Misalignment: Is what consulting firms are selling what clients want to buy?
In the second half of 2020, we noticed a strange phenomenon. Clients were telling us how much they needed external support—but growth in the market didn’t reflect that, and it wasn’t until early 2021 that demand rebounded significantly. We’re seeing the same trend now—so what does it tell us?
First, the good news. In the second half of 2020, we saw a shift in clients’ overall expectations, with a greater proportion expecting to need more external support in the next year. This was, therefore, an early sign of a consulting market that was recovering from its COVID-induced paralysis: Clients, after months of operating hand-to-mouth, felt they could start to plan for the future. Happily, the same is true now: In our most recent research, based on around 1,600 respondents in the US, Europe, and Asia, 62% said that they expect to use more consulting support in the next 12 months. Anecdotally, demand is being driven by three main factors: Clients are looking for help transforming their technology, they want to grow their businesses (cost-cutting is no longer enough in this persistent polycrisis), and they’re looking for better solutions to the problems they face.
And now the bad news.
If we switch to asking clients where they plan to make most use of consulting support, the picture that emerges is one in which clients, while accepting they’re going to need help, don’t appear overwhelmed with enthusiasm for specific services.
Demand for technology-related services remains strong, with 31% of clients saying tech implementation is an area where they’re most likely to use consulting support, and 28% stating that they’ll need help adopting emerging technologies. Productivity improvement, which clients believe will be heavily dependent on the better use of technology, also does well, as do data & analytics, and cybersecurity. Just under a quarter of clients say that technology strategy will be a focus of investment, but this is significantly down on the 43% of clients who cited it last year. Interviews we’ve carried out with clients point to a very specific reason for this substantial drop: They feel they have done enough strategising and want to double down on implementation now.