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Disruption in the Consulting Industry: Challenges and Changes in a Transforming Sector

Businesses in all industries are competing in a transforming environment. And while every company must adapt to these rapid shifts, the consulting sector — with its focus on strategy development, process change and client relationship management — must be particularly committed to staying innovative in this shifting landscape. Going forward, most consultancies will have to refocus their business models, organizational structures, value propositions, proposals and project plans.

Higher client expectations

Among the challenges facing consulting firms, there’s one overarching challenge standing above the rest. In many ways, it’s the single factor defining the others.

It’s the main thing staring every consultant in the face — client expectations.

Surveys over the past couple of years have found that consulting leaders consistently list client expectations as their top business pressure. Ask the long-time consultants in your firm about the changes they’ve seen in their careers — they’ll tell you that today’s clients expect faster responses, tighter timelines and greater deliverables. Meanwhile, consulting fees are not necessarily higher, but they are more tied to results.

Every piece of the shifting business landscape translates into a change in the client’s expectations. It’s only natural. The good news for consultants is that it’s within their power to rise to the occasion. As a result, many consulting leaders have acknowledged that they must expand or adjust their service offerings to meet their clients’ needs.

The main disruptive forces driving changing client expectations are as follows.

Digitization and automation

The business environment is becoming increasingly digitized, with information and transactions moving faster and manual tasks becoming automated.

This digital transformation affects every part of the consultant’s work, changing the nature of competition, proposals, contracts, and deliverables. Client companies expect consultants to be digitally savvy. Projects will need to embrace artificial intelligence and analytics to really take the client’s business to the next level.

But embracing digitization and automation is about more than just using technology. It’s also a mindset. Software engineers introduced us to the “Agile” (or “Lean”) methodology, driven by the Agile Manifesto that prioritizes individuals over processes, collaboration over negotiation, and responding to change over following a plan.

The Lean approach, which has influenced sectors such as consulting, often emphasizes the importance of “failing early and failing often.” But it’s not your traditional definition of “failure.” These failures are nothing to be ashamed of. On the contrary, this version of “failure” is more akin to sharpening the blade by constantly re-evaluating your product and discarding any inefficiencies.

It’s a fast-moving, deliberate process: strategize, create, evaluate, adjust, next iteration, repeat! Your clients will appreciate this efficient, results-oriented approach to project management.

Increased competition

A key impact of increased digitization is allowing other players with different business models and strategies to enter the marketplace. With new freelancer websites, virtual networks, and specialist teams popping up all the time, there are just more options for clients to choose from.

Everyone feels the pressure. Larger firms face competition from smaller firms. Smaller firms face pressures from independent contractors and informal specialist networks. And even those independent contractors feel pressure from offshore talent moving to get into the game.

Tighter timelines

Consultants are facing tighter timelines, right from the initial contract through to the project and deliverables.

Let’s think about the selection process. In the “old days,” client companies issued a Request for Proposal (RFP). Then, the weeks went by as the consulting world spotted the notice, discussed whether to pitch the work, and created and submitted their proposals.

This process is now condensed. The moment the call comes, you must be ready to respond with your product offerings and value proposition. You’re off to a quick start, and those time pressures will continue. The successful consultant must be ready to present their project concept in the short term, and work quickly in order to produce deliverables in the medium term.  


Have you ever gone to a project meeting, only to get in the room and discover you’re not the only consultant on the job? It happens.

Client companies are often employing multiple providers on projects. Sometimes they’re seeking specific skill sets; other times they want different perspectives on the way forward.

And then there are still other times — and this is where it gets tricky — where companies “double-book” consultants for a single project. They’ll look at two project concepts, then choose one group to put their plan into action. This can be frustrating, but it’s part of the game nowadays.

Rise of the gig economy

Whether you call it “Uberization” or the “gig economy,” company managers are becoming accustomed to ordering precisely what they need, and only for short periods. Long-term relationships are becoming less common, and most consultants are depending more on short-term appointments rather than longer contracts. It feels more precarious, but it’s the trend.

Performance-based projects

As companies seek more value for their money, they’re paying consultants based on performance. It’s no longer a flat fee — your compensation will be awarded depending on some measure of whether you hit the performance goals. The upside is the potential for great work and significant reward. The downside is that the pressure to deliver is on.

How consultants can stay competitive going forward

With all of these challenges in mind, how can an innovative consultant successfully adapt to these changing landscapes?

Stay lean

This may be tough, depending on your experience. However, if you’ve been part of a consulting group that had to close its doors and turn out the lights, then you likely already understand the importance of staying lean. Maintain your team as a small group of energetic principals, then employ highly-focused specialists according to the needs of each project.

Emphasize results and outcomes

Going forward, successful consultants will prioritize outcomes over the day-to-day work, per diems or hourly billing rates. Your way forward depends on being able to point to obstacles overcome, problems solved, or innovative solutions implemented.

Of course you should still pay attention to the timesheets, because those matter. However, your real value will come from your “success sheets.”

Invest in the right tools

Building your team of principals, specialists, contractors, and freelancers is the starting point. The next step in investing in shared technology that:

  • Creates better collaboration through streamlined workflow management
  • Drives more contracts through improved lead management
  • Facilitates superior client relationships, and
  • Is customizable enough to adapt to your consultancy’s specific business model or areas of focus.

With the right mindset and the right tools on hand, consulting professionals will be well-equipped to tackle the challenges of the modern business landscape.

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