Online Consulting Threatens the Traditional Consulting Services Model, IDC Warns

FRAMINGHAM, Mass — Online consulting has the potential to disrupt the consulting services industry. According to IDC, consulting services offered online are well suited for the changing marketplace, which demands agility, timeliness, efficiency, and responsiveness. However, few consulting firms have stepped into this arena, and therefore, many are at risk of coming under a stealth attack.

"Online consulting possesses the same characteristics as a disruptive technology and consequently has the potential of initiating a stealth attack on consulting services firms and their current business models," said Marianne Hedin, PhD, manager of IDC's Consulting Services research program.

Harvard Business School's Clayton Christensen introduced the idea of disruptive technologies. They are technologies that are overlooked because they don't support conventional principles of good management, such as high profit margins, broad market reach, or even what customers say they want.

However, over time, these technologies usurp or destroy the market leadership of those who ignore them.

Currently very few consulting firms offer consulting services online, and many have reacted negatively or indifferently to the concept because of its initial low profitability and its potential to cannibalize traditional consulting methods. However, IDC believes there is market demand for online consulting and warns firms that are not prepared to offer this service risk losing their market share and competitive edge.

"Consulting firms that have thrived with double-digit revenue growth throughout the 1990s can't afford to be complacent about the Internet's impact on their business. They can't ignore the potential threat of online consulting," Hedin warned. "The firms that continue to succeed will reengineer their business models and integrate offline with online consulting."

In its new report, Will Online Consulting Lead to a Stealth Attack on the Consulting Industry? (IDC #B21184), IDC analyzes how online consulting will affect the consulting services industry. The report discusses the concept of disruptive technologies and then reviews why online consulting could be considered one. It then presents hypotheses on how the consulting services firms will respond to online consulting. To order a copy of the report, contact Sally Donovan at 800-343-4952, ext. 4219 or at sdonovan@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 42 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group , the world's leading IT media, research, and exposition company.

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