Future Of Technology Consulting


Its the last week of the year – and that gives me the luxury of time to spend thinking of some big picture topics. Last week I was Rethinking IOT and AI for future . And that led me to think of my own profession of technology consulting in future. Especially important to me since my 11 year old daughter wants to be in this profession when she grows up . She wrote this in her first grade journal – so it is official 🙂

IMG_5961

As always – these are just my personal points of view and do not represent the views of my employer.

Tech consulting is bound to get disrupted at least twice in my remaining professional life – with pendulum swinging first in the direction of flexibility, and then in the direction of convenience. That means the big and small companies that play in this ecosystems, and the assorted consultants that work in these companies are in for some crazy times. I would venture a guess that the first wave will be within 3 to 5 years, and the second one probably 7-10 years out from now.

When I joined consulting, the career option was pretty straight forward. If you were good at what you did , you can make Partner in about 10 to 15 years and then reap the benefits of that till you retire and then retire on a comfortable pension. Billing rates of $500 to $800 an hour did not raise many eye brows in those days. Well – that has changed for sure over my professional life !

When I hire new college grads these days, I see only a minority who have a career plan of sticking it out at a consulting firm for 10-15 years to make partner. Most of them plan to keep their options open to explore other careers along the way. When I hire for experienced roles – I increasingly see candidates who are from non consulting backgrounds wanting to try consulting for the first time. I also saw the reverse of this when I was in the software business for few years – many consultants (like me) wanted to gain exposure to software business. I am not a career channel management executive – but I had a great time establishing a channels business at MongoDB. In short – traditional career paths are dying and more and more people at all levels of their profession are vying for flexibility .

Interestingly – while employees have made the change in large part to this “flexibility first” mode, most employers are still in “traditional” mode. I believe the inherent difficulty for larger companies is how the financial market looks at them – risk taking is encouraged for small companies, and punished at larger companies. And changing the org model is fraught with short term risk by definition – so employers resist change in many ways. The more progressive ones encourage flexibility in hybrid models – take one day a week to do your own projects, put a consulting guy in charge of channels team, take a line sales leader out of the business and put her in charge of HR etc. They try to “force fit” employees with “new” ideas into “traditional” career paths. It does not seem to scale very well from my (admittedly limited) perspective.

At the moment, number of employees with such career attitude is not large enough – but in 3 to 5 years, I expect it to overwhelm and overpower organizations that a new paradigm will need to be built. And when overwhelming force is applied to organizations with a lot of inertia, the pendulum swings to an extreme. My bet will be that technology consulting firms will become master orchestrators that bring a tailored collection of skills to a client – even though majority don’t work for them directly. But this model has one inherent problem – elasticity is not your friend in labor based business.

So that means – tech consulting companies will need to shift their business model to be more of an IP based one. That needs new skills that historically were not important to these firms – like engineering, product management and product marketing at scale. A lot of existing roles will probably go into a “freelancer” system. Another way of saying it is – there will not be much difference from what is a product and what is a service. These lines will all get very fuzzy . A natural side effect will be acquisitions of product companies by tech consulting companies – at scale, unlike the handful that happens today !

The disruption this causes will be tremendous. Procurement function will need new ways of evaluating suppliers . Analysts and VCs/PEs will need new ways of assessing value of businesses. HR will need new ways of sourcing and developing talent. And so on . I won’t name names – but I have a list of tech consulting companies in mind that probably cannot deal with this and will end up in utter chaos at a minimum, or go out of business at worst. Yeah, I think it will be that dramatic (and I hate drama at work).

What happens next ? The way we deal with such chaos is usually to swing the pendulum in opposite direction. About couple of years into the chaos caused by this disruption – I totally expect leading companies to realize that for scale, some centralization is a must. Its like mainframes to client server to cloud to edge computing – centralization and decentralization happens back to back at intervals to keep the universe in balance. I don’t think the asset based nature of business itself will go away – but I do think the employees and employers will realize the pragmatic limits of autonomy and flexibility and make compromises.

But that still leaves the wild card – the power of automation to disrupt the disrupters. In this 10 years or so that I painted above – there is no saying how quickly automation can influence tech consulting’s business models fundamentally. The incremental changes are already well known – but as with every long term disruptive force, I would bet on us having under estimated the effect it has on our future.

Advertisements

8 thoughts on “Future Of Technology Consulting

  1. @Vijay, always love to hear your nuggets on consulting. I agree that 1) product and services will converge and it is very evident with brand names on the west coast. 2) Consulting firms investing in IP based business models will lead the pack in coming years. However, my guess is it will take longer than 5 years though. On a side note, it is great to see how much a first grader is influenced by dad’s aura (or should I say awesome profession!). Wishing you and your loved ones a very happy new year 2017!

    Like

  2. Pingback: Future of Project Management  | Vijay's thoughts on all things big and small

  3. The future of tech consulting is also 5-50 person company. As large tech employers refuse to match the ambition and pay to keep the great workers .

    Like

  4. Vijay, I agree with your thoughts as a whole but consider the effects of your predictions on currently-employed personnel. Those in their 30s will likely be able to adjust and continue some type of career on an upward path. The folks in their 40s will have a difficult time progressing and growing their income/value to employers. Those 50 and above and skilled for today’s technical consulting world may end up discarded along the way as they will be hard to reskill at their pay grade and unprepared (in many cases) for the retirement option it they planned to work to 60.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s