We’ve written before in this blog about Clayton Christensen’s article in the Harvard Business Review claiming consulting was on the cusp of disruption. That was 10 years ago—the cusp has lasted rather longer than expected—but I am starting to think it’s getting nearer. 

What do we mean by disruption? Christensen effectively defined it as the mass movement of customers from one supplier to another, encouraged by new technology (the iPhone) or a new business model (Uber). That’s hard to do in the consulting industry because the type of work is so varied. Yes, we can see that some parts of consulting—data gathering and visualisation on due diligence, for example—can be revolutionised by new technology, and that the management of a technology company’s digital rights can be transformed by providing not advice and recommendations, but a managed service. The way consulting firms work with senior business leaders on complex problems can be improved by embedding smart tools in the process, but the latter are point solutions to specific issues, stars in a consulting galaxy that’s remained fundamentally unchanged. And if we want proof of this, we need only look at the extent to which the big firms are getting bigger at the expense of countless smaller ones. No one has an approach that’s created a wholesale switch of clients from one major firm to another à la Uber.

But our on-going research, combined with numerous conversations with clients and professional firms is making me wonder if things are changing. Over the last 2-3 years, when we ask clients about the firms they might use for a given service, the number of different firms they list has increased and diversified. Incumbent firms still dominate—unquestionably—but other firms are appearing, and more often.

There are several possible reasons for this. Especially where large-scale projects are concerned, the decision about who to hire is being taken by a wider range of people on the client side. Some of these people will be experts in the area of the project and regularly work with external firms specialising the relevant space, but others will be those whose departments will be impacted and who don’t tend to hire external support in this area and may suggest non-specialists with whom they’ve had a good experience. The nature of the work may be being changed by technology: We’ve written elsewhere about the extent to which technology-enablement in the financial audit potentially opens the door to new, high-tech competitors, for instance. Clients’ experience of working with entrants may be different—the latter might work faster than incumbent players, for example. That starts to colour clients’ choices, slowly to begin with but exponentially over time as more clients have the experience of working with them.  

All of this has come to the fore due to Azets’ purchase of Baker Tilly’s accounting practice in Ireland. Azets was formed as a result of a three-way merger of Visma BPO, Blick Rothenberg, and Baldwins. It now boasts 160 offices, delivering accounting, tax, audit, business and advisory services in the UK and the Nordics, “digitally and at your door”. Not bad for a company that didn’t exist seven years ago.

If I was to find an analogy here, it’s a sense of barbarians—if I can unfairly characterise the new or renewed firms as such—massing. Not at the gates: These firms still some distance to travel, but certainly on the horizon.