Management consulting trends in 2021 will be shaped by the impacts of the Covid-19 pandemic. The subsequent worldwide recession is expected to result in a 14% downturn in the global management consulting industry in 2020, while the U.S. management consulting industry is expected to shrink by 15%. This is going to impact the industry moving into 2021, with a shift towards virtualization, value-based performance, and digital disruption, being only a few examples of trends expected to see significant acceleration. Below is a review of the expected trends and forces set to shape the management consulting industry in 2021.
1) Quantifiable Results
Despite the expected industry downturn caused by the unique combination of a pandemic and a global recession, many businesses will still seek help from consultants. While the trend to value-based performance isn’t new, it has been exasperated by the current climate. Firms hiring consultants in 2021 will expect to see tangible value from their investments, putting paid to previous fee-generating strategies, such as ‘land and expand’. Consultants will be expected to implement cost-effective solutions, instead of prioritizing expensive diagnosis. They will need to make sure that strategies are aligned with operational realities and that results are quantifiable in the eyes of their clients.
2) Strategic Partnerships
The uncertainty of the times has reinforced the requirement for strategic thinking and clients will continue to pay for consultants to work on contingency planning, scenario planning, and business strategy in 2021. However, many clients will look to share risk by entering into strategic partnerships with consultants, such as LevaData’s recent strategic partnership with Bain & Company to deliver next-generation supply management technology to manufacturers. Such partnerships will require consultancies to pivot their own business model, moving the focus from billable hours to operating a scalable business model, like a subscription service. Building on a trend from 2020, consultancies will also continue to seek partnerships with expert firms, such as Boston Consulting Group’s partnership with Microsoft to build the powerful data workbench Catalyst Cloud. Such partnerships will allow consultancies to provide more flexible and customized offerings to clients.
3) Remote Consulting
Remote working is something consultants are used to, with many already spending 80% of their working lives away from home, and remote working will continue into 2021. However, working with businesses engaging in remote working will require a fresh approach and, as a result, virtual consulting platforms will likely become widespread in 2021. Australian consulting firm Bendelta fast-tracked their virtual consulting platform, Reach, due to the pandemic, vouching that the 100% virtual and digital offering can deliver the same outcomes as physical consulting and training. Recruitment, while expected to remain strong in 2021 as consultancies eye an economic recovery, will also follow this trend with most interviews, internships, and MBA programs to be undertaken virtually.
4) Specialists in Everything
In the past, management consultancy firms have typically hired generalists and set them to work on all kinds of strategy and operations projects. The year 2021 will see clients requiring even greater specialist skills and knowledge from consultants, as well as a need for solutions that are tailor-made to their businesses. This is likely to see many consultants seeking to specialize in certain areas earlier in their careers, while recruitment will target candidates with expertise in a particular sector. KPMG UK already assesses its consultants against a framework that includes “sector expertise.” Consulting firms will place greater emphasis on hiring from established companies to recruit candidates with a ready-made specialism. Top firms will recruit the best employees from technology, retail, and manufacturing, among other industries, to act as experts in their field. Management consulting recruitment firm Totum Partners states that they have “been able to help many candidates transition successfully into the sector, from all sorts of backgrounds including retail, advertising, and the British Army.” Above all, consulting firms will seek to add specialists in digital and analytics services to their personnel, not least because technology companies represent some of the highest spenders on consultancy support.
5) Acceleration of Digital Disruption
Consulting 4.0, with its focus on technological developments and digitalization, has been a topic of discussion in consulting circles for a number of years. Boston Consulting Group recently highlighted the key role that digital disruption will play in business resilience, recommending that “in sectors where both the potential for digital disruption and the amount of financial distress are high, businesses should treat investing in digital resilience as a matter of urgency.” The firm’s Digital Acceleration Index survey allows companies to evaluate their digital maturity across 27 dimensions. Consultancies’ own digital delivery will expand beyond video conferencing and collaboration tools, with offerings designed using emerging technologies like no-code software and AI to create new digital methodologies that transform clients’ fundamental work processes. Consultancies will continue to develop digital teams, while analytics teams will analyze data beyond the numbers in Excel. Digital Transformation will be a prominent feature of 2021 with AI technology becoming more readily used to process, handle, and analyze huge amounts of data more efficiently and faster than the average human, paving the way for automated decision making, predictive analytics, and machine learning, while also being used to streamline administrative tasks and improve productivity.
The year 2021 will be all about survival, with one eye fixed firmly on thriving in the near future. Management consulting firms will seek to do this by exploring new business models and modes of delivery, such as strategic partnerships and virtual consulting platforms, while safeguarding recruitment through the introduction of virtual recruiting practices and virtual internship programs. Consultancies will seek to bring tangible value to their clients by employing sector specialists and utilizing advanced digital and analytical tools that transform client work processes and offer quantifiable results.