Evolution of Business Advisory and Professional Services – Key Trends Shaping the Industry

Though consulting traces its origins to antiquity, business consulting and advisory –as a practice – began shaping up at the turn of the 20th century. Industrial focus on operational efficiency, growth, and profitability drove business advisory and professional services proposing to solve/alleviate/redefine niche problems across functions and verticals.

Subsequent decades saw a spectacular rise of diverse consulting and advisory services, with an estimated 2.4 million business consulting firms worldwide and around 36% (865K) based in the US (as of 2021)[i].

In the ‘industrial digitization’ context, professional advisory services pivot their solutions around strategy design, technology intervention, and business operations management; and their promise is – digitally transform the delivery of services in industries, such as banking and financial services, by improving customer experience, employee experience, and regulatory compliance.

Despite being a staple of the business lexicon (for decades), digital transformation still warrants objectivity. To realize the impact of advisory and professional services, probing these fundamental issues is crucial:

• Digital Delivery Experience

How does business consulting help institutions deliver a delightful digital experience to employees, customers, partners, and other stakeholders [while being cost-efficient and risk-resilient]?

• Regulatory Compliance

How does consulting enable realistic and sustainable org-wide changes, while ensuring institutions adhere to the prevailing laws and regulations?

Evolving Trends in Business Advisory and Professional Services

1.????“Consultative co-creation” rather than prescriptive hand-offs

Unlike the traditional prescriptive consulting approach focused on the linear, one-way delivery of business wisdom, emerging methods are based on end-to-end collaboration. The co-creation approach leverages a deep domain-centric partnership between consultants and the client-side subject matter experts and analysts.

From problem articulation and strategy to planning and implementation, the co-creation model works on the “One Team” principle, emphasizing continuous handshake, knowledge transfer, transparency, and mutual respect. In this sense, modern advisory and professional services leverage Design Thinking[ii] principles that remold or break out of entrenched norms, assumptions, and biases to solve problems and foster innovation through iterative, incremental cycles of value delivery.

2.????“Bite-sized incremental lifts” for pragmatic and sustainable yields

Large-scale enterprise transformation projects are cumbersome and costly, requiring extensive approvals and up to millions of dollars and person-hours investment. Additionally, the risks and stakes are high due to the entailing shifts across the organizational machinery. Meanwhile, the changes can take several years to percolate and assimilate into the organization’s culture.

Advisory approaches based on spurring incremental changes (or lifts) provide a realistic way to lead the change through a tiered or phased implementation. An incremental lift in the financial services industry could mean bringing small, measurable changes such as re-engineering a process, automating a workflow, workforce augmentation through focused skilling programs, etc.

3.????Integrated “domain-led” consulting and implementation expertise

Though business consulting is traditionally a standalone and specialized undertaking, contemporary industrial use cases demand assimilating and synergizing domain-centric advisory practices with hands-on execution capabilities. The integrated model can offer better value and outcomes through -

a)???Cost-effectiveness: leverages bundling and economies of scale to increase the value per unit cost

b)???Shared stakes: Distributes the risks and stakes for the service provider and client organization. By bringing “skin in the game”, the integrated model drives optimal efforts and accountability.

c)????Compounded impact: Access to the best resources and knowledge across the spectrum to increase the overall impact

4.????“Market adaptiveness” through continuous problem refinement and data insight

Given the accelerating pace of innovation and market dynamics, agility and responsiveness are crucial to maintaining competitiveness and growth. Forward-looking advisory and professional services foster adaptiveness and precision by deriving insights from vast pools of business and customer data. They must leverage the emerging decision frameworks and tools and techniques to equip organizations with critical insights and agility.

a)???Data analytics and modeling: Predictive analytics can augment the precision of domain-led consulting practice with insights and prediction of probable outcomes based on historical trends, data mining, statistical modeling, and machine learning.

b)???Feedback loop: Evolving consulting practices must learn from the market and customers in near real-time and frame their solutions around the problems. Social media monitoring, CRM platforms, and intelligent chatbot agents provide crucial feedback channels.

5.????Cohesion of organizational culture and values

Cultural evolution is an organic process that takes years (min. 3-5 years for an enterprise) before its impact is widely evident. Nonetheless, cultural changes are fundamental to any transformation, and business advisory solutions must provide the necessary support to help organizations navigate the shift.

Cultural synergy and concurrence are critical strategies that focus on identifying existing strengths and supportive pillars that can drive the change through gradual alignment and mindset evolution. Key aspects of cultural assimilation[iii] include:

·??????Management practices

·??????Values and principles

·??????Leadership model

·??????Working standards

Domain, Digital, Talent – The Making of Business Advisory 2.0

While a lot can be said to describe “how to step up advisory practices for digitally transforming the industries”, the crux lies in combining three aspects viz. Digital Solutions, Domain Expertise, and Execution Capabilities.

Digital solutions are intelligent solutions that use machine intelligence, data analytics, cloud, and other edge technologies to rationalize costs, efforts, and quality. Domain knowledge is crucial for bringing focus and precision to the use cases to direct and steer implementation and to provide overall guidance. And then Execution capability drives the “change states” through implementation.

The Digital Knowledge Operations? framework or DKO? combines the domain, digital, and talent pillars for pragmatic outcomes to support digital transformation projects. It pivots around deep domain expertise to guide thoughtful implementation to meet the goals of digital delivery experience and regulatory compliance.

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References

[i] https://www.ibisworld.com/global/market-research-reports/global-management-consultants-industry/

[ii] https://online.hbs.edu/blog/post/what-is-design-thinking

[iii] https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/managing-and-supporting-employees-through-cultural-change-in-mergers