Consulting in 2022: Exploring the key themes
Published on February 10, 2022 by Sunny Mehta and Chetan Anand
The world has been waiting for the pandemic to end, and this year has been called “the year of revival and turnaround”, but the emergence of Omicron, a more contagious variant of COVID-19, has jeopardised this. Industry participants will likely continue to face sizeable challenges as they seek to realign core processes, tools, business models and strategic/operational approaches. Although the recovery may take longer than anticipated, we believe the following major trends will drive business revival and redefine the dynamics of consulting and advisory roles:
- Digitalisation leading to the emergence of new consulting tools and methodologies, and enhancing consultants’ competence
As a result of the unprecedented digital shift, more organisations are focusing on building robust ecosystems centred on technological innovation and changing business models. Clients are increasingly looking to consultants to bridge gaps in digital skills, boost innovation and build sustainable and ethical processes for developing technologies in response to disruption, in order to remodel their current business and operational models.
The accelerated pace of digitalisation and the advent of innovative new technologies have also led to the emergence of new digital tech-savvy consulting firms. A number of businesses now rely on independent consultants who offer a high-quality experience, flexibility and cost-effectiveness to help them overcome the post-pandemic critical business challenges they face due to constantly changing business needs. The digital shift makes it imperative that consulting firms, too, adopt new consulting approaches such as the “fail fast” concept, for more effective client servicing.
- Human capital development and talent retention the most pressing needs
The pandemic has led to a significant digital skills gap and the need for both consulting and non-consulting businesses to realign their workforce-related priorities. As the consulting industry grows, the key challenges consulting firms are likely to face include talent retention, motivation and skill development. Consulting and advisory firms would need to augment their talent pools through judicious outsourcing and enhancing capabilities, as demand for reskilled and upskilled employees is projected to grow as economies open. This would include value-driven, repeatable and explainable processes; executive dashboards to track KPIs; best-practice training for future use cases; and a comprehensive transition phase to ensure continued training.
- Growing demand for specialised consulting services
Companies are increasingly seeking more specialised services and closer client-consultant relationships. Many small and family-owned firms are engaging consultants to help them navigate the rapidly changing business environment introduced by digitalisation. Larger organisations are also adopting a more specialised approach to management consulting, segmenting demands into more specific niche areas for which they are now more likely to hire an expert consultant than a generalist. All industries now have a range of needs that require extensive specialised knowledge and experience. This is good news for niche or specialty consulting firms with expertise in catering to specific areas of business strategy and operations.
- Recognising the importance of strategic partnerships to recover from pandemic-related uncertainty
Many clients are now forming strategic alliances with consultants to mitigate risks. As a result of these collaborations, consulting firms would need to rethink their business models, shifting their focus away from billable hours and towards operating a scalable business model, such as a subscription service. Consultancies will likely continue to explore alliances with specialist firms, academic partners, digital agencies, and technology-focused businesses, to provide customers with more flexible and customised offerings. As clients seek integrated solutions to their management and IT demands, many consulting firms are developing agreements with software vendors, and telecom/communications firms to provide a broader range of services and increase their global reach.
- Focus on sustainability to be stronger than ever in 2022, with unprecedented demand for ESG considerations
As global economie¬¬s try to achieve net zero carbon emissions, businesses are focusing their operations on ESG policies to become more appealing to consumers, clients and investors. Decarbonisation is popular in a number of industries, particularly those that use a lot of energy. The need for strategy consulting in this space has spiked, with firms with expertise in sustainability solutions and sustainable energy transition well poised to lead this practice. Organisations are launching initiatives to address increasing demand for sustainable offerings, to position themselves as “leaders in the industry”. For example, McKinsey Sustainability is a new client-service platform designed by McKinsey & Company to help clients develop strategies to halve carbon emissions by 2030.
- Supply chain disruption and evolving consumer behaviour still the major consulting challenges
Pandemic-related uncertainty lingers and supply chain disruptions have fragmented the interconnected global economy. Consultants are entrusted the task of providing recommendations for improving supply chain models to reduce costs and ensure timely delivery. Rapid changes in consumer behaviour and consumption patterns, such as the rise of “hyper-local” business activity, are also pushing the consulting industry to reinvent consumer acquisition strategies.
Although the pandemic has been disruptive, it has led to new discoveries, the most notable and ground-breaking being the emergence of technology innovation or digitalisation as a crucial enabler. With technology innovation likely to remain at the heart of the post-pandemic recovery, organisations must keep digitalisation and virtualisation an overarching priority if they are to be well equipped for digital-centred engagements at all levels.
We expect the role of strategic advisory firms to increase in prominence as organisations strive to analyse, restructure and alter their work patterns and strategies in a post-pandemic environment. Consulting firms are well-positioned to help businesses manage business continuity, recover from setbacks and overcome people-centred challenges, structural obstacles and technology barriers in adverse business conditions.
How Acuity Knowledge Partners can help consultants
Our services are based on the triad of technology, research and data expertise, which ensures that the research we provide is technology-backed, based on exhaustive data points and driven by the best insights. Leveraging our proprietary technology solution, Business Excellence and Automation Tools (BEAT), and highly qualified professionals with deep expertise, who work with more than 200 global data providers, we provide our clients with unique assistance to innovate, implement transformation programmes, increase operational efficiency, manage costs and improve their top lines.
About the Authors
Sunny Mehta started his career with Acuity Knowledge Partners in 2007. During his tenure with Acuity, he has supported and managed several research engagements for consulting, private equity and investment banking clients across varied geographies. Sunny has been part of the Consulting practice for the past seven years. His current role involves providing support to consulting clients on a wide array of strategic and business research areas including competitive benchmarking, market opportunity assessment, M&A analysis and strategic evaluation of an investment opportunity. Sunny holds an MBA degree in Finance from New Delhi Institute of Management, besides a Bachelor’s degree in Commerce from Delhi University, India.
Chetan Anand has over ten years of experience in diverse areas, such as consulting research, private equity, and investment research. His expertise spans across several research themes including financial and operational analysis, business strategy, valuation analysis, investment screening, and due diligence studies, among others. At Acuity Knowledge partners, he is a part of Consulting practice, supporting a research engagement for a consulting client. Prior to Acuity Knowledge Partners, Chetan worked with a start-up firm, where he was involved in identifying and exploring various investment and financing opportunities for the company. Chetan holds a Bachelor’s degree from Indian Institute of Technology, Roorkee, India.