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Deep dive: Management consulting and analytics services leading trends in 2021

Join Practice Manager and Principal Analyst Patrick Heffernan, Principal Analyst Boz Hristov, Senior Analyst Elitsa Bakalova and Senior Analyst Kelly Lesiczka Thursday, Feb. 24, 2022, at 1 p.m. EST/10 a.m. PST for an in-depth analysis of leading trends in the IT services industry, such as vendor performance across regions, service lines and select verticals and the evolving value proposition as pent-up demand for run-the-business awards continues. The team will also do a deep dive into management consulting and analytics services segments.

Mark your calendars for Thursday, Feb. 24, at 1 p.m. EST,
and REGISTER to reserve your space.

Related content:

  1. Top 3 Predictions for IT Services
  2. Top 3 Predictions for Management Consulting

Click here to access more TBR webinars.

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2022 Predictions: IT Services, Management Consulting, Federal IT Services and Global Delivery


Join Practice Manager and Principal Analyst Patrick Heffernan, Principal Analyst Boz Hristov, Senior Analyst John Caucis, Senior Analyst Elitsa Bakalova and Senior Analyst Kelly Lesiczka for an in-depth look at TBR’s predictions for the IT services market, including management consulting, federal IT services and global service delivery, in 2022 as well as trends they expect to see during the year.

Don’t miss:

  • Services is still people, even as compelling new forces like environmental, social & governance initiatives and emerging technologies challenge IT services vendors  
  • Managing talent and restructuring and building decarbonization credentials will drive management consulting in 2022
  • Federal spending priorities shifting to favor civilian agencies
  • Fallout from the pandemic will lead to the most disruptive year in global delivery since the start of outsourcing

Mark your calendars for Thursday, Jan. 27, 2022, at 1 p.m. EST,
and REGISTER to reserve your space.

Related content: 

  1. Top 3 Predictions for IT Services 
  1. Top 3 Predictions for Management Consulting 
  1. Top 3 Predictions for Federal IT Services 
  1. Top 3 Predictions for Global Delivery 

Click here to access more TBR webinars.

WEBINAR FAQS

Top 3 Predictions for Management Consulting in 2022

The who, what and how of management consulting keeps changing and stays the same

Managing talent and restructuring and building decarbonization credentials will drive management consulting in 2022

Management consultancies traditionally stood at the top of the IT services pyramid, delivering advice, road maps and business cases for other vendors to follow, reaping the rewards of high margins and brand prestige. Pre-pandemic, disruption upended every business model across the technology spectrum, while consulting appeared to move along, unchanged since the first corporate board listened to advice from McKinsey & Co. In actuality, management consulting had been shifting from slides to software for years, with the pandemic accelerating those changes. The 2021 drivers and trends pushing change included managing and upskilling talent, restructuring to meet new client demands and bring new capabilities to the market, and jumping on the sustainability bandwagon. 

A note of caution: Even with all the changes in consulting since the spread of digital transformation, TBR believes most management consulting engagements center on traditional deliverables: road maps, business cases and strategic advice. In recent months, TBR has heard from consultancies and their clients about a resurgence in strategy consulting, perhaps stemming from a post-pandemic push to reorient to the future having made the operational and organizational changes necessary to survive 2020 and 2021.

Concurrently, IT services vendors and cloud and software giants have increasingly pushed into the consulting space, sometimes supplanting established management consultancies engaged in implementations and managed services. TBR does not believe this trend will result in significant management consulting market share being earned by the likes of Microsoft or Infosys, but the large-scale implementation and managed services engagements may include a wider mix of ecosystem partners delivering to the end client. In 2022 the management consultancies that navigate the rough and changing partnering landscape will outperform peers.  

2022 management consulting predictions

  • Expanded capabilities require expanded skills, leading consultancies to increasingly invest in education
  • Restructuring throes and woes will continue to constrain some management consultancies abilities to execute consistency
  • Sustainability booms for consultancies poised to measure, benchmark and report client progress

Send me a free copy of TBR’s Top 3 Predictions for Management Consulting in 2022

Telecom Business Research’s 2022 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud, telecom, devices, data center, and services & digital.

Management consulting and innovation centers: 3Q21 insights from TBR’s IT Services team

With the gradual shift to in-person engagements, clients have been challenging management consultancies to deliver more value and deliver change more quickly. Join Patrick Heffernan, Kelly Lesiczka and John Croll for an in-depth and exclusive discussion on 2021 expectations for both the management consulting market and vendors’ innovation and transformation centers.

Mark your calendars for Wednesday, July 7, 2021, at 11 a.m. EDT/8 a.m. PDT, and
register today to reserve your space.

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

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Vendors pursue tactical run-the-business engagements to help clients react to COVID-19 and maintain operations

Management consulting market summary

Outlook

The COVID-19 pandemic will continue to pressure discretionary spending and challenge vendors’ interactions with clients due to social distancing and travel restrictions. The vendors that will succeed are the ones that immediately adjusted their portfolios and service delivery models to accommodate clients’ pandemic-related run-the-business challenges and are now looking ahead to provide services to support clients in the post-pandemic world. TBR expects vendors to master the hybrid engagement model, navigate more smartly through the technology alliance ecosystem, deliver digital transformations and expand activities around decarbonization to recover ground lost in 2020.

Changes

Hybrid sales and service delivery, in which consultancies interact with clients both virtually and face-to-face, existed before the COVID-19 pandemic spread across the world in 2020; however, the dramatic difference from pre-pandemic days is the universal acceptance that hybrid engagements are a necessary and valuable way to conduct business. Vendors are now more adept at delivering services in person and remotely and have made collaborative technologies a natural extension of the job. Clients now receive services and adapt to different ways of working, recognizing that value in a services relationship can be sustained without face-to-face encounters. In 2021 IT services vendors and management consultancies that perfect the hybrid engagement model will outperform peers and accelerate consolidation across the IT ecosystem.

Market overview

TBR expects benchmarked vendors in the management consulting segment to increase revenue 0.9% year-to-year in 2020, a growth trend that will continue to surpass that of benchmarked IT services vendors in TBR’s IT Services Vendor Benchmark, which we expect to decrease 1.7% year-to-year in 2020. The Big Four vendor group will remain the largest revenue contributor at 55.2% of benchmarked revenue in 2020; however, strategy-led vendors will increase their market share by 50 basis points year-to-year to 28.6%. Solutions-led companies, the Big Four and strategy-led firms are all expanding their technology capabilities, intellectual property assets and managed services capabilities to address clients’ run-the-business needs with holistic capabilities.

Total Benchmarked Management Consulting Revenue 2015-2020E

The Management Consulting Benchmark provides key service line, regional, vertical and operational data and analysis for 13 leading management consulting firms. The research program also includes a deep dive into 11 vendors’ management consulting business strategies as well as SWOT analysis.

COVID-19 reveals true colors of creative advisory services

Regardless of whether the pandemic lingers, re-emerges with a greater power in the fall or significantly subsides, TBR expects management consultancies will benefit from opportunities created by the chaos of COVID-19 as vendors address clients’ tactical run-the-business needs and expand activities around digital workplace, change management, HR and supply chain operations. Vendors with greater scale, more established technology-centric brands, and deeper partnerships with cloud and software providers will weather the crisis and alleviate pressures on front-end management consulting by price-conscious clients that demand flexible payment terms. Meanwhile, the need for customer experience (CX)-centric workshops remains in flux, as what was the go-to-market approach just over nine months ago is now being recalibrated to account for limited physical and in-person sessions, impacting many of leading vendors’ design-led creative services performances.

Join Patrick HeffernanBoz HristovElitsa Bakalova and Kelly Lesiczka as they reveal key findings around leading management consulting vendors’ performance as well as how investments in marketing and creative services many of these vendors have pursued over the past five years are now playing out.

Don’t miss:

  • How major management consulting vendors performed during the first nine months of 2020
  • What the key trends are in the management consulting segments
  • How demand for CX-centric advisory sessions went from boom to bust and if it will come back in 2021

From boom to bust and back: COVID-19 changes dynamics of consulting-led digital transformation programs

Rising uncertainty from the global COVID-19 outbreak combined with competitive pressures in traditional and emerging IT service areas such as digital, cloud and cybersecurity is challenging IT services and management consulting vendors’ performance. The pandemic has driven massive changes in human resource management and is creating opportunities for IT services vendors to enable clients’ remote working models. Client retention amid this disruption and the global economic slowdown will be the single most important strategic imperative.

Join Patrick Heffernan, Bozhidar Hristov, Elitsa Bakalova and Kelly Lesiczka July 29 as they reveal key findings around leading IT services and management consulting vendors’ performance as well as evolving buyer expectations around service delivery and vendor consolidation.

Don’t miss:

  • Key trends in IT services and management consulting during the first half of 2020
  • Go-to-market strategies used to create new solutions
  • Enterprise sentiment toward digital transformation initiatives in the time of COVID-19

Even with slower growth, management consultancies should come through 2020 positioned to help clients weather disrupted digital transformations

Even with slower growth, management consultancies should come through 2020 positioned to help clients weather disrupted digital transformations

Management consulting market summary

Outlook

Regardless of whether the pandemic lingers, re-emerges in the second half of 2020 or significantly subsides, TBR expects consultancies will benefit from opportunities created by the chaos of COVID-19, such as uneven responses from government authorities around economic fallout, pandemic protocols and continued uncertainty throughout 2020. Vendors with greater scale, more established technology-centric brands, and deeper partnerships with cloud and software providers will weather the crisis and alleviate pressures on front-end management consulting by price-conscious clients that demand flexible payment terms. TBR expects management consulting revenue growth for the benchmarked vendors to decelerate to 3.5% year-to-year in 2020 but to continue to outperform revenue growth for the benchmarked IT services vendors.

Disruptors

Every part of the global economy, including the IT services and management consulting markets, are experiencing serious disruptions from the global COVID-19 outbreak. Countrywide lockdowns and changes in travel and personal interaction to limit the spread of the virus, have forced changes in human resource management for vendors and their clients, some short term and some likely permanent. Macroeconomic uncertainty due to the pandemic is pushing clients to re-evaluate their spending and shift their priorities from high-touch, large-scale strategic transformational discussions to tactical run-the-business and price-competitive managed services opportunities.

Overview

Benchmarked vendors in the management consulting segment increased revenue 7% year-to-year in 2019, a growth trend that continued to surpass that of benchmarked IT services vendors in TBR’s IT Services Vendor Benchmark, which expanded 1.9% year-to-year in 2019. The Big Four vendor group remained the largest revenue contributor at 55.8% of benchmarked revenue in 2019; however, strategy-led vendors increased their market share by 10 basis points year-to-year to 28%. Big Four and strategy-led firms are expanding their intellectual property assets and managed services capabilities to position as business advisers with holistic service capabilities.

The Management Consulting Benchmark provides key service line, regional, vertical and operational data and analysis for 13 leading management consulting firms. The research program also includes a deep dive into 11 vendors’ business strategies as well as SWOT analysis.

Vendors pursue tactical run-the-business engagements to help clients react to COVID-19 and relaunch business operations

Management consulting market summary

Outlook

Regardless of whether the pandemic lingers, re-emerges in the second half of 2020 or significantly subsides, TBR expects consultancies will benefit from opportunities created by the chaos of COVID-19, such as uneven responses from government authorities around economic fallout, pandemic protocols and continued uncertainty throughout 2020. Vendors with greater scale, more established technology-centric brands, and deeper partnerships with cloud and software providers will weather the crisis and alleviate pressures on front-end management consulting by price-conscious clients that demand flexible payment terms. TBR expects management consulting revenue growth for the benchmarked vendors to decelerate to 3.5% year-to-year in 2020 but to continue to outperform revenue growth for the benchmarked IT services vendors.

Disruptors

Every part of the global economy, including the IT services and management consulting markets, are experiencing serious disruptions from the global COVID-19 outbreak. Countrywide lockdowns and changes in travel and personal interaction to limit the spread of the virus, have forced changes in human resource management for vendors and their clients, some short term and some likely permanent. Macroeconomic uncertainty due to the pandemic is pushing clients to re-evaluate their spending and shift their priorities from high-touch, large-scale strategic transformational discussions to tactical run-the-business and price-competitive managed services opportunities.

Overview

Benchmarked vendors in the management consulting segment increased revenue 7% year-to-year in 2019, a growth trend that continued to surpass that of benchmarked IT services vendors in TBR’s IT Services Vendor Benchmark, which expanded 1.9% year-to-year in 2019. The Big Four vendor group remained the largest revenue contributor at 55.8% of benchmarked revenue in 2019; however, strategy-led vendors increased their market share by 10 basis points year-to-year to 28%. Big Four and strategy-led firms are expanding their intellectual property assets and managed services capabilities to position as business advisers with holistic service capabilities.

The Management Consulting Benchmark provides key service line, regional, vertical and operational data and analysis for 13 leading management consulting firms. The research program also includes a deep dive into 11 vendors’ business strategies as well as SWOT analysis.

Traditional ports and quantum computing: The now and the future

Principal Analysts Geoff Woollacott and Patrick Heffernan are each publishing a piece this week that touches on the business of digital transformation. Geoff focuses on the massive change expected from quantum computing as the business applications begin to catch up to the science. In his opinion, “Quantum is on the cusp of delivering economic advantage. The achievable impact is real today in what can be described as Horizon 1 application use cases. Horizons 2 and 3 will be as much a function of taking existing quantum algorithms that operate with a certain precision under the current fidelity of Noisy Intermediate-Scale Quantum (NISQ) Systems and applying them to different use cases requiring greater precision delivered from higher fidelity, and ultimately fault tolerant, quantum systems to deliver economic advantage to the activity in question.” Patrick’s blog looks at a specific use case for digital transformation, Port Oulu in Finland, where he notes, “a port like Oulu’s, which is both small enough to be manageable through a disruptive digital transformation and large enough to be replicative of a larger port’s ecosystem and challenges, could be an ideal place for connectivity and emerging technology vendors to experiment and prove out the use case for bringing one of the most fundamental infrastructure environments fully into the digital age.”

Additional assessments publishing this week from our analyst teams

DXC Technology’s leadership, headed by new CEO Mike Salvino, is actively pursuing strategic alternatives for three of DXC’s businesses — U.S., state and local health and human services; business process services; and workplace and mobility — that do not fit the company’s focused strategy for the future. DXC will leverage these three businesses, which account for roughly 25% of the company’s total revenue, to unlock value through potential divestitures to strategic or financial buyers or a spin-off.” —  Kevin Collupy, Analyst

Cisco Customer Experience expands its partner network, particularly with technology-led vendors, to incorporate hardware solutions and support contract generation around these solutions. Integrating automation capabilities will enable Cisco Customer Experience to maintain profitability while increasing the delivery range of solutions to new clients. We expect the company to continue strengthening its partner relationships to accelerate its portfolio transition; however, Cisco Customer Experience could face challenges differentiating its offerings from those of its peers, as they also leverage partner technologies to grow market share.” — Analyst Kelly Lesiczka

“With markets, portfolio offerings and people at the center of its Strategy 2025 initiative, BearingPoint is expected to continue to grow its management consulting revenue beyond 2019 and gain opportunities in its five segments of focus: data-driven banking operations, unified commerce, automotive operations, next-generation public services and digital twin business. BearingPoint is developing its organization in Europe and establishing the foundation for its business development in the U.S. to address growing client demand and enable European organizations to become global companies.” — Elitsa Bakalova, Senior Analyst