From service providers to partners

The aspiration to "bounce back" post-pandemic and keep up with the rapid pace of digitalisation, as well as the continuing political and regulatory pressures, is placing a serious strain on businesses. As a result, they are increasingly turning to relationship-oriented management consultancies for more sustained support and expertise. According to Source Global Research, provider of data and analysis about the global professional services industry, the consulting sector is expected to grow around 11 per cent this year, after a contraction of around 5 per cent in 2020.

Alongside this rapid rise in demand, the rules of engagement are changing, too. Hard-won experience, along with the fact that many companies have hired former consultants to take on internal management roles, means clients have become more sophisticated about the way they engage with consultancies. They are now looking to achieve more sustained value – and this is shifting the nature of the client-consultant relationship towards co-creation. A new breed of consulting firms, such as the global consultancy Protiviti, aren’t just providing advice and recommendations anymore. Instead, consultants and their clients are working together in blended project teams across every aspect of the development, deployment and maintenance of new products and solutions.

“The move to a partnership, rather than a service-provider relationship, isn’t an entirely new trend but the pandemic has definitely accelerated it,” says Fergus Navaratnam-Blair, Producer, Thought Leadership at Source Global. "Covid-19 created entirely new challenges for businesses in areas like supply chain management and workforce planning. As a result, clients are having to lean on consultancies for support in parts of their organisations where they wouldn’t traditionally have used them, and that is deepening the relationship."

“At the same time, those clients are looking at their consulting projects through the lens of 'How is this going to develop our internal capabilities?' and 'How are our people going to learn from this experience?'. They don’t want to buy the same service to fix the same problem again and again.”

Some projects, such as those focused on digital transformation, can be so complex they require specialist skillsets and resources that most companies simply don’t have. Clients require bespoke solutions to their problems, and no longer want to see consultants deploying off-the-shelf packages that aren’t tailored to fit their needs. This requires consultants to develop deeper and more sustained relationships with their clients and introduce a degree of shared risk.

“Listening to how businesses are developing, we’ve moved from providing things such as services, which traditionally involved bringing IT skills to a single area of operation, to managed solutions,” says Peter Richardson, Managing Director and Architect for the Future of Work at Protiviti. “We’re now seeing clients looking to consultants to assemble a team that can manage a large technical transformation project. We take away a lot of headaches and provide a single point of contact for people and technical resources and reporting.”

These sorts of large-scale change projects demand considerable planning and manpower. One such transformation that Protiviti is overseeing for a financial services firm has been ongoing for a year, absorbing well over 100 people. “As a consultancy, we are change professionals, and we bring specialised skill sets and technologies that helps our clients to navigate change,” says Paul Middleton, Managing Director for key accounts at Protiviti. “We are market leaders in areas such as risk and next-gen internal audit, and our resources and access to the best talent mean we are positioned very competitively to work collaboratively – yet the key factor in developing successful client-consultant partnerships continues to be trust.”

If the benefit for a client in terms of tapping into another enterprise and sharing the risk is obvious, for Protiviti the ROI is seeing a project turn into a joint venture, or the opportunity to spin off a product or service. Additionally, there’s the sense of making an impact right across an organisation. “To get projects where you’re at the heart of driving change over the long term is not just about commercial gain,” says Middleton. “Our goal is to make a meaningful difference and deliver long-lasting value. Our people enjoy seeing the impact of their work, which is often difficult in shorter-term projects. People believe in what they’re doing, so it’s about reward; co-creation should be a virtuous circle.”

The pandemic is not only deepening the client-consultant relationship but also having a lasting impact on the way it is fostered. It is no longer simply about being stationed in the client’s office or deploying a fixed team; it is about harnessing the skills of an entire ecosystem of organisations, experts and services that could be anywhere in the world.

At the start of the pandemic, Protiviti set up weekly Collaboration Forums, which could presage the way business would be conducted in the new, remote future of work. These virtual sessions brought together organisations from different sectors, which might not ordinarily have engaged with one another to share their perspectives. “They were a value statement during that period,” comments Middleton. “It said: we don't necessarily have all the answers, but we believe our clients would value teamwork to solve the unprecedented problems they are facing, and the opportunity not just to talk to us but to their peers, as well. And we thought there was a powerful role there for us, to facilitate that collaboration.”

These virtual networks point to a borderless future for co-creation that can draw on disparate and dispersed resources regardless of where they are. “Remote working has changed the physical ways in which clients and consultants interact. They no longer need to be sat around whiteboards together or stationed in each other’s offices,” agrees Source Global’s Navaratnam-Blair. “Prior to the pandemic, consulting firms were investing in innovation labs in order to create spaces in which co-creation could take place. Now, consultancies are shifting from an innovation centre model to an innovation network model, creating virtual networks of creative thinkers both inside and outside of their organisations.”

The result of intense and continuous change, and the paramount need to embrace it productively and creatively, these virtual networks offer the new breed of modern consultancies another way of expanding their expertise and creating value for their clients, with the added benefits of lower costs and a reduced carbon footprint. Co-creation, already in the ascendant, may well only increase as a result.