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Business Of Consulting: Firms Target MBAs To Charge Up Digital Innovation

As tech provides consulting revenue surge, top firms target MBAs with digital expertise.

The business of consulting has a newfound zest. Digital service lines are charging up consultancy practices as clients scramble to harness the power of digital technologies such as social media, cloud and analytics.

Growth in digital services it at the forefront of the industry’s boom. Resurgent merger and acquisition activity, IT integration, and cyber security and strategy consulting have pushed annual revenues in the market to surpass $245 billion, according to research from Kennedy Consulting’s Global Consulting Market outlook.

Digital remains the largest area of consulting activity, rising by more than 27% to £1.4 billion in the UK alone, according to the Management Consultancies Association.

Matthew Guest, head of Deloitte’s digital strategy practice in EMEA, says in an interview with BusinessBecause that digital demand is coming from every sector, spurred by the shift to a digital economy.

“We are being asked by management boards of organizations to execute their entire transformations,” he says.

The rapid rise of digital is driving up demand for a new type of tech-savvy consultant. The number of digital and technology consultants rose by 26% in the UK last year, according to the MCA, surpassing the industry’s 12% increase in total headcount. 

Gregor McHardy, consulting lead for communications, media and technology at Accenture UK and Ireland, says the firm’s recruitment has been “aggressive”.

Yet management consultants with core digital skills who can drive long-term tech strategies are illusive. Industry bodies have warned of a skills shortage. “We have a huge demand at Accenture for talented consultants and it can be a challenge to find high calibre talent,” Gregor says.

At the centre of this growth in employment are consultants with expertise in data and analytics.

“Increasingly, we see clients make more data-driven decisions and putting analytics at the heart of their businesses, so our teams are increasingly bringing data and analytics skills into project analysis and execution,” Gregor says.

Mazhar Hussain, KPMG director and a leader for the firm’s digital and analytics offering, says data are helping to shape and develop digital strategies.

“There’s a huge need to bring in that expertise,” he says. “Like any industry that is building or growing, it [digital] needs every level of talent coming in and helping it flourish.”

Firms say they have sought to work closely with a clutch of global business schools to identify top talent. MBA programs have long produced a ready stream of consultants for the leading advisory groups, such as McKinsey & Company, Boston Consulting Group and Bain.

But energized by new technologies, firms are increasingly desperate for digital talent.

“This is common to all the consulting firms at the moment,” says Stephane Ponce, global consulting lead for career development at INSEAD, the business school. “They want to find a better way to engage with their customers via the digital medium.”

Consultants with STEM — science, technology, engineering, and math — backgrounds are particularly sought after, says Radhika Chadwick, EY partner who leads digital and strategy services.

“There is enormous potential to increase our talent pool,” she says, highlighting consultants with experience in leading digital transformation programs.

One of the big areas of growth for digital advisory — and employment — has been in strategy consulting. Strategy consulting in the UK grew by 44% last year to £537 million, and now accounts for a tenth of all consulting activity, according to the MCA.

Peter Hewlett, principal at the consultancy firm A.T. Kearney, says that strategy consulting continues to be a strong growth area with increasing client demand. But working on complex long-term projects requires a different type of expertise.

“Since the global financial crisis, clients are focused even more on ensuring they hire firms with the right individuals, the right skills and the right experience,” Peter says.

Strategy consultants need to be able quickly assimilate large amounts of information, be comfortable dealing with different, contradictory viewpoints, and be able to communicate effectively with stakeholders, he says. “Sourcing the right people to join the firm is as important as ever.”

The Big Four accountancy companies — Deloitte, EY, KPMG and PwC — have shown some of the strongest growth in the consulting market. The Big Four increased their revenues last year by 9% to £2.3 billion, according to analysts at Source Information Services.

Talent is seen as critical to that growth. The advisory practices of the Big Four firms are all successfully recruiting, says Regina Resnick, associate dean for the Career Management Center at Columbia Business School.

“Each is very interested in maintaining and strengthening their relationship with the school,” she says.

Demand for talent is evident by the high salaries commanded by consultants with digital expertise. Compensation data collected from groups including IBM, Infosys and L.E.K by industry website ManagementConsulted.com show newly minted MBAs can earn up to $147,000 in base salary at the top firms.

“We have been seeing strong growth in salary upon graduation,” says Stephen Pidgeon, associate director for career development at Dartmouth’s Tuck School of Business. This reflects the competition amongst consulting companies for the best talent, he says.

Millennials — those born between 1980 and 1995 — are a key demographic. Yet their shifting work priorities are keeping talent managers awake at night.

“With quality of life issues becoming increasingly important with the millennial generation, firms are proactively discussing how they support work-life balance and perks,” says Chris Weber at UCLA Anderson School of Management’s Career Management Center.

It is relatively easy to find people with technical backgrounds, but those with the digital creativity sought by consultancy firms are particularly difficult to attract to big corporations.

“Millennials tend to want autonomy and to work on very exciting projects all the time,” says EY’s Radhika. “Small environments tend to provide that.”

A dissolving of the boundaries in the consulting industry has given rise to career opportunities at smaller, boutique firms specializing in digital, such as Agiliti of the US.

“We have many students that are interested in small, boutique consulting firms,” says Laurence Verbiest, associate director for careers at Georgetown’s McDonough School of Business.

Tactics to capture digital talent range from campus recruitment programs to flexible working options. PA Consulting, for example, is assessing whether it should offer its own technology apprenticeships.

Some firms are forming internal digital teams and establishing separate brand identifies. Others are relying on acquisitions. There has been consolidation at the top of the industry; PwC acquired Booz & Co last year, now rebranded to Strategy&.

Yet so far no one has developed a clear winning strategy. “There is no one size fits all approach,” says KPMG’s Mazhar.

While demand for everything from big data to artificial intelligence is surging, industry executives say that the digital work done so far has only scratched the corporate surface.

Phil Dunmore, head of consulting for the UK at Cognizant, says more than 60% of the firm’s consulting pipeline is driven by a demand for digital services. “The need for clients to change to be competitive in the digital arena is now crucial,” he says.

But further growth abounds. “Once companies have fully embraced and implemented ‘digital’, we shall see organizations fine-tuning specific digital features and functionalities.”

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