IT disruptions drive spike in business consulting revenues

Posted by Mike Vizard on Jul 16, 2015 4:00:00 PM

business_disruptionA massive wave of IT disruption across the enterprise seems to be blowing good fortune in the direction of IT management consulting firms. This week, annual revenues for the 16 firms tracked in the Management Consulting Benchmark published by Technology Business Research (TBR) show an increase of 8 percent year over year.

Given the level of technology disruption currently roiling the enterprise, those increased revenues might only represent the tip of the proverbial iceberg. From an explosion in endpoint diversity in the form of smartphones, tablets and traditional PCs to the phenomenal number of servers and storage systems that are now routinely deployed in the cloud, just about every aspect of enterprise IT is being transformed.

The Uber Effect

At the same time, companies of all sizes find themselves threatened by rivals that never existed before. Using technologies that are readily available in the cloud, startup ventures with little to no capital requirements are transforming entire industries. In what's known as the “Uber Effect,” business leaders are turning to business consultants for strategic advice on how to make use of IT to enable their own digital transformations.The hope is that by making that transformation those organizations will both be able to defend their own revenue streams while simultaneously creating new ones that are derived from a strategic application of IT.

The TBR report estimates that in terms of revenue PWC, Deloitte, Ernst & Young, and KPMG, respectively, are the primary benefactors of this hunger for IT knowledge. In fact, thanks to the rise of the Internet of Things (IoT) and Big Data analytics, TBR estimates that revenues across the 16 business consulting firms it tracks will increase another seven percent in 2015.

Translating the impact of technology

Of course, all that consulting advice generates significant demand for IT products and services. The unfortunate truth about internal IT organizations is that they don’t have the business expertise needed to explain to the organization how best to go about applying IT to transform the business. From the perspective of the average business leader, most IT people might as well be speaking a foreign language. Traditionally, business consultants, albeit at a steep price, essentially provide a translation service that explains in layman terms what the technology can accomplish and how to apply it in a way that transforms an existing business model or enables a new one.

Of course, that’s not a particularly efficient way to transfer knowledge. There are increasingly larger numbers of millennials entering the workforce who are more IT savvy than their predecessors ever were. Many of these people don’t need someone dressed up in an expensive suit to tell them how to apply IT to achieve a better business outcome, and most of the startups that have emerged in recent years to upend entire industries don't make much use of business consultants either. But for the time being at least, business consultants will continue to play a strategic role inside most large enterprise IT organizations regardless of how often they might be simply stating to obvious rather than actually providing keen insights the business can’t afford to ignore. 

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Photo Credit: Tsahi Levent-Levi via Flickr.com. Used under CC 2.0 License

 

Topics: IT Services Trends

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