Ever because the pandemic, corporations have been grappling with an ideal storm of operational challenges resulting in a giant shift within the function consultancy corporations play of their shoppers’ development and transformation.
Whereas conventional advisory providers nonetheless have an necessary function to play, recommendation alone is now not sufficient for a lot of corporations to unravel their operational shortcomings. As an alternative of being instructed what to do, companies are more and more searching for strategic companions to step in and run issues for them, altering the function of consultants from advisors to operational companions.
This shift is being pushed by a number of essential enterprise challenges: maintaining tempo with speedy technological change, sustaining agility amidst financial and geopolitical volatility, harnessing AI, and staying resilient towards rising cybersecurity threats. These challenges are compounded by a world expertise scarcity as corporations lack the individuals, expertise, know-how, and capabilities wanted to remain aggressive and meet development targets. Consequently, they’re turning to consultants and strategic companions to bridge these operational gaps.
From advisors to managed providers suppliers
In response to this demand, many established skilled providers corporations are evolving what they provide shoppers past conventional consultancy to develop into totally fledged managed providers suppliers. This permits them to take over the end-to-end administration of core components of their shopper’s companies when the shoppers lack the mandatory expertise and assets.
Market evaluation is reflecting this pattern, with Statista predicting the managed providers market will develop right into a $500+ billion business by 2028, up from $279 billion in 2022. That is partly as a result of breadth of operational experience corporations are searching for from managed providers suppliers, together with managing threat and compliance challenges, delivering cloud and knowledge transformation, and working tax, authorized, and finance capabilities, in addition to numerous buyer and provide chain administration actions.
This may sound much like conventional outsourcing however there’s extra to it. Not like conventional outsourcing, advisory corporations can mix their current deep subject-matter experience with the brand new operational capabilities that they’ve constructed. They act as each strategic advisors and supply companions, reworking enterprise capabilities whereas managing them for shoppers.
The twin function is proving to be a sexy choice for the C-suite as a result of it shares the chance and accountability of delivering transformation whereas offering entry to the essential expertise they’re missing. It additionally provides companies entry to the superior know-how they’re lacking.
Expertise gatekeepers
In our latest CEO survey, 56% of CEOs recognized technological change as the first driver behind their transformation plans for the following three years. That is prompting advisory corporations to construct out their networks of know-how companions to provide their managed providers shoppers entry to the tech they want plus the talents to deploy it.
For instance, PwC’s partnership with Sage, the U.Okay.’s largest listed tech firm, supplied 150 managed providers shoppers with monetary insights to enhance effectivity, simplify operations, and cut back prices final yr. PwC additionally introduced a partnership with OpenAI to develop into the primary reseller and largest enterprise person of ChatGPT Enterprise know-how, providing shoppers entry to the newest AI instruments and applied sciences.
Our opponents, together with different Large 4 corporations, are additionally constructing out their choices to help shoppers’ rising operational challenges, shifting at tempo to associate with established tech gamers or purchase promising startups to cross on innovation to shoppers through managed providers offers.
BCG just lately introduced that it expects to make a fifth of its income this yr from serving to shoppers combine AI into their enterprise, supported by its tech partnerships. Equally, our far-reaching ecosystem of know-how alliances is proving to be a draw for shoppers wanting—and needing—entry to the fitting know-how at pace.
However having the talents and know-how alone isn’t sufficient. It’s how managed service suppliers deploy them intelligently that counts.
Versatile groups, versatile charges
The rise of managed providers is prompting corporations like ours to adapt our staff constructions and charge fashions, with a giant emphasis on flexibility.
We all know that corporations are struggling to recruit for essential roles, with 26% of CEOs citing expertise scarcity as the largest threat to their enterprise. Accessing the capability and functionality they want through a managed service—particularly when it may possibly flex up and down to satisfy their wants—is an answer that increasingly more advisory corporations are providing. In flip, that is resulting in new forms of charge fashions, shifting away from conventional fixed-fee or time-and-materials fashions to charges primarily based on quantity, outcomes, or subscription-based fashions.
Because the enterprise and labor panorama continues to demand ever extra agility and adaptableness, we’re more likely to see the managed providers market proceed to develop at tempo. In flip, these blended, versatile approaches to groups, assets, charge fashions, know-how, and partnerships will develop into the norm for the way companies interact with their consultants and strategic companions.
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