Consulting 2.0: Management consulting in the Web 2.0 era

The days of flying teams of business consultants to client sites, incurring the high costs of travel, and addressing problems with a glocal perspective are over. The old model of consulting is on the verge of extinction and the only people who seem to be unaware of this trend are management consultants themselves.

A classic business consulting model has Partners (or Executive Directors) who as the co-owners of the firm are in charge of both business development as well as new practice development. Below Partners, most firms have Principals or Associate Directors or Senior Managers who are typically owners of client engagement(s). This level has Managers reporting to them and these Managers are tasked with leading sub-project(s). And finally below the Managers is a set of (typically) 2 or 3 levels of consultants, analysts and associates.

The above hierarchy is "typical" but there are minor variations from firm to firm.

The reason I have called out this hierarchy is to draw the reader's attention to the cost of maintaining such a large team particularly at the base of the pyramid (Managers, Consultants, Analysts and Associates). Presumably clients value the experience brought by the senior profiles such as Senior Manager, Principals and Partners, but are loathe paying the high fees that are associated with the more senior profiles. Similarly, clients often times dislike having to deal with junior consultants or associates as they feel that they have no hands-on experience and are perceived to be learning at their cost whilst adding little value. And hence the numerous jokes on consultants and consulting. My take is that there are many interesting Web 2.0 applications that will over time reduce the need to have large teams particularly at the base of the pyramid.

Enough said, lets move on to key trends that IMHO will potentially impact management consulting as it is practiced today:-

1. Proposals: No longer do you need a large team to put together a proposal. With proposal generators such as BigMachines or Access Commerce, creating a proposal is a snap. Besides you can easily include standard sections to the proposal such as Terms and Conditions, Assumptions and Exclusions, Payment Details and Policies, Methodology, Credential packs, CVs of team members, etc.

2. Project Planning & Collaboration: Post winning an assignment, teams are tasked with putting in project control, plans and documentation. This activity used to be cumbersome as the biggest stumbling block was collaboration between geographically distributed team members and some times in conjunction with client staff. But with newer Web 2.0 project collaboration tools such as BaseCamp or Qtask, collaboration is greatly enhanced. These tools also track time and expenses on a client engagement. Besides video communication both internal and with client staff members is easier with Web based conferencing tools such as Microsoft Live Meeting, Cisco WebEx, Citrix GoToMyMeeting, Skype and more.

3. Research: Most consulting assignments include extensive research on client business (and industry, competitors). In the past, consultants made phone calls to gather various data points, scoured financial statements, industry reports, etc to extract useful information. With so much data freely available on the Web, using Web Harvesters, such data can be gathered quickly with minimal human intervention. Companies such as Mozenda, Fetch, Intelius and many others offer such SaaS solutions for gathering data from various sources automatically. Intelius & Fetch even apply this technology for interesting use cases such as candidate background check in a recruitment process. And using online services such as NomaDesk, Cisco WebOffice, Google Docs nomadic road warriors can easily access files and data.

4. Consulting Methodologies and Tools: Companies such as RapidBI have tools, PowerPoint templates and more that offer ready-made methodologies, process maps for various industry segments, training manuals, etc. Besides sources such as NetMBA, QuickMBA have detailed articles on various topics from Accounting to Business Law to Economics to Strategy and more as a ready reference.

5. Presentation Builders: Tools such as SAP's XCelsius, NetXpression, DemandTec Presentation Builder and Presentia offer a powerful and easy way to create compelling presentations with rich graphs and interactivity with minimal effort. Besides online resources such as SlideShare & Scribd offer presentations and documents that can be potentially re-used (if published by the author under a Creative Commons license).

6. Offshoring: Infosys Consulting is a great example of a business consulting company leveraging the offshore "Global Delivery" model to help reduce costs whilst maintaining the same high level of quality in deliverables and client experience. Typically a fairly slim team of on-site consultants is augmented with an offshore team in India leading to cost advantages. Even venerated consulting companies such as McKinsey & Co have offshore centers at lower cost countries such as India.

To wrap up, the Web 2.0 era is ushering in a new wave of Software as a Service (SaaS) applications that eliminate or definitely reduce the need for large teams. Consulting firms can focus on providing quality advisory services with more senior experienced professionals. IMHO, firms that recognize this trend will be able to leverage such tools and lower their costs and potentially pass on some of that benefit back to clients. Comments?