Difference between revisions of "Future of Consulting 2020"

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Kiho Lee <br>  
Kiho Lee <br>  
Conor Ruff <br>  
Conor Ruff <br>  
Lidia Sholkova  
Lidia Sholkova <br>
= Background =
 
Problem owner: Joost Preyde (IT):<br>


== Background ==
Quote: "All progress depends on the unreasonable man. <br>


Joost Preyde (IT):<br>
quote: "All progress depends on the unreasonable man. <br>
Education:<br>
Education:<br>
1981-1985 Flight Engineering; 1985-1987 MBA<br>
1981-1985 Flight Engineering <br>
1985-1987 MBA <br>
Reading book now: Mojo: How to Get It, How to Keep It, How to Get It Back if You Lose It (so we can talk/ask him the most strange questions)
 


Work:<br>
Partner House of Performance (12 years)<br>
Consultant at Principal Consult<br>
Consultant at Alexander Proudfoot<br>
Marketing Sales B2B at Shell Chemical<br>
Reading book now: Mojo: How to Get It, How to Keep It, How to Get It Back if You Lose It
==Focal Issue==
How will Consulting industry evolve in next 10 years?


Also: check out David Maister: http://davidmaister.com/articles/24/ for deep perspective on the consulting world.
= Interview Questions =


history of consulting: http://www.careers-in-business.com/consulting/hist.htm
[[Future of Consulting 2020 - Interview Questions & Answers]]


== Interview Questions ==
= Driving Forces =


'''Starting Questions''' <br>
==Economic Driving Forces==
*[[Global Economic Growth]]  (IT) <br>
*[[Complex Business Environment]] (PD)  <br>
*[[The Role of the Internal Consultant]] (CR) <br>


1) What keeps you awake at night? <br>
==Societal Driving Forces==
: '' Nothing. Seem to have no worries. Wants to stick to his core values of creating an atmosphere of binding people. ''
*[[Innovation]] (KL) <br>
2) What do you think are the key uncertainities? <br>
*[[Rising need to co-create]] (PD) <br>
: '' How will cocreating work. Formulating together rather than leading. Young people to formulate strategies.''
*[[Rising Intellectual Power of Emerging Markets]] (LS) <br>
3) What is your dream? <br>
: '' The company currently has 56 employees. Expand the company with people from diverse backgrounds. Grow the company bigger not in terms of profit but higher in value stream. ''
4) What do you think drives the changes in consulting companies today? <br>
: ''Internal consulting is going to drive the future. ''


'''House of Performance related questions''' <br>
==Technological Driving Forces==
*[[Development of ICT, web 2.0]] (IT) <br>
*[[Globalization of companies]] (KL) <br>
*[[Openness of Information]] (CR) <br>
*[[Automation of processes]] (LS) <br>


1) How do you differentiate your firm from other consulting firms and clients? <br>
= Research Questions =
: ''Realize the strategy, increase performance and focus on achieving results.''
2) What is the recent successful project and failure? What caused the differences? <br>
: ''Failure - A late implementation of traffic crossings project because didn't follow all the steps. Though knew everything but took 4 months instead of planned 1 month.''
: ''Success - Feels successful if employee morale is boosted by good performance.''
3) How do you maintain delivery quality? <br>
: '' Focus on effective leadership, process control and employee behaviour.''


'''Changes within Consulting Industry''' <br>
[[Future of Consulting 2020 - Research Questions]]


1) Do you foresee any change in traditional organization structure of consulting firms? (Hierarchical/Flat/Hexagonal) <br>
=Scenarios=
: '' Doesn't see any change happening in leverage model. But thinks knowledge sharing within the firm is going to hold the key to future.''
2) Do you foresee any change in pricing model? (Value based pricing as against hour based pricing) <br>
: '' No. Doesn't believe in value based pricing since it is money driven rather than result driven.''
3) Do you foresee an emergence of Credit rating agency for consulting firms? (Similar to what we have for banking industry Moody's) <br>
: '' No. Rating doesn't indicate growth of a company. If employees are happy, same would be reflected in client's trust. ''
4) Any change in the business model with more young population? <br>
: '' Anticipating non traditional strategy formulation by young people ''
5) Do you foresee a consolidation trend in consulting industry? <br>
: '' No. Small and boutique firms are powerful with specific industry/problem focus.''
6) What is the future of consulting? What areas? (More specifically, where do you see consulting by 2020 and what trends? In which industry do you see the most growth potential by 2020? Why? <br>
: '' Healthcare has huge potential. Retail, Logistics and Government projects are increasing.''
7)Can it be like construction industry? One main big one stop shop developer get order and maintain all relationships with the client and outsorce specialized areas for small consulting companies who are experts in specific areas. <br>
: '' Maintain long term relationships with other consulting firms. Work together. Either one stop shop or source it out to other consulting firms. ''


'''ICT in consulting''' <br>
==Systems Diagram==
: '' Is not a firm believer of ICT having a drastic impact on consulting.''
1) What is the role of ICT in the future of consulting? <br>
2) Based on ICT changes, do you foresee any standardization happening in consulting industry? <br>


'''Emerging markets''' <br>
[[Future of Consulting 2020 First Draft]]


1) Development of different markets for consultancy? <br>
[[Future of consulting 2020 - Final Diagram]]
: '' Emergence of new markets in China & India. Europe will have less focus.''
2) Development of big consulting companies which are non-US and non-European?


''' Other areas to focus - Role of universities in consulting '''
== Short Scenarios Description ==


== Driving Forces ==
'''Tradition Remains'''<br>
''Current consulting model remains the same''<br>


1. [[Global Economic Growth]]  (IT)
-Fear and validation remain an underlying motivation for hiring consultants<br>
-Relationships and trust continue to drive the consultancy model<br>
-Consultant-client relationship shifts to co-creation for innovation<br>


2. [[Development of ICT, web 2.0]] (IT)
'''Inside Out Innovation'''<br>
''Innovation from within organizations''<br>


3. [[Demographics - increasing aging population]] (LS)
- Creation of center of excellence + innovation center <br>
- Growing cycle dimishes external consulting <br>
- Attracting top talent to the organizations <br>


4. [[Globalization of companies]] (KL)
'''Collective Good Consulting'''<br>
''Open source & free consulting'' <br>


5. [[The growing trend and acceptance of outsourcing]] (CR) <br>
- All information in public domain <br>
- On-line collaboration based on non-fee <br>
- Reward through "virtual currency" - promotes free knowledge base <br>


6. [[Importance of Sustainable Development]] (KL)
'''A Leap Ahead'''<br>
''Move towards e-consulting & automation'' <br>


7. [[Increasing gap in Intellectual Capital base of clients]] (PD)  <br>
- Commoditization of specific consulting services <br>
- Advancement of ICT and growth of emerging markets <br>
- Replacement of consulting services by machines <br>


8. [[Lack of talent and capacity issues of many firms]] (CR) <br>
==  Future of Consulting Scenario Tree ==
[[Future of Consulting Scenario Tree]]
9. [[Move towards specialized client-consultant relationship]] (PD) <br>


10. [[Rising Intellectual Power of Emerging Markets]] (LS)
== Timelines ==


11. [[The Role of University Research]] (CR) <br>
[[Tradition Remains Timeline]] <br>


12. [[Openness of Information]] (CR) <br>
[[Inside out Innovation Timeline]]<br>


13. [[The Role of the Internal Consultant]] (CR) <br>
[[Collective Good Consulting Timeline]] <br>


14. [[Demographics - changing needs and demands of new generation at workplace]] (LS)
[[A Leap Forward Timeline]] <br>


Younger population not only has increased mobility and flexibility but also has much more choice. This creates problems for companies to retain the  top talent. This paeticularly is imporant for consulting industry as it begins to move towards long-term relationships with clients, rather than a one off deal. <br>
== Scenario Stories ==


== Numbers that matter ==
[[Traditions Remains]]<br>


Numbers that matter in Consulting - global statistics for consulting industry:
[[Inside Out Innovation]] <br>


http://www.plunkettresearch.com/Industries/Consulting/ConsultingStatistics/tabid/177/Default.aspx  (LS)
[[Collective Good Consulting]]<br>


Global Consulting Industry Revenue (including HR, IT, strategy, operations management & business advisory services) equals 345 Billion US Dollars. (LS)<br>
[[A Leap Ahead]]<br>
Management Consulting is by far the largest segment with $142.7B in 2008 (CR)<br>


-What is the fastest growing segment of consulting? IT? We should be able to find this out with numbers (CR)<br>
= Presentation feedback =


Like that you ask the audience questions <br>
Like the small vignettes that you used to demonstrate the scenarios ( not sure I know the scenarios) <br>
Like the causal diagram to explain what you were doing <br>
(see how a scenario works, in terms of showing a new world- when Joost said "O my God") <br>
Like the CFO/CEO discussion nice shift <br>
Good to conclude with outline <br>
Perhaps there is another standard scenario in the "normal" consulting space <br>
2nd scenario question should be framed also in terms of the technical challenges to realize this system <br>
Joost was discussing some interesting strategic responses to the challenges that the scenarios raise <br>


Conor has idea on decreasing of US defense expense and put this money to feed the whole planet (IT)<br>
= Main Learning Points =
- Investigating Fundamental Business Model of Consulting <br>
- General Trends of No Value, i.e. tracing the root of the symptom <br>
- Move away from obvious Assumptions <br>


The official budget in  2010 for US defense spending is $533.8 Billion. If you include supplementary spending for the war in Iraq/Afghanistan that number jumps to somewhere between $880 billion and $1.03 trillion. (these are wiki numbers so I will have to confirm).
= Useful Resources =


Basically, the US spends about 5% of GDP on defense where most other countries spend around 2-2.5%. So our thesis can be, "What America could do (or buy) if it decreased its defense spending to normal levels." That would mean cutting the US defense budget by half. So depending on what numbers we use it will be between $250 billion to $500 billion per year. My idea was to come up with a bunch of neat things the world could do with $250-$500 billion. Such as: lift x% of people out of poverty, give everyone in africa a laptop, etc. We could all come up with like 2 profound examples and tell the class. Let me know what you think. (CR).
Fiona Czerniawska and others on future of consulting:
 
== Research Questions ==
 
1) What role does collectivism play in a consulting firm? <br>
Collectivism is crucially important for the consulting company as it helps to innovate. Many new ideas were created due to collective brainstorming. Also, it is allowed to manage the company effectively.
 
2) What role does collectivism play in a consulting project? <br>
In a consulting project collectivism help to do the project more effectively as the work is splitted between consultants.
 
3) What is the scope of Inhouse/Internal consulting? <br>
Structurize business, develop stategy, check internal controls constantly.
 
4) Why there is a need for Inhouse/Internal consulting? <br>
It is cheaper and due to constant involvement it is considered to be effective in change management. Also consultants are much more familiar with the companies.<br>
5) What is a typical value stream in consulting industry? <br>
6) What are the various consultancy models? <br>
7) What are the various pricing models employed by consulting firms? <br>
Consultants usually set charge per hour of their work or/and by project (also calculated on hourly basis estimated for the project). Sometimes firms set a fixed price per week/month. If consultants have to traqvel to clients site, travelling and living expenditures are usually counted in the price of the project. <br>
8) What does knowledge sharing imply in a non-hierarchical organization? <br>
9) What is the role of emotional intellingence in consulting? <br>
EQ has become extremely important in consulting, especially in the past years. Consultants have to be able to listen and win clients trust in order to form long-term relationships. Often consultants have to bring along change within the organization - that requires a good amount of emotional intelleligence. Also, since consultants often have to work with many people at clients site, it is vital that consultants possess EQ abilities.<br>
10) What role will young generation play in strategy formulation of a consulting company? <br>
Young people,especially MBAs come to consulting with bright up to date ideas and often 'out of the box' new thinking. Nevertheless, the younger population today are much more mobile, flexible and multilingual. Moreover, they  have a much larger choice. Such changes mean that companies need to find ways to retain top talent within the company and offer enough incentives and challenge for bright young people to stay with a company for long.<br>
11) What is the average duration client engagement for top consulting firms? <br>
Usually 3-4 months depending on the complexity of the project (McKinsey website)<br>
12) How consolidation of firms impact consulting industry? <br>
13) What role does boutique consulting firms play? <br>
Insiders agree that the future of consulting
Successful boutiques are usually industry-focused(although sometimes they may be methodology-focused, or specialize in a single business function like operations or marketing), and could offer you the perfect job if you know what specific type of strategy work you are
interested in. <br>
14) Where does talent pool for consulting firms come from? <br>
it comes mainly from universities, but also from the client side as people get more experience and are able to consult others<br>
15) What are the new potential regions of growth for consulting business to strive? <br>
Big consulting companies are looking at India, China, Brazil, Africa and Russia. It seems Africa is a controversial region since some believe it will take a while before the demand for consulting service starts to grow. <br>
16) How rapidly/slowly are non-US or non-European consulting global firms growing? <br>
17) What is the percentage of referral client for a typical consulting firm? <br>
around 60% of referrals considered to be average <br>
http://articles.techrepublic.com.com/5100-10878_11-5027467.html <br>
 
18) What role does sales and marketing play for consulting firms? <br>
19) What are the drivers for growth in government and healthcare consulting? <br>
20) What role does Universities play for consulting firms? <br>
 
 
More Research <br>
1) AI - PD, LS <br>
2) e-Consulting - LS, CR <br>
3) external v/s internal consulting. growth of internal consulting - KL <br>
4) Future of collaboration of Univ and Consultants - CR <br>
5) [[Co-creation and new sources of ideas for consultant to analyze and for the client to solve the problem]] - PD, IT <br>
6) [[Methods of payment for consulting]] IT <br>
7) Specialization - KL <br>
 
== Useful Resources ==


Fiona Czerniawska and others on future of consulting:
http://davidmaister.com/articles/24/ - David Maister - a deep perspective on the consulting world<br>
http://www.careers-in-business.com/consulting/hist.htm - History of consulting <br>
http://www.managementconsultingnews.com/- Features ideas and tools from leading thinkers, consultants, writers, and marketers<br>
http://www.scottberkun.com/blog/2008/thoughts-on-googles-20-time/ - A look at internal innovation programmes <br>
http://www.youtube.com/watch?v=soYKFWqVVzg - Interesting speech by Marissa Mayer about Google's innovation<br>
http://enrd.ec.europa.eu/app_templates/filedownload.cfm?id=B7288CC2-AAAF-2E2A-742A-040F3A77A56B Pros and cons of internal and external consultants<br>
http://www.time.com/time/business/article/0,8599,1917002,00.html Time article about the history of wikipedia<br>
http://www.zdnet.com/news/open-source-ibms-deadly-weapon/296366 Open source: IBM's deadly weapon<br>
http://www.internetnews.com/dev-news/article.php/3499276 IBM: Open Source is More Than Just Linux<br>
http://www.javaworld.com/community/node/3104 interesting article about starting a business with open source <br>


http://www.managementconsultingnews.com/
= Numbers that Matter Presentation =
[[Deforestation vs adult&drug tax]]

Latest revision as of 09:42, 9 September 2010

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