IT consulting firms - How to compete in 2022?

1. The search for expertise and a strong consumer demand for IT services and consulting

IT services and IT consulting are high consumer demand and a shortage of talents that work in IT or digital professions. The last few years have shown that companies have more and more digital needs, but they lack the in-house expertise to execute these said needs. Therefore, it is more cost-effective for them to use specialized consultants in the field rather than create new positions. 

But where are these talents so sought after today? Candidates are afraid of joining a IT Services which plans to assign them to clients for a certain period of time (ranging from a few weeks to several years, according to this Sfeir article) without them having a say. This perspective sometimes clashes with the personality and ambitions of many developers and IT experts. 

Although a position in an IT services company is a great opportunity to expand one's network and acquire new experiences, some employees would rather not commit themselves. 

An article from Forbes sheds a little more light on the “war for talent” that is currently raging in IT. Indeed, “ the need for IT skills is exploding. According to Eric Hazan, director of McKinsey Digital in France, the need for tech skills is expected to increase by 90% by 2030 .

And, the developing talent shortage is visible. After some reflection, talented prospects prefer to go freelance for the freedom to choose their own assignments and clients and for the possibility to decide their own rates and plans. 

The majority of those concerned are from generation Y, a generation known for their love of flexibility and the best deals.

“ This is evidenced by the increase in the number of freelancers on the market today (+145% over the last 10 years according to Eurostat)”.

Syntec Numérique indicates that 85% of IT services companies are struggling to recruit and retain staff, which is impacting their ability to meet their clients' needs. This phenomenon calls into question the stability of the IT services industry over the last few years. What is the reality in 2022?

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2. The digitalisation of platforms in the economy

As mentioned earlier, the talent market is changing. We are now witnessing a digital transformation of recruitment methods. Freelance platforms are booming, reflecting the new demands of the market. These changes represent a real challenge, even a danger for IT services and IT consulting companies.

Why are platforms challenging the field of IT services and IT consulting?

Freelancers are showing more and more interest in freelance platforms that can afford to be ever more selective. Forbes gives the example of a platform that rigorously selects candidates: crème de la crème. This platform specializes in digital marketing, tech, and data, with an acceptance rate of only 10% per month. Despite this competitive nature, the success of these platforms should not be overlooked. They meet the needs of large companies in an increasingly direct manner with automated queries and immediate results. However, they often do not provide the quality that IT services companies demonstrate by putting forward known candidates with proven experience.

Photo by LAUREN GRAY on Unsplash

In addition: How to support your teams towards digitalization ? 

3. How can one compete?

The competition is tough, but the IT services and IT consulting companies have something to prove and can keep their place in the market. According to the Journal du Net, their strength lies in their consulting capabilities and their mastery of technologies and market offerings. It is important that they continue to make recommendations for offers adapted to the needs of clients and that they work with the IT department, highlighting their advantages.

The best way to compete is to take advantage of their innovative ideas and apply them to their own companies, which is why many IT services and IT consulting companies are developing platforms of their own. They are different from the freelance talent platforms we mentioned earlier, but they offer IT services that freelance platforms cannot. Some platforms even offer e-learning features as a complement to their services in order to diversify and differentiate their offer. 

Nothing is lost for IT services and IT consulting. The market is changing, but companies still trust them. More and more companies are turning to digital services companies in order to benefit from multiple expertise for the same digital transformation project (which is more difficult to do with a platform of independents).

Having clients such as small- and medium-sized enterprises is an advantage for the industry, as it opens the door to long-term partnerships and security. In the end, they are looking for simple and reliable tools, as they do not have these skills in-house.

THE IT Services must also find how to continue to meet the needs of larger companies, which are looking for more in-depth expertise for their projects. They are now more likely to call on independent experts.

4. What is the growth trend for IT services and IT consulting in 2022?

According to the Syntec Numérique report for 2020-2021, the IT services and IT consulting sector was the second least affected by the Coronavirus crisis. And, like the rest of the digital sector, the sector had positive growth in 2021: +4.4%. These figures show that IT services and IT consulting companies do not lack the resources to adapt to any kind of situation. Whether it is a crisis or ever-increasing competition, they know how to innovate and stay in the race.

In a 2017 article on the Apax website, Alexandre Ménard, Associate Director of McKinsey & Company states that, "companies expect to dedicate 75% of their investments to digital by 2025." This will bring new players into the digital arena according to him: "digital specialists with cutting-edge technologies or internet giants that are turning to BtoB."And, we can see that this is definitely the case today. Ménard predicted strong growth in the IT market due to the rise of cloud software and the implementation of applications.

SMEs and large companies depend on cloud software and many other software products, a positive for the IT market and other software companies. As a result, the software is outpacing the IT services of the IT services and IT consulting companies. But, these companies have been able to pull the right levers to meet the challenge.

How can IT services and IT consulting companies make the most of their opportunities?

Several approaches are possible. Between a dedicated business strategy, a local approach, specific offers, and processes that can be automated on a large scale, you have to find the option that works best.

In addition to this:

• Managing your employees well is the key to ensuring that they take their work to heart and respond to the needs of their customers effectively.
• Do not underestimate the results of good digital marketing and lead nurturing. A word of advice: always create content and work on branding.
• Continue to recruit and promote the talented employees.
• Set long-term goals and have a vision for the company.

Despite the big international leaders, " French IT services and IT consulting companies have managed to find their place" according to Ménard. There are many solutions to ensure positive growth for them. Various strategies have been implemented, and the constant evolution of the digital market will most certainly lead to new ones! That is the challenge today: to constantly adapt and innovate with creativity while remaining constant.

Additional resource: Discover how to increase your performance with an ERP for ESN

Also read our article on the NSE market in France.