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MICRO-CONSULTING ... CONTINUED It's interesting to observe how the five threats described in the article below intersect with the four quadrants of the matrix mentioned in the previous post. THE WEAK POINTS According to the article, business consulting firms have five weak points: (1) Labor-Intensive. Makes them hard to scale. (2) Time-Based Business Model. Clients are charged for engagement time. (3) High Charges. Squeezed between billable rates and consultants' salaries. (4) Time-Bound Value. Engagement deliverables are very volatile. (5) Knowledge Commoditization. There is no more proprietary know-how. The Disruptive Quadrants: /* ⇨ AI DISRUPTION AI algorithms & avatars can scale and do public data research, information gathering, categorization & correlation work much faster than human consultants. Can be as scalable as needed (1). AI algorithms & avatars don't get paid at the end of the month (3). Even if humans cannot be fully eliminated, the scaling and cost effectiveness improvement is significant (2). The advanced AI-based automation makes engagement updates iterations affordable and repeatable at shorter intervals, addressing client's operating environment's volatility (4). With AI, knowledge commoditization becomes an advantage, if filtered properly (5). ⇨ CLIENTS TAKE CONTROL Since the client team does most of the work, facilitated by the consultants, and assisted by AI, according to the Micro-Consulting model, the Time-Based Business Model becomes less important (2), and the High Charges are no longer relevant (3). The knowledge commoditization allows the consultants to focus on facilitating the understanding of subtleties, providing deeper insights, and customized clarifications (5). ⇨ BOUTIQUES & SPECIALISTS The size of the team facilitating an engagement where the client team and the AI apps do most of the work becomes less important, allowing for a greater scalability (1). With the Time-Based Business Model only marginally applicable (3), and with the High Charges becoming irrelevant for the smaller consulting teams engaged (2), the Micro-Consulting model overcomes most of the weaknesses highlighted in the article. The Knowledge Commoditization becomes a great strength, since smaller teams and individual consultants cannot mobilize a lot of researchers for large amounts of information gathering and correlation (5). ⇨ WOULD-BE DISRUPTORS It becomes quite likely that Micro-Consulting disruptors may induce sooner than expected a major inflection point into the business consulting industry. Don't you think so? THE ARTICLE The Business Consulting Industry Is Being Disrupted, and Nothing Can Stop It, by Soren Kaplan https://lnkd.in/dSqsYHmE /* How Professional Services Firms Dodged Disruption, by Julian Birkinshaw and David Lancefield, MIT Sloan Management Review, Summer 2023 https://lnkd.in/dM9F8Red Also read: MICRO-CONSULTING https://lnkd.in/dyPUDzNg SERVICE-ON-DEMAND FOR STRATEGY https://lnkd.in/gyTVNm9y
