Smaller, cheaper consulting firms are growing as they manage to keep their overheads low while offering the services of experienced professionals.
Boutique consulting firms are thriving during the pandemic by offering the services of the large branded firms at rates that are up to 60 per cent cheaper.
These smaller firms, typically run by alumni of the major firms, sell themselves as being top-heavy with seasoned professionals and with fewer overhead costs.
It's an appealing pitch for clients looking for experienced consultants without the price premium associated with a branded firm.
While the large general consulting firms, such as the big four – Deloitte, Ernst & Young, KPMG and PwC – and tech consultancy Accenture, remain the choice for large company transformation projects, these cheaper boutique firms are undercutting them for smaller projects.
The rise of the boutiques has accelerated, in part, because the COVID-19 pandemic has created a more challenging environment for the big four and Accenture in which projects are becoming shorter, sharper and cheaper.
The boutiques represent yet another threat to the pyramid-based business model of the large firms where a small number of partners typically delegate work to a larger number of smart, junior professionals.
The boutique pitch – experience at a lower price – is similar to the one long used by independent consultants and online consulting platforms such as the Internal Consulting Group.
One alumni-led firm that has grown during COVID-19 is Fifth Frame, founded by former PwC consultants Jon Williams and Laura Applebee-Jones.
Fifth Frame provides "people advisory" services that include helping teams define their purpose and values, performance improvement and organisation redesign, Applebee-Jones, a former PwC director, says.
"The most important thing we are seeing is our best clients are using COVID as an opportunity to accelerate change, not just survive the downturn," Applebee-Jones says.
Williams, a former senior partner at PwC, says there had been a “very brief pause" in client demand in April but this quickly picked up after the initial shock of the coronavirus outbreak wore off.
Source: Australian Financial Review