Outlook On Management Consulting Services Spending And Adoption In 2011

First of all, thanks to everyone who contributed to my "What Constitutes A Management Consulting Firm 2.0?" discussion in The Forrester Community For Vendor Strategy Professionals. This discussion has driven quite a bit of traffic (more than 3,600 views), but we’ve gotten just six replies so far, all of them very valuable. Please be sure to contribute to receive a copy of my planned update report on the consulting market.

The identification of future business models is one of the top questions I regularly discuss with consulting leaders. The other, and more tactical question, is about the spending and adoption patterns for management consulting services this year. In Q4 2010, Forrester surveyed 2,691 business decision-makers globally and found that:

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Oracle Gets Serious About Carbon And Energy Management With Its Acquisition Of Ndevr's GHG Accounting Software

This was quicker than expected. As stated in my last report on the enterprise carbon and energy management (ECEM) software market, we expected that Oracle, among some other players, will catch up on the ECEM market opportunity as it materializes. We projected a period of hypergrowth over the next three years, taking the ECEM software market from an estimated $316 million in 2011 to $903 million in 2013. You'll find our market definitions for carbon and energy management software and overview of the vendor landscape here

Oracle announced on Friday its acquisition of Ndevr's Greenhouse Gas (GHG) Accounting Software with the intent to expand its current portfolio of sustainability solutions and offer improved capabilities to monitor, analyze, and report energy consumption and related emissions. Australia-based Ndevr was founded in 1998 as a JD Edwards partner, has been a certified Oracle partner for 10 years, and employs today approximately 80 consultants.

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Aligning Your Sustainability Consulting Services Business For 2011

The beginning of a new year is always packed with planning sessions to recap the past year, reshuffle priorities, validate progress of corporate and product/service strategies, and come up with a road map to convert thoughts and concepts into actions.

We analysts in Forrester’s vendor strategy practice are regularly involved in these planning and strategy sessions, to act as an independent and objective mirror for higher and mid-level management layers at tech vendors and service companies. Together we map out and identify the implications of macro business and technology trends. In one of those sessions that I was recently invited to, the focus was on future business models in the tech industry. We can offer instant feedback if a vendor’s direction is in line with our market observations and advise them to refine their approaches to be best positioned for the future.

During 2011, I am going to leverage some of the information I have gathered over the past year and display in a couple of slides some key data points on an aggregated basis of vendor and market criteria, helping companies map themselves against industry peers and the market opportunity. I hope you will find them useful as either good discussion starters internally or for planning and validation purposes. I am planning to update these slides on a regular basis to present a fresh and condensed view on key supply- and demand-side indicators.

The first set, which I am offering today, is two slides (see below) targeted toward leaders in charge of their companies' efforts for sustainability consulting services business or evaluating if their companies should move into this market opportunity. Figure 1 contains key vendor criteria such as organizational setup and services mix, while Figure 2 summarizes our market estimates and forecast for 2010 and 2011.

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The Evolution Of Enterprise Carbon And Energy Management Software

Forrester just published my comprehensive research report (approx. 40 pages) on the current state and future prospects for enterprise carbon and energy management (ECEM) software. We surveyed more than 40 suppliers, did interviews and demos with more than 20, and drew upon our ongoing discussions with consultants, service providers, and of course enterprise buyers that are participating in the takeoff phase of the ECEM market. One of the interesting takeaways from our research is that the carbon and energy management market is actually three market segments, not one (see figure below):

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The Path To Revolution In Management Consulting

This past May, I was on a plane when I created the first version of the path to revolution (see figure below) in management consulting, and which I am sharing with you today. This figure has not really changed much since then, but I have been developing the underlying structure to help me, as well as executives at consulting service providers, segment and map the new portfolio of existing and evolving services that have bubbled up in the wake of the increasing diversification of delivery options. My interactions with a number of executives over the past few months have helped me in this early validation process.

I recently started a discussion about what constitutes management consulting 2.0 in The Forrester Community For Vendor Strategy Professionals. This opened up the discussion on innovation in management consulting to a broader audience. While the community discussion has triggered quite a number of views (already more than 1,200 views), there are unfortunately just four (very valuable) responses so far. I encourage you to weigh in to the discussion (and to also check out others such as those on an apps-everywhere world and Smart Computing). You’ll also find new contributions from me there soon.

In the future, we will see four main approaches to delivering value to clients from management consulting service providers (which begs the question as to whether the phrase “management consulting” is not fading into obsolescence anyway):

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Sustainability — The Next Driver For Innovation And Growth

I haven’t posted recently for a number of reasons, but perhaps the most pressing of which is because I have been immersed in some serious research into (environmental) sustainability. I want to take a moment here to outline this exciting research agenda.

We recently published an update of our green IT survey of global enterprises and SMBs. My colleague Chris Mines highlighted some of the key findings in his blog. In this report we introduced our new categories of sustainability solutions and services to help provide a clear taxonomy of the varying solutions available in the marketplace. This taxonomy comprises three main sectors: IT energy and resource efficiency (as known as "green IT"), IT-enabled green business processes (what we term “IT for green”), and corporate sustainability planning and governance (“green business”). The graphic below provides some examples of each of the categories.

Forrester Sustanance Solutions And Services

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(R)Evolutions In Management Consulting

The next decade will represent the decade of management consulting innovation, as it's reached its local peak. Consulting service provider strategists are being forced to not only innovate their clients' businesses but their own businesses, too. Four trends are pushing service provider strategists to ignite innovation in 2010:

  • Convergence — of business and IT services markets. Service providers are looking for new routes to value for growing their business in their rapidly commoditizing markets. Because the business is becoming more and more intertwined with technology, and related decisions are moving up within client organizations, providers of all types are expanding their corresponding portfolios — either up or down the value chain — but with mixed success. However, this makes traditional provider labeling meaningless. Classical management consulting firms are eager to evolve their IT capabilities, accounting firms strive to be more than just another Big Four company, business and IT services players focus on new integrated services, and IT outsourcers are overhauling their business consulting units. At the same time, new entrants such as product vendors and cloud-native providers are entering the services market.

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StrateTalk No. 3: Mark Foster, Group Chief Executive – Global Markets And Management Consulting, Accenture

StrateTalks (Strategy Talks) are summaries of my in-person exchanges with leaders at service and solution providers.

[05/13/10] It was 6:30 a.m. on Thursday morning when I checked out of the hotel and headed to Prudential Tower, where Accenture’s Boston office is located.

On the way there, I saw Mark Foster walking in front of me.

Mark joined Accenture in 1983 and has been the group chief executive for Accenture’s management consulting growth platform (technology and business process outsourcing [BPO] represent the two other growth platforms at Accenture) since 2006. However, Mark not only oversees the management consulting business but is also responsible for the growth, differentiation, and innovation agenda for Accenture overall.

He was also the person I was scheduled to meet at 7:00 a.m. to discuss Accenture’s strategy for innovating itself. Over the course of several meetings with executives of the management consulting leadership team, I identified some interesting ongoing initiatives intended to drive Accenture’s differentiation. I’d been wondering if these initiatives were just brewing in isolation or were really part of an overall strategy. This was the reason I needed to talk with Mark.

I called out to Mark; he turned around and greeted me. Together, we walked to the Prudential Tower, passed security, and took the elevator up to the Accenture floor.

What interests me about Accenture, besides the obvious facts around strategy, service portfolio, and go-to-market approach, is its culture — the true source for innovation and differentiation for any company. Accenture’s culture is in my opinion very consistent. If you talk to a consultant, manager, or an executive such as Mark, all reflect this open and collaborative culture.

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StrateTalk No. 2: Amy Quigley, VP Of Marketing, Continuum

StrateTalks (Strategy Talks) are summaries of my in-person exchanges with leaders at service and solution providers.

[05/11/10] After a long, but interesting, briefing with a service provider on its green IT and sustainability consulting services portfolio at our Cambridge, Mass., office, I jumped in a cab to Harvard Square.

I then met with Amy Quigley, VP of marketing at Continuum, an interesting firm. Why? More on that later. Amy has been with the company for about two years now. Prior to Continuum, she was in leading marketing roles at other firms, including Molecular and ATG.

What is Continuum? This was the overarching question I had had in my mind since contacting Amy about having this more philosophical-flavored chat.

Continuum’s Web site notes that it is an innovation and design consultancy. According to Amy, Continuum has three domains of expertise: brand, design, and strategy. I’m primarily interested in Continuum’s strategy approach, which is truly different. The firm leverages primarily design and creativity, rather than analytical, tools to help clients with their strategy. Some call this approach “design thinking”.

However, I do not like this term, and Amy agreed that it does not perfectly capture how Continuum attempts to position itself at executive levels. This is also one of the reasons why her company is currently undertaking a major repositioning effort. Amy shared some of the company’s early slides with me, and I agreed that the company is going in the right direction; for example, the firm is merging its areas of expertise and is creating research communities focused on business opportunities.

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StrateTalk No. 1: Kevin Bolen, Partner, Innosight

StrateTalks (Strategy Talks) are summaries of my in-person exchanges with leaders at service and solution providers.

[05/11/10] It was a sunny Tuesday morning in Cambridge, Mass., when I met with Kevin Bolen, who is one of the eight partners of Innosight. Before joining Innosight in 2007, Kevin was the chief marketing officer (CMO) of Lionbridge Technologies.

It’s been a while since our last chat and I was eager to get an update from Kevin on Innosight’s business and his perspective on the innovation consulting landscape.

As with most of the innovation consulting services specialist firms, Innosight was born through the innovation of a new paradigm/model. In this case: disruptive innovation, introduced by Harvard Business School professor Clayton Christensen. He founded Innosight with Mark Johnson in 2000.

Ten years later, the firm employs about 50 people and is a publication machine. Why? At Innosight, partners/directors aren’t the only employees publishing articles and books such as Mark’s latest book, Seizing the Whitespace: Business Model Innovation for Growth and Renewal; even analysts (who are entry level at Innosight) are eligible to write.

For more than a year the firm has focused in particular on business model innovation (BMI) in publications and client engagements. BMI is certainly one of those buzz words that is slowly starting to annoy me. Why? All examples mentioned in this context are just a handful and always the same. Certainly, innovating a business model is as easy as grabbing an “Apple” from a tree.

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