Digital gap between small and large consultancies grows

15 March 2023 Consultancy.uk 2 min. read
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Automated processes and artificial intelligence are increasingly being wielded by consultancies looking to devote more of their staff’s time to value-adding tasks. However, a new study suggests that smaller players in the market are struggling to keep pace with its largest operators.

A 34% portion of consultants surveyed by Pointerpro said that clients want ever-faster results. Digitalising services provides an opportunity for consulting firms to scale up and gather pace – with mechanisms such as Robotic Process Automation enabling software to autonomously carry out basic tasks across applications. Such digitisation strategies can reduce the burden of repetitive, simple tasks on employees – and free them up to take on work which can bring in revenues for a company.

Not all firms are finding it as easy to access these opportunities, though. Pointerpro spoke to 550 small and large consulting firms around the world, and found that a yawning gap now exists when it comes to implementing digital capabilities. Smaller firms cannot afford to take up digitalisation at the rate of larger operators, and so they struggle to compete with them for business. In turn, larger firms are more able to accelerate their digitisation, further enshrining their competitive advantage.

Strategic vs Competitive Tasks + Is Digitalisation a threat to your employment?

Illustrating this, while an average of 55% of consultancies indicated that they still largely supported their clients manually, this rose to 69% when only smaller firms were accounted for. If they do already use digital tools, this is mainly for back-office applications such as invoicing or time recording. Due to this, 66% of small firms – those bringing in turnover of less than €5 million –  suggested they were ‘no match’ for biggest competitors, or those with turnover in excess of €30 million.

When asked how they thought they could catch up, 58% of smaller firms told the researchers the key was to find more resources for innovation and digitisation. This in turn is putting their employees on edge, however, with many seemingly fearing that their salaries might be among the ‘resources’ identified to help fund new innovations. Even though most consultants at smaller firms suggested they would like more digitalisation in theory, in practice around 40% feared that further digitalisation would lead to job losses – with anxiety greater among younger colleagues, who typically have less clout within firms as they occupy more junior positions.

Pointerpro CEO Stefan Debois argued this needn’t be the case, though, stating, “The consultants themselves say that on average 43% of their time is spent on repetitive tasks. If these tasks are (partly) taken over by digital tools, more time is available for high-quality, more strategic tasks. And this is precisely where consultancy firms can make the difference. Firms that dare to invest in innovation and digitalisation – including the smaller players – can strengthen their competitive position, offer better and more efficient services and upscale their company.”