Global Forces and the Future of IT Consulting

Yesterday I read an article by McKinsey about the “Global forces shaping the future of business and society”. There was nothing special in the article, but one thing struck me, and not for the first time. Once again the current situation of IT as a branch or professional domain became evident. I could read the attitude of business-thinking people to technology, and the direction where IT goes.

The executives and partners interviewed in the paper talked about increasing agility and global connectedness, decreasing time to market, importance of readiness for ever changing frame and basis of market competition. And I could read between the lines the two trends speaking out loud and clear: commoditization of IT and integration of technology into business.

I saw it in my last research as well. From the interviews with 11 C-level managers, senior and principal consultants I could make several conclusions which come back again now. The interviewed experts mentioned that the new generation of executives is coming, much more familiar with contemporary technology and its possibilities. They want to talk about technology and what it means for business on the one hand. But on the other hand they are much more demanding and want their partners from IT to understand the business ways and to talk about the business value instead of technical details. The interviewees also explicitly mentioned the trends of IT commoditization, its integration in daily life and business and increased outsourcing trends.

So, what does it mean for IT consulting companies? It means that they would need more and more people capable of speaking the business language and understanding what is important for business managers, what is important for business development, while seeing the enablers brought by technological progress. I believe that it is quite a radical step for many IT consulting companies. Because, actually, this way of thinking pushes IT to the background and makes general business consulting or management consulting central. “IT doesn’t matter” – as Carr once already said. Not that many are ready to accept this paradigm.

You can see the proof of the trend in the current development of the strongest strategic consulting companies. McKinsey or BCG come to the “IT” areas and develop their departments dealing with IT. They recognize the opportunity and see that the niche of trusted advisor and strategic partner helping with conceptual technology questions is not filled adequately by existing IT consulting companies. Because those are more often perceived as just “commodity deliverers” or “service providers”.

Thus, the message for IT consulting is clear: stop thinking IT, start thinking business; and make business clients see and believe that this change has happened.

But what will happen with IT consulting companies deciding to stay in “commodity” area? I believe that their market will gradually shrink. If you look back at the McKinsey’s article and the global trends they foresee, you can say that the demand for developed-market productivity together with ever-expanding global networks will drive companies to further outsource the commodity activities, and often – not to the expensive western IT consulting players, but to the providers from emerging economies.