A race to the middle in India

By B.J. Richards

The Indian consulting market, far more than most others, has a pretty dramatically polarized service offering. At one end of the spectrum, you have technology consulting, which makes up just shy of half the market. On the other, you’ll find strategy consulting, which is responsible for another quarter of all the work done here. And there’s very little happening in between.

Until recently, that was OK – India’s young businesses were generally willing to spend on help with their IT systems and in forming their master plan but were determined to do everything else in house using elbow grease rather than pricey external help. But as Indian businesses mature and seek to compete in the global marketplace, their needs are becoming more sophisticated, and those in-between services that once seemed like frivolous luxuries are fast becoming necessities.

In theory, this should be great news for consultants, and indeed it is – opportunities to build the business abound! But at the moment there’s some doubt as to who will provide these in-between services. In a market where consulting is so much about technology -- and in a world where pretty much all consulting services are becoming intimately bound up with the IT function -- consulting firms and digital agencies don’t look so different to the average buyer. And India’s businesses, at the moment, may not have a clear understanding of why they should choose a consulting firm to handle their (for example) efficiency project over a digital agency. After all, the client expects its efficiency solution will be technology-led anyway, so why not go straight to a provider that that has technology at its heart?

Somewhat ironically, India’s IT consulting firms have actually done a fine job of moving beyond the back office in their foreign outposts – like in the Nordics, where they’ve successfully added a strategic component to their competitively priced IT services to make a very attractive offering.  But many of India’s larger firms have been so focused on conquering the overseas market that they’ve paid little attention to the growing demand for expanded services back home.  Now India’s digital agencies – which have remained keenly attuned to the Indian market -- will likely be trying to replicate what consultants have done overseas, throwing in a bit of traditional consulting as an add-on to their regular services, potentially impressing buyers with their one-stop-shop offering.

Ultimately, India’s consultants and digital agencies could find themselves in a race to determine who will become the preferred provider of those many services that lie between IT and strategy.  For India’s consultants, it is absolutely critical that they convince clients that they understand digital before digital agencies are able to convince clients that they understand consulting.  But it’s going to be tough given that these firms often have little capacity in the in-between space to draw upon.