Working in the world of strategic and digital consulting firms, agencies, and other companies dedicated to advising others, I have spent many years listening to and using messages such as:"the only constant is change, ""cannibalize your business from within the company before someone else does it from outside," "you have to focus on innovation constantly, and even more so when things are going well," andother similar phrases. All of these recommendations are correct and very necessary. But have these consulting firms applied their own theories when it comes to adapting to new times? As is almost always the case, some have and some haven't, which has significantly changed the landscape of the sector.
It is difficult to establish a very clear time frame in the professional services sector, but it is reasonable to think that the emergence of the Internet in the late 1990s was an extremely important historical moment for replacing, or at least rethinking, many of the business paradigms that existed previously. I also believe it is fair to place the acceleration of change around 2010, after the 2008 financial crisis. Although these changes always occur over relatively long periods of time and are multifactorial, from my point of view, this acceleration was greatly influenced by the change in strategy of some companies, with Accenture being the major reference point.
Delving a little deeper into the factors that I have observed over the last 15 years, which are responsible for this paradigm shift, cycle, sectoral model, or whatever we want to call it, there are some that, in my opinion, should be highlighted:
-
- The severe economic crisis of the years 2008-2011 which affected all companies and sectors, leading to the bankruptcy and disappearance of many small and medium-sized companies, and forcing larger companies to restructure their operating costs and question investments in new projects. This restriction in demand for professional services had a significant impact on the sector.
- The expansion of services as a trend. Thescope of service companies was changing, in many cases increasing their capabilities to include technology services, but also blurring boundaries that were traditionally very clearly separated, and creating a landscape in which traditional business consultancies offer creative services, technology companies want to sell strategy, advertising agencies go digital, etc. The boundaries between service companies have changed radically, and continue to do so.
- Accenture launched a very aggressive growth plan, both organic and inorganic, leading, amplifying, and accelerating change. In my opinion, the change in strategy arose somewhat by chance, when Accenture began to develop large technology platform projects for digital content management. There, it saw an opportunity to bring in marketing executives as probably the last customer it was missing from the management committees of large clients, and understood the business model of agencies well enough to retain a significant portion of those clients' marketing budgets. And when a leader moves and gains traction, it causes a domino effect.
- The various black swans of recent years (pandemic, inflation, energy crisis, war in Ukraine, etc.) have further increased risk aversion among large companies and led to a focus on short-term, data-driven results, maximizing the use of internal resources and/or external collaborators who can adapt to extremely efficient and flexible working models.
- The severe economic crisis of the years 2008-2011 which affected all companies and sectors, leading to the bankruptcy and disappearance of many small and medium-sized companies, and forcing larger companies to restructure their operating costs and question investments in new projects. This restriction in demand for professional services had a significant impact on the sector.
It is clear that the sector has been going through a difficult period for several years,constantly adapting (although this is something we could say about almost all sectors...), but it is also in these times of change that good opportunities arise.
In conclusion, professional services companies that respond to current market needs— short-term business orientation, flexibility in customer relationship models, competitive rates, network structures seeking the best answers both inside and outside their own organizations—while maintaining quality standards in project management and execution, will be the ones that emerge victorious. An interesting time, to be sure.
Photo by Andreas Klassen on Unsplash
