IT and Business consulting blurring

The accelerated convergence of business and IT processes has also meant the blurring of lines between IT services vendors and traditional business consultants, according to Bo Di Muccio, program manager for consulting services at IDC. Paul Weinberg reports at echannelline.

"This increasing link is causing all of the general management consultancies [i.e. strict business consultants] to build up their technology focused capabilities. Five years ago, there would have been completely different lists of companies doing IT consulting and business consulting; now there is more of an overlap."

"The growing convergence of business and IT -- in dialogue and in fact -- has obscured many of the strict distinctions between the IT and business sides of consulting services. While the nature of the activities and players in these markets still warrant treating IT and business consulting separately, the primary implication of this convergence is that the business consulting market is more closely tied to IT than ever."

All of the four top GMCs -- McKinsey, Boston Consulting, Bain & Company and Booz Allen Hamilton --- are also conducting consulting in IT, CIO advisory, intellectual property and outsourcing, observed Di Muccio.

In addition, he continued, the large accounting firms are quietly rebuilding their consulting practices that include the addition of IT to the mix as their post Enron agreements to stay out of consulting are expiring.

Although IT vendors like Hitachi and Fujitsu are looking at getting involved in business consulting this is not an area for the novice, continued Di Muccio.
"This is not an easy market to enter. The expertise around the business process is not something you develop over night with limited capital."

The other issue facing the GMCs now offering IT consulting involves the shortage of IT talent, some of which is already being monopolized by the IT vendors, Di Muccio stated.

While IT vendors acquire companies, business consultants tend to grow "organically," he noted. "Business consulting has been growing more slowly than other areas of consulting."

As business consulting services rush out to hire IT talent and build up technology expertise "their ability to deliver across business and IT functions is becoming less and less of a potential differentiator," added Di Muccio.

"Therefore, business consultants will increasingly be forced to find other ways of differentiating themselves, and one example is through the productization of business consulting offerings."