Independent strategy consultants will be a vital resource for businesses in 2019 looking to defy slow economic predictions and bring to market cutting-edge propositions that take advantage of new technologies.
Global economic growth is predicted by IHS Markit to slow to 3% in 2019 and growth in Europe will fall further to 1.5%. With the current political uncertainty in Europe and these slow growth predictions for the region’s economy, businesses will need flexible talent and access to expertise in order to face strategic challenges and stay competitive in their markets. Despite historical data showing that the consulting industry follows global economic trends in times of turbulence, the advent of the flexible workforce in recent years will enable businesses to access the same expertise without incurring comparably large consulting fees from traditional consulting firms.
The impact of digital technologies continues to be the prevalent factor in business strategy for 2019 and beyond; the application of digital technology to drive revenue growth and operational efficiency is firmly set as a priority across sectors, including those historically more resistant to change such as automotive and utilities.
So what can independent consultants expect in 2019?
Consulting for the CFO
2019 will see an increasing number of consulting projects originate from the CFO. The role of CFO is changing and these leaders are becoming agents for transformation across their organisations. McKinsey’s Global Survey shows the responsibilities of CFOs broadening in the last two years and an increasing number of CFOs now leading strategy, transformation and digital agendas.
Responses showed an increase from four to six functions reporting to CFOs, including areas of high impact such as board engagement and digitisation. There has also been a meaningful increase in the number of CFOs leading corporate strategy agendas from 14% in 2016 to 28% in 2018. The majority of respondents said that the CFO is actively involved in transformation strategy and that the CFO, after the CEO, is most likely to initiate a transformation. So, independent consultants are now more likely than ever to find themselves engaged on a strategic project by the CFO.
Manufacturing Smart Connected Devices
Strategic decision making in the manufacturing sector this year is likely to centre on companies’ digital capabilities. Major industrial manufacturers can no longer rely on sheer size and a range of traditional machinery for reliable revenue streams; the need for increased efficiency and new sales growth has made a shift in business model imperative.
Growth is most likely to be seen in the production of smart, connected devices which Capgemini Digital Transformation Institute‘s recent report estimates will create value-added revenue of between $519-$685 billion for the global manufacturing industry by 2020. As such, manufacturers must develop new propositions to get ahead of the competition and they need to tackle any roadblocks preventing them from scaling their digital efforts. Capgemini’s report revealed that manufacturers plan for nearly half of their products to be smart and connected by 2020 and 18% are looking to change to a service-based business model.
McKinsey’s Operations Practice has seen digital disruption hitting the automotive industry hard and they emphasise the need for OEMs to get ahead with scalable transformation programmes, service based propositions and the right talent. There is a lot of opportunity up for grabs in the sector such as electric vehicles, shared-mobility business models and self-driving cars, so “automotive companies are scrambling to catch each new wave”.
We anticipate that 2019 will see industrial manufacturers undertake a strategic shift in business model, the design of new propositions and the transformation of their operational capabilities to support the new digital age.
Innovation in Healthcare
Independent consultants with an interest in healthcare and life sciences have a lot to be excited about in 2019. Disruption in the healthcare sector is accelerating with new opportunities for medical device manufacturers and healthcare organisations to get ahead of the competition.
Medical device manufacturers are utilising new data sets in their strategic decision making and deploying artificial intelligence and machine learning for significant improvements in device development and clinical R&D. Meanwhile, Forrester predicts that healthcare providers will invest in virtual care technologies and artificial intelligence to improve patient experience and give personalised and convenient care.
Independent strategy consultants can provide much-needed support in translating new data sets into actionable insights, as well as advising on how to redesign organisational structures to embrace new demands on the business.
From a practical perspective, independent consultants and employment businesses will also need to use 2019 to prepare for anticipated changes to IR35 regulations expected in April 2020. While ambiguity remains as to exactly how regulatory changes will be applied to the private sector, planning ahead of the game will help avoid unnecessary complications with HMRC. Seb Maley CEO of Qdos advises in the FTAdvisor that the “incoming changes are manageable” and that independent contracting in the private sector will largely remain legitimately outside of IR35.
So, in 2019 many clients will face a critical juncture where the right talent and expertise could see them take advantage of new opportunities and prosper. We look forward to exploring these strategic projects with our network of independent consultants.