What is Asset Based Consulting, this growing trend in Consulting?
With a 12% growth rate achieved last year, the consulting industry confirms its good health and industry leaders are optimistic about the close future for their company.
But consulting is constantly evolving and is not spared by technological transformations that are affecting the way people work. A recent trend starts picking up in consulting: Asset Based Consulting.
What is Asset Based Consulting? Here is a summary of this new type of consulting and the benefits it brings to clients.
What is Asset Based Consulting?
Before we understand what lies behind the concept, it is important to define precisely what the it means. Asset Based Consulting is a type of consulting in which tools and products are the main assets in the offer instead of human capital usually promoted in traditional consulting proposals.
The first firms that started selling this type of offer were McKinsey, KPMG and BCG. In Asset Based Consulting, it is the Intellectual Property sold into the products and technologies that is being sold. When consulting talents are in general the main answer to a client issue, tools and software are in ABC the way to respond the client’s need.
The aim is to build products or tools that will produce what consultants could have realized over the cours of a project, and let the client use them on a regular basis instead of working with regular consultants. For instance KPMG, has developed financial advisory software solutions that replace financial audit projects led by their teams until then. With Artificial Intelligence embedded in their solution, the software analyze accounting data and offers financial analysis and advice. KPMG clients can use the solution on a regular basis, once per quarter for instance, and receive immediate analysis to help them make data-driven decisions. KPMG sells this solution through a subscription model which is less expensive for its clients while bringing value all year long. KPMG also wins as they build recurring revenue and very scalable solution that can be used by smaller firms who were reluctant to work with KPMG until then.
Asset Based Consulting is obviously not the solution to everything, because IA is unable to acquire specific human skills,
even with the most powerful IA. However ABC is an important trend in consulting and it should be taken very seriously by strategic teams at consulting firms. Many startups have started building solutions able to analyze gigantic amount of data and bring insights to clients at a much lower cost than consulting projects.
It is critical that consulting firms work on their own strategy to bring automation tools to their clients, eliminate repetitive tasks for their teams and focus their value proposition towards deeper recommendations and project management, areas where IA is still weak and unable to compete with humans. PwC has launched , its Cloud Transformation lab a few years ago. This lab builds and sells all sorts of automation tools for their clients while maintaining their teams for the project management phase, that their talents can better tackle than machines.
Asset Based Consulting benefits
1. A solution to geographic challenges
While most consulting project require to travel on-site to understand the full extent of a client’s issue and make better assessment, Asset Based Consulting is a very scalable solution that can be sold everywhere once it is built and optimized. Usually it requires slight adjustments to fit specific client’s needs but it can easily bring value at a very limited cost. The set up and maintenance can be done from abroad, as well as trainings and customer support.
2. A good answer to new kind of problems
It has become much easier for companies to find information about their competition, their market and its evolution thanks to numerous content offers that have developed over the past few years (CB Insight, Forrester,…). Information, which used to be a critical part of the value proposition in consulting project is no longer only accessible to consulting firms. Client have new expectations, for which they hope to measure the ROI. And it is precisely much easier to measure and track the ROI of an Asset Based Consulting solution.
3. La réponse à une nouvelle forme de demande
Clients more and more require « self-service » answers to their problem. This need for independance is strengthening as software solutions are becoming smarter and less expensive. Clients now demand the right information, at the right time, at the right price. Companies have lost patience for long transfomation projects, complex deployments that take months. Companies similar to our society as a whole prefer repeated, immediate and easy consumption instead of waiting longer even if the result is more detailed and complete.
Asseet Based Consulting is not just a trend in consulting, it is deeply changing the industry because it fits a growing need for traditional clients of consulting projects. Consulting firms that will develop the right strategy early on will be the winners of this transformation. It is still a massive opportunity for consultants as the offer remains in its infancy.