Prof. Dr, Ard-Pieter de Man

  • He is an expert in the areas of alli­ances, networks, open inno­va­tion and part­nerships. He has many years of expe­ri­ence in consul­ting in the stra­tegy, inno­va­tion and orga­ni­sa­tion field and published over a dozen books and over fifty arti­cles on these topics. As Dean of Sioo is parti­cu­larly inte­re­sted in connec­ting the field of orga­ni­sa­tion design to the field of change manage­ment. How to design orga­ni­sa­tions to make it easier for them to change and adapt to ever chan­ging market demands is his core topic. At the VU Univer­sity Amsterdam he leads rese­arch projects in this field. He also teaches a course on Manage­ment Consul­ting.

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The consul­tancy sector is going through a period of intense change. Almost all existing consul­tan­cies are expe­ri­men­ting with new busi­ness models in order to meet the chan­ging demands of the busi­ness envi­ron­ment. In addi­tion, new players are ente­ring the market with comple­tely new ways of doing busi­ness. With rese­arch I’ve conducted with the help of David Seipl into 104 consul­tan­cies, I hope to point out why this is all happe­ning and iden­tify three domi­nant trends in busi­ness models.

Trends affec­ting consul­ting

Like many other sectors, consul­ting is affected by many trends. We’ve found that three, in parti­cular, have had a substan­tial impact on consul­tan­cies. The most important of these trends is the demand by clients for faster results. The speed of change in busi­ness is such that clients expect consul­tants to affect change imme­dia­tely. Linear consul­ting projects typi­cally consist of consul­tants first execu­ting a lengthy rese­arch project, then presen­ting an inter­me­diate report followed by the deve­lop­ment of a rede­sign before finally attemp­ting to imple­ment it. This does not fit with the current demand for speed, and new consul­tants are emer­ging as the answer this trend. One of these is Trans­pa­rency Lab, which o›ers easy online tools to diagnose orga­ni­sa­tional problems, tools that decrease the time consul­tants need for rese­arch and hence speed up consul­tancy projects.

Coming in at a close second is the trend toward increa­singly sophi­sti­cated demand. Clients have become more know­led­ge­able. They have to be. They are facing a more complex world and they are employing skilled former consul­tants to help them confront it. This ups the ante for consul­tants. With more consul­tants in-house, a firm’s internal exper­tise grows. External consul­tants there­fore are hired only for the truly complex projects, the ones that incor­po­rate the land­s­cape created by new tech­no­lo­gies, inter­na­tio­na­li­sa­tion and the complex regu­la­tory envi­ron­ment that engen­ders. This calls for consul­tants who are hyper­spe­cia­lized in esoteric niches. Such a hyper­spe­cia­lized consul­tancy is Flor­Part­ners, which advises coope­ra­tives of growers of flowers and fruit in green­houses: a very small and di£cult niche, but profi­table because Flor­Part­ners liter­ally knows ever­ything there is to know about this busi­ness.

The impact of tech­nical inno­va­tions completes the top three trends. Infor­ma­tion tech­no­logy is the big driver here. New ways of tech­no­logy deli­very – such as the cloud and ‘ever­ything as-a-service’ – have led to new demands being made of consul­tants. The use of infor­ma­tion tech­no­logy in the consul­ting process itself is an element of this trend. Big data and online consul­ting are chan­ging the way consul­tants orga­nise their own processes. A new type of company is emer­ging that deve­lops tech­no­lo­gical tools for consul­tan­cies to use. Concentra, for example, was founded by consul­tants and makes soft­ware that supports orga­ni­sa­tional rest­ruc­tu­ring and trans­for­ma­tion processes. With Concentra soft­ware, other consul­tan­cies can deliver higher quality at a greater speed and lower cost to the client.

New busi­ness models

The pres­sure of these trends has led to responses from consul­tan­cies, and our data has shown that three distinc­tive busi­ness models – colla­bo­ra­tive, conti­nuous, and instant – ´are deve­lo­ping to meet these new trends.

Colla­bo­ra­tive

In colla­bo­ra­tive consul­ting. we distin­guish three models: the closed network, the open network, and the virtual consul­tancy. In a closed network a fixed set of compa­nies colla­bo­rate repeatedly on client assign­ments. Other consul­tan­cies are allowed into the network only after an exten­sive selec­tion process. Solutio Consul­ting works in this way. Another example is Terra Nume­rata, the network Roland Berger is crea­ting to foster the deve­lop­ment of digital busi­ness models. The advan­tage of closed networks is that long-term and more inten­sive rela­ti­onships lead to more inten­sive know­ledge sharing, enable the deve­lop­ment of value propo­si­tions that deliver value in the longer run and make it easier to colla­bo­rate because people build up social capital.

Conti­nuous

The second model, conti­nuous consul­ting, often centres around data analy­tics and subscrip­tions. Consul­tan­cies may offer a variety of online tools, bench­marks or data­bases that clients can subscribe to. These tools are attrac­tive for clients to use repeatedly either because of their ease of use, the fact that they are up to date, or because they help with regu­larly occur­ring problems. Clearly, these services make the most of the trend of increased IT impact in the consul­ting busi­ness. The costs of gathe­ring infor­ma­tion on the internet or using internet-based tools have declined substan­ti­ally. The know­ledge of how to analyse data has increased as well, and deli­very of infor­ma­tion-based services has become easy. This means consul­tants can be engaged with a client on a conti­nuous basis, rather than on a project by- project basis. In this model, inter­ac­tion between client and consul­tant becomes more online than face to face, and subscrip­tion fees or pay-per-use models replace the hourly fee as the consultant’s source of income.

Instant

In instant consul­ting, consul­tants show their value to the client from day one or at least in a very short time span. The trai­ning and coaching firm, the Great Game of Busi­ness, is a nice example of this. By orga­ni­sing short running games, they are able to teach employees in a client company the basics behind finan­cial princi­ples. By applying what is learned in the form of a real-life game, the gains become clear very fast. Other forms of consul­ting that fall under this heading occur when consul­tants are involved in imple­men­ta­tion or interim manage­ment. This model clearly satis­fies the need of clients for faster results from consul­tants.

Classic consul­tancy

It is striking that in our rese­arch the clas­sical image of consul­tants is not domi­nant anymore. If we look at the tradi­tional leverage model (use of junior consul­tants, hourly fees, and focus on advice only), we find that only about 15% of the respondents work according to this model. The majo­rity have made changes in other elements of their busi­ness model, such as networ­king or using new tools to speed up value deli­very. It seems that in the more tradi­tional consul­tan­cies, changes to the busi­ness model are made by buil­ding on the existing situa­tion and making incre­mental changes on that.

Impli­ca­tions for clients

The impact of these models on the consul­tancy sector is clear. Clients, however, need to adapt as well. In parti­cular, they face three chal­lenges. The first is the legi­ti­macy chal­lenge. Many clients still prefer to hire a big brand consul­tancy with all exper­tise in-house, belie­ving this will give them more control over the consul­tants. And the added value of the big brand is that it provides legi­ti­macy: it is easier to ‘sell’ the advice of a global brand to board members, unions, and staff than it is to get them to accept the outcome of an as-yet little known networked consul­tancy. This makes it more diffi­cult for start-ups working with new busi­ness models to grow. The second chal­lenge is that the new busi­ness models demand a high level of know­ledge on the client side. Online consul­ting models require clients to formu­late very precise questions. They only work when clients are able to form their questions in a very focused way. Less know­led­ge­able and less expe­ri­enced clients may not be able to do so. A third obstacle is procu­re­ment poli­cies. Procu­re­ment poli­cies often impli­citly favour the tradi­tional model and do not always give new busi­ness models a fair chance. They do not allow for online consul­ting models for example or cannot deal with subscrip­tion models. In addi­tion, procu­re­ment depart­ments are not very know­led­ge­able about the diffe­rent consul­ting busi­ness models out there, with many clients still thin­king the hourly fee model is the only one avail­able. In conclu­sion, the outlines of new busi­ness models are clearly visible in the market, and further deve­lop­ment and growth in the direc­tion of networked, conti­nuous and instant consul­ting is to be expected. This will ulti­mately lead to new models that will not only benefit consul­tan­cies but also their clients. How fast these changes will occur will not only be dictated by consul­tan­cies, but also by clients’ accep­tance of new ways of working.

Prof. Dr, Ard-Pieter de Man

  • He is an expert in the areas of alli­ances, networks, open inno­va­tion and part­nerships. He has many years of expe­ri­ence in consul­ting in the stra­tegy, inno­va­tion and orga­ni­sa­tion field and published over a dozen books and over fifty arti­cles on these topics. As Dean of Sioo is parti­cu­larly inte­re­sted in connec­ting the field of orga­ni­sa­tion design to the field of change manage­ment. How to design orga­ni­sa­tions to make it easier for them to change and adapt to ever chan­ging market demands is his core topic. At the VU Univer­sity Amsterdam he leads rese­arch projects in this field. He also teaches a course on Manage­ment Consul­ting.

Want to get to know Prof. Dr, Ard-Pieter de Man?

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Still curious?
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