Is technology a differentiator anymore?

Every year we survey thousands of clients, asking them to tell us about the world’s leading consulting firms. In the last few years, the likes of IBM Services and Accenture have topped the ranking when we ask clients about the quality of work delivered. In part, it’s because when digital transformation hit the business world like an almighty tsunami, clients were desperate for consultants with proven technology experience to solve issues ranging from strategy to operational improvement to risk. Technology expertise lifted the scores of technology-heritage firms (consulting firms that are part of large technology businesses)—even in areas that aren’t obviously about technology.

Both firms still fare well in the eyes of clients, but our data reveals three reasons to think that the days of the technology halo are over.

  1. The three firms that have improved clients’ views about the quality of their work the most since 2018 are strategy firms—and it’s mostly caused by an improvement in business-led services (by which we mean services like business strategy, operational improvement, risk management, and more*).
  2. Eight of the 13 firms we ask about see a greater improvement in the views about their business-led services than technology-led ones.
  3. The only firms to move backwards in any way are technology firms. The story is different for each of them—some have improved in technology-led services, others haven’t, while one improved in business-led services. But overall, all three are, at best, standing still.

What does this tell us about the market? Perhaps the first observation is that firms’ investment in their technology capabilities is paying off—almost every firm saw an improvement in perceptions of their technology work, which includes the all-important area of digital transformation. But, as all firms become quite good at technology advisory work, technology-heritage firms no longer have a competitive advantage.

It follows that if technology is blurring into everything else, then the everything else becomes a lot more important again. We’ve lost count of the number of clients who tell us that their transformation programmes failed because they were too technology-led. Organisations are now keenly aware that technology is just a tool, not an end in itself. Expertise in the ‘old’ disciplines—strategy, operational improvement, change management—are perhaps becoming king again, albeit in a new, technology-enhanced form.

*We appreciate that this is a difficult distinction to make, and one that can be argued about until the cows come home, but for this analysis we’ve put data & analytics, digital transformation, legacy technology, and taking advantage of AI and robotics in a bucket and called them “technology-led” services, and everything else into “business-led” services.