WEBINAR The Future Of Consulting Through 2020 Marc

WEBINAR The Future Of Consulting Through 2020 Marc Cecere, Vice President, Principal Analyst April 5, 2016. Call in at 10: 55 a. m. Eastern time

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Agenda › What is driving changes in consulting? › What will the future of consulting look like? › What are the implications for consulting in 2020? © 2016 Forrester Research, Inc. Reproduction Prohibited 4

Notes › This is the first of a two-part research project. › Part 1 — what will consultancies look like in 2020 › Part 2 — specific investments made by leading firms © 2016 Forrester Research, Inc. Reproduction Prohibited 5

Agenda › What is driving changes in consulting? › What will the future of consulting look like? › What are the implications for consulting in 2020? © 2016 Forrester Research, Inc. Reproduction Prohibited 6

How will business and IT departments use management/business consultants (next 12 months): Base: 695 IT decision-makers and 548 business decision-makers; Source: Forrester’s Global Business Technographics® Business And Technology Services Survey, 2015 © 2016 Forrester Research, Inc. Reproduction Prohibited 7

Most important criteria to the IT department/business unit for selecting a third-party business/management consultant Consultancies are expected to be balanced. . . and within a price range. Base: 1, 198 IT decision-makers and 946 business decision-makers; Source: Forrester’s Global Business Technographics® Business And Technology Services Survey, 2015 © 2016 Forrester Research, Inc. Reproduction Prohibited 8

Digital is driving many of the changes › Cloud is changing technical needs. › Clients expect greater speed of delivery. › Clients need consultants to understand their customers. “The implications of digital change are much more enterprisewide — and therefore catastrophic if they don’t get it right. ” › Complex global transformations will increase. › Clients are more sophisticated. © 2016 Forrester Research, Inc. Reproduction Prohibited (Renee Borkowski, GVP of strategy, Razorfish) 9

Agenda › What is driving changes in consulting? › What will the future of consulting look like? › What are the implications for consulting in 2020? © 2016 Forrester Research, Inc. Reproduction Prohibited 10

Six themes of consulting in 2020 1. Traditional, high-revenue, technical work will shrink and change. 2. Asset-based consulting will change revenue and delivery models. 3. Projects will be smaller, global, more virtual, and will use centers. 4. Pure strategy projects with static deliverables will shrink rapidly. 5. Organizational change management will become a science, enhanced by data and software. 6. Contracts will shift incrementally to gain sharing, licenses, and retainers (probably). © 2016 Forrester Research, Inc. Reproduction Prohibited 11

Design, integration, and specialized consulting areas grow; technical areas decrease.

Post the legacy bump, projects will change › Fewer large legacy projects, greater use of cloud, and less coding/more packages › Differentiation through business model and customer experience design and highly specialized areas in analytics, security, mobility, and AI › Consulting entry points that need to expand past IT › Career paths and motivators that need to support individual contributors and specific groups › The pyramid project and org structure will give way to a diamond. © 2016 Forrester Research, Inc. Reproduction Prohibited “Currently, there is a lot of transformation workaround legacy systems, but over time, as that work gets completed, those projects will go away. ” (Dinesh Dhanasekharan, CTO, Excelacom) 13

Asset-based (prefab) consulting will automate many consulting activities.

Prefab consulting is rapidly increasing › Those that invest in reusable assets will distance themselves from those that don’t, particularly small firms. › Prefab consulting will reduce project size and duration. › Self-service will take bites out of projects. › Data, not methodology, will drive consistency. © 2016 Forrester Research, Inc. Reproduction Prohibited “The consulting world is increasingly moving toward more prefabrication, where services can be deployed rapidly. ” (Shanker Ramamurthy, global managing partner, IBM) 15

And on-demand consulting is inevitable › Cx. Os often need immediate short answers. › One package — 100 hours of data science with one day turnaround › Mc. Kinsey & Company extends this to external partners; KPMG Spectrum to 24/7 › Access, context, and relevance are the key challenges, being met by tech and processes. © 2016 Forrester Research, Inc. Reproduction Prohibited “All labor in the future will be on -demand, as a service” (Confidential source) 16

Delivery will be agile and collaborative, relying on methods, tools, data, and a mix of locations.

Changes in delivery will result in: › Smaller, cross-disciplinary project teams with higher seniority and specialization. › A mixed use of onsite teams, centers, and virtual workgroups. › Greater use of external partners for those who can access and manage them efficiently. “Senior consultants have to be skilled in multiple areas because clients cannot look at digital transformation in isolation — they must evaluate their entire operations model and the processes aligned to that. ” (Doug Mc. Cuaig, EVP of global client transformation services, CGI) © 2016 Forrester Research, Inc. Reproduction Prohibited 18

Strategy will merge with implementation.

Opportunities for pure strategy are shrinking › Even strategy work requires knowledge of delivery. › Strategy firms will acquire delivery assets. › Digital strategy demand gives technology and small - and midsize firms an opening. “Digital business transformation is a huge opportunity because it gives us the change to guide customers on strategy and IT and is a generator of technical projects” (David Wainwright, Prodyna) © 2016 Forrester Research, Inc. Reproduction Prohibited 20

Career paths and internal structures will change dramatically.

Hiring and retaining is changing › Using traditional and nontraditional means › Skews toward tech (architecture and data) less MBA types › Up or out is giving way to deeper expertise. › The number of career paths has broadened significantly. “We are hiring and retaining people who can bring consulting, tech, and consumer expectations expertise together. ” (Confidential source) © 2016 Forrester Research, Inc. Reproduction Prohibited

Contracts will shift (modestly? ) to gain sharing, licenses, and retainers.

› Prefab, clouds, and data are reducing uncertainty. › Modest growth in gain-sharing contracts. . . maybe › Increased license, subscription, retention, and equity contracts for specific activities “The consultant’s dream is to have an ongoing revenue stream not tied to billable hours. ” (Kyle Montgomery, global managing partner, Clarkston Consulting) © 2016 Forrester Research, Inc. Reproduction Prohibited

Agenda › What is driving changes in consulting? › What will the future of consulting look like? › What are the implications for consulting in 2020? © 2016 Forrester Research, Inc. Reproduction Prohibited 25

The next five years will be the change in consulting that’s been talked about › Consultancies will pull away from the pack when they: • Capture reusable IP. • Use data and machine learning. • Restructure hiring and retention paths. • Mix delivery mechanisms. • Show contract flexibility. © 2016 Forrester Research, Inc. Reproduction Prohibited 26

Thank you Marc Cecere +1 617 -448 -6829 mcecere@forrester. com

1. Traditional, high-revenue, technical work will shrink. 2. Asset-based consulting will change revenue and delivery models. 3. Projects will be smaller, global, and more virtual and will use centers. 4. Pure strategy projects with static deliverables will shrink rapidly. 5. Organizational change management will become science, enhanced by data and software. 6. Contracts will shift incrementally to gain sharing, licenses, and retainers. © 2016 Forrester Research, Inc. Reproduction Prohibited Hiring, retention, and career paths Delivery models Prefab consulting Internal model changes Changing in contracts and billing Acquisitions Organizational change management