The explosion of computer-to-computer communication in the 21st century is triggering a growth phase for computer consultants. Richard Nolan, a professor at Harvard Business School, and Larry Bennigson, executive vice president of HBS Interactive, describe the evolution of IT management consulting.
Johnston: In your research, the PC in the ’80s and the Internet in the’ 90s sparked explosive growth in the IT consulting industry. Have you identified a third trigger for this decade?
Nolan and Bennigson: The catalyst for the decade behind stand-alone computing is “computer-to-computer” communication. By the end of the decade, more than 60 percent of computer communications will be computer-to-computer. Computer to Computer dramatically speeds business. For example, end-to-end supply chains can be automatically customized by sales computers that communicate directly with the computers in the warehouse that communicate directly with the manufacturer’s computers. Manufacturer computers communicate directly with their computers. Computer vendors. In addition, computer-to-computer communications are meeting demand and adjusting logistics systems to automatically direct products to geographic markets.
Q: Can you describe some of the catalysts and drivers of growth in the computer consulting industry? What effects does globalization have on this growth?
A: The catalysts and drivers of IT growth (see Discussion Paper (pdf)) in the consulting industry were diverse. First, innovation in terms of frameworks and methodologies in conjunction with qualified professionals has provided value-added services that are only offered by the consulting firm. For example, the Boston Consulting Group and McKinsey have developed unique conceptual frameworks to assist management in developing action plans for the various business units.
By the end of the decade, more than 60% of computer communications will work from computer to computer.
– NOLAN AND BENNIGSON
Novelty and complexity were a second factor. Andersen Consulting, now Accenture, has experience in designing and coding complex IT applications. SAP and Seibel have developed unique package software and provided specialized consulting services to support the implementation of the package software.
A third factor is building a critical mass of high level of expertise that can not be economically viable in a business. For example, computer security consulting requires a high level of expertise that few companies can maintain internally. By providing this kind of service to many companies, the critical mass in the practice group can be maintained while ensuring that the group remains at the forefront of the topic.
In conjunction with this third factor, a separate consulting firm may focus on managing a very talented group of knowledge workers. Management and incentive systems are very different in a consulting firm, for example in a product company. Therefore, a product company may not be attractive to various knowledge workers who prefer to work in the consulting sector.
A fourth factor is the demand for process and behavioral changes that IT implementation imposes on most businesses. IT was not just a new technology. To capture the value of IT, organizations have seen changes in structure, culture, people, processes, and leadership. Many organizations have turned to the consulting industry to help them understand and control these important changes.
Finally, the computer consulting industry experienced an unprecedented convergence in terms of 1) the introduction of systems such as ERP and CRM; 2) management improvements such as BPRE; 3) problems to be solved, such as the year 2000 problem; and 4) a new pioneering area like e-commerce.
Q: What current players have adapted to the changing IT environment? What is the key to your success?
A: In our discussion paper (pdf), we report that more than 50% of current spending on budgeting has to be calculated in some form. Due to the ubiquity of IT, all consulting firms had to integrate computer literacy. In fact, with the hyper-growth of the nineties, the board is still in a restructuring mode.
A high level of industry customization in the computer consulting industry will be required in the future.
– NOLAN AND BENNIGSON
In this context, Accenture has further expanded its consulting services. Accenture has set up an impressive education and training center called St. Charles outside of Chicago, which aims to keep the skills of their professionals up to date and provide them with a leading tool to equip their professionals with new skills that are required in the emerging IT. ,
Another example is IT companies that integrate certifications and training with their own consultants, independent consultants, and customer professionals. Microsoft, Sun, and Novell are examples of this type of business.
Q: What are your predictions for the future of IT management consulting?
A: We believe that the recent restructuring of the IT management consulting industry is a transition point. This transition coincides with the emergence of new growth drivers for IT management consulting. As the transition progresses, we can get some of these new engines in shape.
Until recently, there was a de facto IBM industry standard for the operating system and a de facto standard for using COBOL for application development. In the late 1990s, the development of new applications was replaced almost exclusively by the implementation of software packages. In addition, networks and the Internet have moved the IT infrastructure of the IBM standard into an emerging environment characterized by open standards.
As a result, IT infrastructure has become simpler and more complex thanks to the innovation of layers and APIs (Application Programming Interfaces). Involvement in IT management consulting is a fairly complex requirement to provide both a strategic perspective and sound implementation of significant risk management so as not to exploit the company’s strategic competitive advantage. IT because of a bug in effectively managing implementation issues.
In addition, the growth of the sector in the context of management challenges to align strategic opportunities with implementation opportunities is limited. For example, the wave of ERP installations and BPRE projects is now at its peak. Although outsourcing is still an established practice, companies have gained experience and can now do much more for themselves than in the past. Managers know more about IT, the business and organizational potential and impact of computing, and designing their own backbones and architectures.
We think it’s important that we try to sell computer initiatives completely to business consultants.
– NOLAN AND BENNIGSON
And there are forces that will generate new demand. Security is becoming a ubiquitous problem. The internet will grow spectacularly in Asia and Europe. New applications such as bioinformatics and telematics are creating new segments of the board. And the introduction of Internet2 will ultimately have a significant impact.
IT consulting, like any product or service, creates its own needs. In the future, a high degree of customization of the computer consulting industry will be required. By introducing innovations and informing the market about the competitive advantages of these innovations, IT consulting invents and advises its growth opportunities. This leadership and customization IT consulting capability is the key to their robust development.
Q: What lessons can Operations Manager draw from your research?
A: We believe a number of lessons are important to farm managers:
Many functional executives and trades have extensive computing expertise, and many IT professionals are aware of the strategic and business benefits of IT. Companies that promote and integrate these integrated and more sophisticated capabilities in their companies have a competitive advantage over those who rely on third parties for their integrated vision.
The rate of change in IT capabilities is consistent with the rate of change most companies experience in their competitors’ other technologies, markets, and initiatives. We’ve found that a successful IT consulting firm needs to be able to detect, recognize, and respond quickly to change. This also applies to the operation. Operations managers have the difficult task of implementing new IT features while ensuring that they are prepared for the next build or release.
The emerging IT environment is so complex that building IT infrastructure and integrated applications requires specialized knowledge that is often only available in IT consulting firms. Good farm managers will ensure that their organizations can work effectively with service provider networks with different specialized capabilities and integrate their value.