What do you think, I am not looking at pure play strategy like Bain, Booz and BCG etc, but the big system integration houses accenture, bearing point, IBM global services. They are struggling just like smaller pure tech plays like scient, viant and sapient did a few years back,a nd what sent many small companies to their graves.
Even now margins are razor thin, pipelines are at a trickle and lead conversion is weak.
so pure techies in web development, and coding etc have their issues, lessser are being faced by application conbsultants working on packaged app implementations..but it all seems weak in general.
would the glory days of consulting be back..with outsourcing manyof the lower level jobs are going, with closer integration between apps, as well as mergers and the move into consulting by software vendors as a part of their software sales, what does it mean for consulting companies.
or something new will come along and revive the industry to its former glory?
There will always be need for managment consultants. As an ex-Big Mcker, I have this debate with many who have spelled the doom of this industry. Large consulting firms survive based on age old practices of commisioned work, speacial projects, Industry events, etc. These corporate situations will continue to happen. Therefore the need for consultants. Outsourcing will make an impact ,but like everything else not the high-end stuff. Althoug, Mckinsey does cover Pan-Asian markets through India now.
I am in complete agreement with you that MCK, Bain, BCG and Booz (GCB) will not go out of style. the question was more regarding the big 5 types plus CSC etc. once ppl did not think that the new crop like scient and viant or razor fish etc will have any issues but they did. accenture and bearingpoint types are simply too diverse and too big to not be of value, but is the heyday of the big system integration firms behind them.
I had lunch with some accenture and bearing point buddies and it seems like more strategic groups are still doing okay but as u get deeper into technology the things are not too good.
I think the problem with the Scient and viant types was the hype of disruptive techs and e-motherload. This whole concept of if you build it they would come fell victim to the old traditional balance sheet mismangament of capital adequacy and growing too fast too big. I think these were opportunitistic ventures. If you look at their asset/debt ratios they were highly leveraged.
They almost belived an ever growing economy following a new set of rules. I think the Big-5 differed a bit. You can also add CSC, EDS and IGS to the Big-5 Model. Sure they took a beating but their businesses weren't as leveraged and fundamentals of of their corecompetencies didn't change much.
In early 2002, I was appraoched by an intermediary to help with an MBO of Scient. He had good assurance that the Board woulf go for it. We were going to bring the deal to an Indian IT firm, some capital infusion, hollow it out, sned the work offshore and have the front end for account and project amangement and sales and marketing. Needless to say, the deal did not go through because the buyer didn't want the assumption of debt. Which was over $300M. An interesting story.
I think the big strategy firms are going to have to change their models as well. There was a great article in the Economist about 2 yrs ago, when consulting finally hit bottom. I will try to locate it. Their assertion was that the way companies are manageed now due to the advent of new technologies, greater visibility of the market and globalization, the need for strategy firms to simply propose strategic retentiopn of marketshare or expansion and/or restructuring is obsolete. Plus the increase int eh number of MBA's int he market means that they can hire these talents right out o fschool, whereas before they were either destined to IB or Consulting. Now industry oiffers a safer environment.
But there are still very valid reasons to get a booze or McKinsey. Someone has to displace the blame. ;)
Whether it be business strategy or technology implementation, consultants have a vital and temporary role to perform. Howevr a majority of management use big-5 and the like as silver bullets. The consultants have to leverage 1 thinker for 100 hourlies and so do nothing to dispell the false expectations. You then end up with millions pissed off for "learnings".