <br>
= Research Questions =
: '' Nothing. Seem to have no worries. Wants to stick to his core values of creating an atmosphere of binding people. ''
2) What do you think are the key uncertainities? <br>
: '' How will cocreating work. Formulating together rather than leading. Young people to formulate strategies.''
3) What is your dream? <br>
: '' The company currently has 56 employees. Expand the company with people from diverse backgrounds. Grow the company bigger not in terms of profit but higher in value stream. ''
4) What do you think drives the changes in consulting companies today? <br>
: ''Internal consulting is going to drive the future. ''


'''House of Performance related questions''' <br>
[[Future of Consulting 2020 - Research Questions]]


1) How do you differentiate your firm from other consulting firms and clients? <br>
=Scenarios=
: ''Realize the strategy, increase performance and focus on achieving results.''
2) What is the recent successful project and failure? What caused the differences? <br>
: ''Failure - A late implementation of traffic crossings project because didn't follow all the steps. Though knew everything but took 4 months instead of planned 1 month.''
: ''Success - Feels successful if employee morale is boosted by good performance.''
3) How do you maintain delivery quality? <br>
: '' Focus on effective leadership, process control and employee behaviour.''


'''Changes within Consulting Industry''' <br>
==Systems Diagram==


1) Do you foresee any change in traditional organization structure of consulting firms? (Hierarchical/Flat/Hexagonal) <br>
[[Future of Consulting 2020 First Draft]]
: '' Doesn't see any change happening in leverage model. But thinks knowledge sharing within the firm is going to hold the key to future.''
2) Do you foresee any change in pricing model? (Value based pricing as against hour based pricing) <br>
: '' No. Doesn't believe in value based pricing since it is money driven rather than result driven.''
3) Do you foresee an emergence of Credit rating agency for consulting firms? (Similar to what we have for banking industry Moody's) <br>
: '' No. Rating doesn't indicate growth of a company. If employees are happy, same would be reflected in client's trust. ''
4) Any change in the business model with more young population? <br>
: '' Anticipating non traditional strategy formulation by young people ''
5) Do you foresee a consolidation trend in consulting industry? <br>
: '' No. Small and boutique firms are powerful with specific industry/problem focus.''
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>
: '' Healthcare has huge potential. Retail, Logistics and Government projects are increasing.''
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>
: '' Maintain long term relationships with other consulting firms. Work together. Either one stop shop or source it out to other consulting firms. ''


'''ICT in consulting''' <br>
[[Future of consulting 2020 - Final Diagram]]
: '' Is not a firm believer of ICT having a drastic impact on consulting.''
1) What is the role of ICT in the future of consulting? <br>
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>
: '' Emergence of new markets in China & India. Europe will have less focus.''
''Current consulting model remains the same''<br>
2) Development of big consulting companies which are non-US and non-European?


''' Other areas to focus - Role of universities in consulting '''
-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>


== Driving Forces ==
'''Inside Out Innovation'''<br>
''Innovation from within organizations''<br>


1. [[Global Economic Growth]]  (IT)
- Creation of center of excellence + innovation center <br>
- Growing cycle dimishes external consulting <br>
- Attracting top talent to the organizations <br>


2. [[Development of ICT, web 2.0]] (IT)
'''Collective Good Consulting'''<br>
''Open source & free consulting'' <br>


3. [[Demographics - increasing aging population]] (LS)
- 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>
- Advancement of ICT and growth of emerging markets <br>
- Replacement of consulting services by machines <br>


6. [[Importance of Sustainable Development]] (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>
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>


12. [[Openness of Information]] (CR) <br>
[[A Leap Forward Timeline]] <br>


13. [[The Role of the Internal Consultant]] (CR) <br>
== Scenario Stories ==


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>
Collectivism is crucially important for the consulting company as it helps to innovate. Many new ideas were created due to collective brainstorming. Also, it is allowed to manage the company effectively.
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>
2) What role does collectivism play in a consulting project? <br>
http://www.javaworld.com/community/node/3104 interesting article about starting a business with open source <br>
In a consulting project collectivism help to do the project more effectively as the work is splitted between consultants.
 
3) What is the scope of Inhouse/Internal consulting? <br>
Structurize business, develop stategy, check internal controls constantly.
 
4) Why there is a need for Inhouse/Internal consulting? <br>
It is cheaper and due to constant involvement it is considered to be effective in change management. Also consultants are much more familiar with the companies.<br>
 
5) What is a typical value stream in consulting industry? <br>
: '' A typical value stream comprises of following steps''
:* Knowledge building
:* Project setup
:* Strategy development/consulting
:* Implementation
 
6) What are the various consultancy models? <br>
:* Integrated consultancies - pyramid model (Big Four)
:* Strategy implementers - integrating IT with consulting (Accenture,IBM)
:* Knowledge builders - providing knowledge to consulting firms and businesses
:* Networkers - access to specialized network partners
 
7) What are the various pricing models employed by consulting firms? <br>
Consultants usually set charge per hour of their work or/and by project (also calculated on hourly basis estimated for the project). Sometimes firms set a fixed price per week/month. If consultants have to traqvel to clients site, travelling and living expenditures are usually counted in the price of the project. <br>
8) What does knowledge sharing imply in a non-hierarchical organization? <br>
9) What is the role of emotional intellingence in consulting? <br>
EQ has become extremely important in consulting, especially in the past years. Consultants have to be able to listen and win clients trust in order to form long-term relationships. Often consultants have to bring along change within the organization - that requires a good amount of emotional intelleligence. Also, since consultants often have to work with many people at clients site, it is vital that consultants possess EQ abilities.<br>
10) What role will young generation play in strategy formulation of a consulting company? <br>
Young people,especially MBAs come to consulting with bright up to date ideas and often 'out of the box' new thinking. Nevertheless, the younger population today are much more mobile, flexible and multilingual. Moreover, they  have a much larger choice. Such changes mean that companies need to find ways to retain top talent within the company and offer enough incentives and challenge for bright young people to stay with a company for long.<br>
11) What is the average duration client engagement for top consulting firms? <br>
Usually 3-4 months depending on the complexity of the project (McKinsey website)<br>
 
12) How consolidation of firms impact consulting industry? <br>
: ''Mergers and Acquisitions in an industry leads to growth of consulting services. But the trend is towards selecting a single consultancy for a longer contract.''
 
13) What role does boutique consulting firms play? <br>
.e., specialist) consulting firm. <br>
Successful boutiques are usually industry-focused(although sometimes they may be methodology-focused, or specialize in a single business function like operations or marketing), and could offer you the perfect job if you know what specific type of strategy work you are
interested in. (Vault Career Guide to Consulting) <br>
14) Where does talent pool for consulting firms come from? <br>
it comes mainly from universities, but also from the client side as people get more experience and are able to consult others<br>
15) What are the new potential regions of growth for consulting business to strive? <br>
Big consulting companies are looking at India, China, Brazil, Africa and Russia. It seems Africa is a controversial region since some believe it will take a while before the demand for consulting service starts to grow. <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>
around 60% of referrals considered to be average <br>
http://articles.techrepublic.com.com/5100-10878_11-5027467.html <br>
 
18) What role does sales and marketing play for consulting firms? <br>
http://www.managementconsultingnews.com/articles/collins_sell_firm_2.php <br>
 
19) What are the drivers for growth in government and healthcare consulting? <br>
20) What role does Universities play for consulting firms? <br>
Universities provide the majority of the human capital for consulting firms. Those that go into consulting from universities are attracted by their need for $, promotion, learning and growth. Another role for universities is that of idea generation. Many of the innovative ideas implemented in consulting firms either directly from university research or indirectly through employment of university human capital.
 
 
More Research <br>
1) AI - PD, LS <br>
2) e-Consulting - LS, CR <br>
3) [[external v/s internal consulting. growth of internal consulting]] - KL <br>
4) Future of collaboration of Univ and Consultants - CR <br>
5) [[Co-creation and new sources of ideas for consultant to analyze and for the client to solve the problem]] - PD, IT <br>
6) [[Methods of payment for consulting]] IT <br>
7) [[Specialization]] - KL <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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