learning from Accenture on growing consulting revenue
how to drive tier-2 and niche firm consulting revenue growth in 2021
learning from Accenture
I nearly joined McKinsey, loved my time at Accenture and over the years enjoyed great experiences with folks from McKinsey, Bain, BCG, KPMG and Deloitte.
This is my take on how the market leader, Accenture, achieved outstanding growth these last 30 years, and how tier-2 and niche consulting firms of 200 to 20,000 headcount can grow revenue in 2021.
Accenture’s early growth
Accenture’s market leading growth to 33,000 employees by 1995 was driven on two pillars: global systemisation of every aspect of the business and supporting clients looking to adopt new technology.
To sustain that growth, Accenture learnt how to assimilate experienced hires into manager and partner roles (fortunate for me), as it was going to be too slow to only promote talent from within. This was a significant culture pivot that created a whole range of new challenges, which the firm overcame, fast.
Then in 1997 came the difficult split from Arthur Andersen, resolved by arbitration in 2000, the year Andersen Consulting rebranded to Accenture - a name chosen by crowdsourcing ideas from employees, with the winner a Norwegian employee, Kim Petersen, who conceived Accenture from “accent on the future”.
30 years later we see technology and ingenuity at the heart of the brand:
At the same time the firm responded rapidly to a global market expectation for consultants (and investment bankers) to genuinely understand the industries they are advising - rather than charging premium fees to learn on the job whilst applying a generic tool kit of skills across strategy, process, change and tech.
For most of the tier-1 firms this market expectation gave birth to a matrix org design of market verticals and skills-based horizontals. The speed, scope and thoroughness of execution at Accenture was breath-taking. I learnt heaps, but that was just the beginning.
Accenture’s rapid expansion
From the year 2000 it only took 15 years to grow to a staggering 358,000 employees and US$31bn revenue; now ~505k employees and ~$50bn revenue.
Whilst Accenture has continued to support clients on adopting new technology, this 10-fold growth came mostly from partnering with clients on operations.
That is, rather than only pursuing one-off consulting projects on improving the client’s business, from the mid-90s Accenture pitched to run part of the client’s business. Enter, recurring revenue.
As an early pioneer of large scale business process management, Accenture’s approach to the client relationship was sophisticated and founded on:
- Accenture continuing to apply world’s best practice to improve the client’s outcomes, often against a comprehensive baseline that was agreed with the client upfront
- Sharing the commercial risks, investments (time, money and/or resources) and upsides
- Long term deals that embraced a collaborative mindset as business partners
Even in the face of COVID-19 and global upheaval, Accenture has continued to grow:
Accenture’s strategic advantages
Although these run part of the client’s business deals have more expensive sales cycles and lower margins than consulting, four strategic advantages have emerged for Accenture:
- One deal leads to more deals per client (e.g. start by running “accounts receivable” within the finance function, and end up running most of finance, ITC, call centres and supply chain operations, thereby freeing the client to focus on strategy, marketing, R&D and customer experience)
- Most deals lead to more (non-competitive) consulting projects
- Deep technology and process insights in one sector, help to win more deals globally in that sector
- Proven stars from running operations on one deal become a valuable source of talent for winning, running and improving other deals
I believe most tier-2 and niche consulting firms of 200 to 20,000 employees can apply some of these insights to proactively create new opportunities for growth in 2021.
what can tier-2 and niche firms do?
2021 growth opportunity #1 - SaaS technologies
SaaS, meaning software as a service, is a way of delivering applications over the internet. Customers don’t have to buy/install/maintain/update hardware or software themselves. All they need is an internet connection. Customers usually pay per user and/or on a usage basis, with unit prices reducing on volume.
Tier-2 and niche consulting firms often underestimate the revenue potential of supporting clients on how they choose, adopt, rollout and evolve SaaS. Not to mention the almost unlimited consulting revenue potential from having a closer client relationship and a deeper understanding of the client’s day to day business.
I think the latter is a key criteria for consulting firms to figure out which SaaS technologies to align with.
pick sector-agnostic tech that is easy to learn and generates high-value consulting
Aside from outsourcing and industry restructures, there is no better way to drive consulting revenue than assisting clients on their journey to adopt and evolve new technology. That strategy fuelled the first phase of Accenture’s market leading growth.
Clients are increasingly time poor and unable to focus on getting real work done. Client side leaders at all levels seem consumed in cultures of real-time messaging and 247 availability. Many (perhaps most) have lost the time and ability to research, think deeply, plan carefully and execute at speed.
Clients need help to adopt and evolve new technology. Help they are willing to pay for to de-risk implementations and maximise ROI. The consulting opportunities are broader than what you might think:
- high level planning & context validation
- change management & communications
- project management
- requirements gathering
- as-is & to-be mapping
- setting up the tech
- rollout planning
- onboarding the first phase of users
- supporting those users
- building a showcase of successes and learnings
- building the capabilities to support and scale rollouts
- defining success metrics and target outcomes
- managing rollouts progressively
- measuring and learning from outcomes
Below are my top-3 SaaS technology picks to build a consulting services offering around in 2021.
a) SaaS for leading a company
Whilst easy to learn, the product lends itself naturally to driving consulting revenue on both implementations and upselling additional consulting based on real-time insights on what is happening client side. This creates a win:win:win for the client, consultant and #stratapp.
b) SaaS for employee engagement
As well as supporting mainstream HCM SaaS rollouts (e.g. Workday), you could look to support emerging tech in employee engagement and culture building, such as:
c) SaaS for CRM
Ok, I can feel your eyes rolling at the mention of CRM, please bear with me.
Whilst the services market built around CRM is mature and competitive, there is still a massive problem for clients buying a new CRM: failed implementations.
When you look under the bonnet at each product’s design, the top three CRMs (Salesforce, Dynamics and Zoho) are remarkably similar. Clients hire CRM implementation firms that have deep skills in configuring and integrating these products, from a technical perspective. However, these firms are often weak at the broader thinking, validation and planning that clients need for their CRM implementation to be successful.
As a result, most CRM implementations are considered a failure by clients - on value for money, timeframe blowouts, delivery expectations, end user adoption and dashboard data quality.
Implementation firms doing this work usually lack broader consulting skills like:
- business strategy
- business and operating model design
- process mapping and design
- activity-based-costing and value creation
- org design
- risks and mitigations
- thinking through how the above may change next 3-5 years
- building leadership team and senior management consensus on above
- change management and communications
- training planning and delivery
Configuring and programming the CRM has become a commodity service that you can offshore, or price compete onshore, providing you manage the concept designs, validation and functional specs on behalf of the client. You can help clients avoid paying overpriced onshore implementation costs for this work.
You can join the dots on where to take this opportunity.
pick industry or function specific tech that is easy to learn and generates ongoing consulting
There are unlimited opportunities here, so your criteria may come down to what interests your firm, industry knowledge and local market potential.
Here are a few function specific tech examples to help get you started:
- Travel management (e.g. Concur)
- Spend management (e.g. Coupa)
- Rostering (e.g. Deputy)
- Safety (e.g. SafetyCulture)
Industry specific tech is fast emerging in health (including medical practices and pharmacy), aged care, facilities/asset/fleet management, construction, real estate, aviation, hospitality and retail.
2021 growth opportunity #2 - distributed working
COVID-19 has brought to the mainstream what marketing, tech and product teams have known for about 10 years: you can trust most people to work remotely and collaboration tech is way better than email.
Remote and hybrid working implies you have an office to be remote from. We’ve recently seen announcements from dozens of household brands saying they will now allow most, if not all employees, to work from home. Those companies that are keeping an office will need to think through a whole range of factors, work that can be helped by consultants:
- office design and ergonomics for frequent or infrequent visits by home-based workers
- org design (including adding offshore team members to onshore teams) and cadence
- team building, creativity and leadership
- technology that allows you to lead a company from anywhere (e.g. #stratapp)
- balancing strategy and day to day execution
- hiring, induction, performance management, offboarding and alumni
- security and OH&S
Distributed working refers to no office at all. That is, there is no office to be remote from.
Matt Mullenweg, the founder of Wordpress.com, employs 1,200 people across 75 countries without an office. Matt articulates five levels of autonomy in a brilliant interview with Sam Harris on The New Future of Work.
Helping clients on their journey to remote, hybrid and distributed working is a potential consulting goldmine.
2021 growth opportunity #3 - niche operations
Rather than go after large-scale price-driven outsourcing deals, you could look for opportunities that allow you to niche on what you can do better than other providers, and the client doing it themselves internally.
Keep in mind that most of the top tier BPM firms now need to sell a minimum of 25 seats into a client to make the sales cycle and overheads worthwhile; their ideal minimum is 100 seats.
Whereas you can start at two seats and start to achieve the four strategic advantages (see above) that emerged for Accenture.
Even if you only place two people into a client delivering on a niche part of their operations, you can then offer that service globally to other clients, thereby achieving scale and ROI.
Not only will you achieve recurring revenue and a closer relationship with each client, you should then win more non-competitive consulting work and additional operations deals.
Thank you for reading (and hopefully sharing), and thank you to Accenture for the wonderful memories and opportunities to learn and travel.
At #stratapp we are on a mission to make leading a company easier and more inclusive - aligning and motivating everyone on what really matters - here is a quick video on how we do that: https://stratappsaas.com/blog/the-leadership-cycle/.