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How Digitalization Is Impacting Professional Services (Trends)

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August 24, 2021
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2 minutes
Lynn's diverse perspectives on business stem from her extensive experience as a management consultant - her role as a beloved wife, mother and grandmother adds further depth to her insights.

Digital transformation is no longer something that consultants advise their clients about. It is disrupting consulting services themselves.

For instance, talent is the core asset for professional services. Yet, growing consulting industry trends are to outsource talent and move towards online consulting platforms. Is it possible that consulting companies in the future will have no employees?

A recent industry paper, titled 'Professional Services on the Brink of Disruption' from the software company SAP, raises some interesting questions and paints a picture of how to reimagine the industry. All consultants, whether they work in large firms or independently, might well take note.

Key Areas Being Impacted By Digitalization

The traditional service model for consulting has been to provide highly skilled professionals to clients. Basically, fees have been time-based, and profits have come from the difference between these fees and salaries and overheads. There has been a linear correlation between the growth of the business and headcount.

However, this is set to change. Fees will increasingly be outcomes-based, and independent freelancers and consulting platforms will provide the requisite skills without growing the employee numbers.

According to SAP, digitization will impact these four main areas in the services sector:

  • Expertise:

    Rather than face-to-face client engagement as the primary methodology, consultants will digitize their knowledge and experience and make it available on a usage or outcome basis. This requires demystifying service offerings and forces firms to reconsider what value they are adding. Knowledge-as-a-Service will become the new product.
  • Talent:

    Consulting firms will source and integrate services from external talent networks to construct complete solutions for clients.
  • Service execution:

    Technology will automate and scale services that were previously people-intensive. It will also provide solutions that were not available before.
  • Customer engagement:

    Acquisition and transactions with customers will increasingly be automated via self-service methodologies.

Digital transformation is shifting the balance of power to the customer. So it is not just consulting business models that will change. Business processes must be agile and responsive to client needs, with intellectual property embedded into automated service.

The balance of power is also shifting to independent consultants. Established firms can expect new entrants with new skills to disrupt the market as digital delivery lowers the bar for entry.

“By 2025, online talent platforms could boost global GDP by $2.7 trillion.” - McKinsey Global Institute

Will Service Companies Be Automated?

We’ve been hearing about automation for years and quoting statistics on- the number of routine jobs machines will replace. Now, the focus is shifting to knowledge workers.

As far back as 2013, McKinsey predicted that algorithms would displace 140 million knowledge workers. According to current projections, machines can replace 94% of accountants and auditors, 66% of legal associates, and even half of computer programmers. Customer service is another target. Very few of us have not had a conversation with Apple’s Siri or an online customer service bot. We also see machines taking over the authoring of legal documents, market reports, and shareholder reports.

Automation in Legal Services

Digital transformation is rapidly happening in legal services. For example, you can automate document creation and workflows – this might include the multiple notifications to all parties that are currently a labor-intensive part of legal practice. Templates for contracts and agreements should readily be available to clients. Artificial Intelligence can handle high-volume repeatable tasks. A US legal firm has reported that its autonomous robot lawyer contested over 250,000 parking tickets, winning 64% of them. These changes mean that lawyers must rethink what value they add and how they will monetize automated material.

Automation in Management Consulting

In the management consulting industry, jobs most at risk are those at the entry level. The old business model is over where senior partners negotiate deals and communicate with C-suite execs while juniors are deployed to do the work. In general, those juniors are simply implementing company-designed solutions and learning the tricks of the trade at client expense. Today, you can codify anything into rules and automate it and offer it to clients as an alternative to face-to-face interaction.

The risk to consulting companies is the wide availability of expertise freely available on the internet. They are countering this with software and technology-based analytics and tools that customers can use on a self-service basis. To maintain long-term client relationships, they are often embedded into the client’s own systems (much like the Microsoft and Apple business models). Moreover, digital delivery like this is cheaper and more scalable than traditional approaches.

This does not mean that in-person and face-to-face consultation will vanish. On the contrary, the demand for strategic and judgment-based solutions will grow. But this will be for custom solutions to complex problems, and consultants will have to justify and motivate them.

The Digitalization Of Talent


Linkedin is an excellent example of how talent has been digitalized.

It is a professional network of nearly 750 million members and over 55 million registered companies in more than 200 countries. It is a major recruiting site. During 2020, there was a six times increase in the number of remote postings in the US.

An interesting statistic is that LinkedIn is almost 300% more effective than Facebook or Twitter for generating leads. According to the Edelman Trust Barometer, it is the most trusted source of content. It is thus widely used by content marketers for B2B marketing and lead generation.

LinkedIn has added technology to its services. There is a calendar chatbot to facilitate conversations between members in different time zones. AI provides smart replies and suggested responses, and an InMail feature supports chats. Hashtags in comments are for easy tracking, and LinkedIn Video supports the growing preference for business information to be presented in video format.


Similarly, Upwork has recently rebranded and upgraded its services to reflect its role as a work marketplace. This is in response to the changing needs of business, and particularly the increased use of freelancers. It demonstrates the opportunity and abundance of work available to those who want flexibility in time and space rather than rigid work contracts. Upwork now has a client base that includes 30% of all Fortune 500 companies, as major enterprises increasingly add external resources to their hiring plans.


Some platforms are more specialized. For example, Consultport provides pre-screened management consultants and digital experts together with a combination of automated and people-driven administrative, quality management and payment services.

The bottom line is that recruiting strategies are changing, and online consulting platforms are increasingly becoming the source of talent. They represent an integral part of digital transformation in services. According to a McKinsey report, “By 2025, online talent platforms could boost global GDP by $2.7 trillion.”

What Changes Must Independent Consultants Make?

We sometimes read about consulting industry trends but don’t internalize what they mean for ourselves and our own businesses. Whether one-person start-ups or established firms with many employees.

There seem to be some essential pointers in the SAP list quoted earlier. Consultants may want to consider the following questions:

  • Digitalization of expertise:

    What differentiates our service offering from others in the marketplace? Are there any aspects that you can digitalize and offer to clients as a self-service model? Where will face-to-face interaction add high value, and how can you properly market this?
  • Digitalization of talent:

    How well have we set up our profiles on the online consulting platforms available to us? Have we included ways that our skills and expertise can complement others to offer full service to clients and recruitment agents? Do we network sufficiently?
  • Digitalization of service execution:

    How can we do more for less? For example, can we use data analytical tools to speed up our company reviews and give more time to value-added analysis? In my consulting business, we spent what seemed to be a lot of time and money to automate and integrate the results of psychometric assessments into standardized reports. The outcome was gratifying, as we could immediately use the results to give strategic selection and development advice to clients. We were also able to take on projects involving hundreds of participants rather than being limited by manual scoring and report writing.
  • Digitalization of customer engagement:

    Customers tend to go online to research products and services before making buying decisions or requesting bids for their projects. So, how effective is our online presence? This includes providing publications, blogs, and videos that demonstrate thought leadership and generosity in knowledge sharing. You might also want to consider more complex systems to track what clients are reading, guide the order they access it, and present personalized content.

Suppose the work traditionally done by junior consultants is increasingly going to form part of a digitalized service. What is the route, then, for young graduates and older people who want to step into the freelancing space? It seems to us that it will be pretty much the same as before. Large firms still need to grow their skills base and have a longevity plan. They just don’t have to employ everyone. Instead, they will search online for the best candidates for each project and keep going back to those who have learned their methodologies and delivered well. A new kind of remote mentorship is likely to evolve.

Graduates and new consultants will continue to learn and thrive, provided they tap into resources like online consulting platforms and look for opportunities to collaborate with others on large projects. Networking will become an essential skill.

Digitalization Transformation Opens The World For Consultants

One of the most exciting parts of the consulting industry trend to talent outsourcing is the opportunity it provides to everyone.

Digitalization transformation of established consulting firms will embed their technologies into their clients’ systems, empowering the clients, and locking them in far beyond what was possible before. Online consulting platforms are themselves part of the digitization process and open the world for independent consultants.

Everyone will have to rethink and reimagine their value propositions and how they will digitize and monetize their expertise. But everyone has a better chance of success.