Many centuries ago, one of the great Greek philosophers offered a profound thought - “there is nothing permanent except change”. The same can be said for most every industry including information technology – particularly BIG tech consulting. Across many industries, BIG tech has been one of the driving forces of corporate change over the past 20 years. But how will BIG tech consulting itself likely change over the coming years? What will instigate change inside BIG tech? That’s the unbiased topic of this blog.
How do I define BIG tech consulting? My definition of BIG tech is consulting and outsourcing corporations with 75,000+ employees which includes organizations like IBM, CGI, HP, Accenture, ATOS, Cap Gemini, BT, CSC, HCL, Wipro, and TCS. The aforementioned list of BIG tech consulting companies is only meant to be a representative list.
A Brief History Of BIG Tech Consulting
Indeed, the concept of the BIG tech consulting company was relevant and revered in an era when hardware and software was purposely distributed to remote devices and complex customization was seen as a business differentiator – not a detriment. Deploying distributed applications, particularly for large multi-national organizations, literally required small legions of geographically dispersed consultants. To further complement their offerings and achieve a predictable growth rate, many BIG tech consulting companies added outsourcing to their menu of services which also required a substantial workforce. Thus, not only could BIG tech consulting companies design, develop and deploy customized systems with its vast workforce, but they could also manage and operate the same systems. The end-to-end solution seemed ideal for many global enterprises.
Changing Market Dynamics And Demographics
What are the market dynamics that are likely to change BIG tech consulting? Undoubtedly there are many. I have chosen to highlight four key trends that most industry insiders do not like to discuss.
First, it’s generally more economical and/or faster for clients to buy ready-made hardware and software solutions (with some customization) than it is to design, develop and implement from scratch. The aforementioned is particularly true for back-end systems such as human resources and financial applications. Practically speaking, enterprises require fewer resources (and less BIG tech consulting) to implement commercial-off-the-shelf (COTS) solutions, especially SaaS which can be available after a few clicks and a credit card. For example, most enterprise organizations who need a customer relationship management (CRM) solution would likely evaluate a COTS solution such as Salesforce or Microsoft Dynamics before considering a ground-up development effort themselves. While enterprises may enlist the help of consultants to customize and deploy COTS solutions, the time and expense to design and develop such a solution is avoided. CRM is but one example.
Third, the age of consumer technology have given rise to the idea of service integration. For most of us who have smartphones, we have become quickly accustomed to downloading apps from the Apple’s iTunes or Google Play without giving much thought to the developer – albeit a 99 cent app. In a simplistic sort of way, smartphone users integrate their own set of apps to achieve a personalized result. On a much broader scale, the same will be true in the future for enterprise technology. Going forward, both public and private enterprises will pick and choose from a wide variety of specialized technology systems giving little thought to a proprietary vendor as was the case in the past 20 years. Like consumers, enterprise organizations will find a way to aggregate viable market choices in a systematic and aggregated approach. The change inside BIG tech companies and their entire value chains will be dramatic and swift.
Fourth and finally, workforce demographics together with rapidly improving consumer technology access will drastically change the BIG tech consulting services over time. Today’s college graduates were typically born after 1990 when access to the internet and computers were plentiful. Technology literacy is a prerequisite for receiving a degree from a credible college or university; similarly, organizations like Coursera are educating tens of thousands of technology students in a virtual classroom across the globe. Access to knowledge and information insight is proliferating at warp speed. Smartphone and tablet access have saturated the general public with over 1.1 billion 3G subscribers worldwide. In the United States alone, over 79% of the population has access to the internet; while that same percentage is much lower in China and India, the double digit growth rates will soon allow those, and other BRIC countries, to attain significant market penetration. BIG tech consulting originated at a time when everyone was NOT tech savvy – executives were required to rely on specialize expertise inside their IT departments. In the future, enterprise colleagues in the human resource department along with the sales department are likely to understand and manage technical requirements as well as those in their corresponding IT departments.
BIG Changes Ahead
Is there a future for BIG tech consulting? I believe the answer is yes. What do the changing market dynamics mean for BIG tech consulting? I offer three predictions.
First, the industry will consolidate. There are too many BIG tech companies with anemic growth chasing too few opportunities. Anemic growth is reflected in many of the stock prices of publically traded BIG tech consulting companies. Look for consolidation primarily across service lines (e.g. infrastructure services, BPO). BIG tech will be more accurately described as “BIG tech specialization”. I believe that a very small subset of existing BIG tech consulting organizations will survive in their current forms – the reason being is that large multi-national corporations will still need help with world-wide systems implementations.
Second, service integrators will slowly replace legacy “BIG” tech systems integrators. Tomorrow’s service integrators, whether internal or external, will select from an entire market array of specialized technology organizations in order to deliver the best solutions for their clients. The previously accepted practice of buying from a single BIG tech supplier will soon be, if not already, regarded as “old school”.
Third and finally, existing recipients (clients) of “BIG” tech consulting and outsourcing are likely to feel the “winds of change” in the coming years. Some of the winds will be no more than a passing storm; however for some clients, the “winds” will be hurricane force. The reason is straightforward, some of the existing BIG tech companies will slowly, or not, respond to the aforementioned changing market dynamics and demographics. The end results for BIG tech companies failing to change are likely to be unpleasant at best, especially for their clients. Clients can begin to mitigate risk by adapting a service integration approach that embraces multiple market choices with a well architected diversified portfolio of technology products and services.
Undoubtedly, BIG changes are in store for BIG tech. Most smooth talking BIG tech consulting executives selectively choose to dismiss some of these obvious trends due to self-preservation. My advice, existing and future clients of BIG tech consulting should proceed with caution. As you consider the topics that I briefly covered in this blog please consider the advice of Jack Welch, the legendary business leader of GE, “Change before you have to”.
Written on Monday, 21 January 2013 21:09 by John Rowe
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