What is IT Consulting?

What is IT Consulting?

IT consulting, also referred to as technology consulting, relates to services aimed at helping clients on how they can utilise information technology (IT) and digital to optimally achieve their business goals. The IT consulting segment spans both advisory and implementation services, but excludes transactional IT activities.

Technology consulting market
The market for technology and IT consulting services is estimated to be worth $48 billion, representing roughly 20% of the total global consulting market. Since 2011, the technology consulting has globally seen year-on-year growth, with the Compounded Annual Growth Rate (CAGR) floating around 2.5%. In the coming years, the IT consulting market is forecasted to face significantly higher demand, accelerating growth, on the back of large technological mega trends, including digitisation, analytics, cloud, robotics, and the Internet of Things (IoT).

Global IT Consulting Market

Note that the definitions used for IT consulting play a central role in the size assigned to the market. Consensus has been reached by experts on the fact that non-repeatable services form the basis of technology consulting’s scope. For instance, repeatable offerings such as maintaining the IT infrastructure (managed services) or managing outsourced services (outsourced services) fall outside the definition of technology consulting. There remains, however, a grey area. ALM Intelligence – the source followed by Consultancy.org (see the section ‘Market Segments’ for details) – defines IT consulting in a relatively narrow manner, and as a result the segment is valued at less than a quarter of the overall industry. If IT implementation, systems integration and software management would be included in the definition, the size of the IT consulting market would be three-fold*. Other analysts typically apply a broader definition, and therefore they value IT consulting at between 40% to 50% of the market.

IT consulting services
The (broader) market for IT consulting services consists of eight main disciplines: IT Strategy, IT Architecture, IT Implementation, ERP services, Systems Integration, Data Analytics, IT Security and Software Management.

IT strategy focuses on strategic IT propositions and IT advisory, offerings which commonly represent the first phase of any IT undertaking. Engagements typically last between six weeks to six months depending on the complexity, with an average of two to three months. Examples of projects include defining a corporate IT strategy, setting up a business case for an ERP system or designing a cybersecurity vision – engagements that set the stage for further IT work. IT architecture looks at the IT processes and systems, and defines the technological blueprint that enables business processes. Projects typically last between six to 12 months and architecture services precede any IT implementation or systems integration efforts. Consulting offerings include, among others, defining an enterprise landscape, implementing a service-oriented architecture (SOA), or guiding the outsourcing of architecture processes to an external vendor.

Enterprise Resource Planning (ERP) services are activities that support clients with designing, implementing and/or maintaining ERP systems and modules. Key propositions include ERP package selections, business process redesigns based on an ERP template, and implementations of, for instance, SAP or Oracle products. The systems integration domain looks at how different computing systems and software applications can link together in order to ensure systems acts as a coordinated whole. It often involves ensuring ERP systems/modules can interact with other, more tailored applications that run in the IT landscape. IT security focuses on risk, security and compliance responsibilities in the IT landscape, while the IT implementation line of business encompasses all services related to the design and implementation of technology-driven projects.

IT Consulting - Services

Software management refers to the practice that involves managing and optimising the purchase, deployment, maintenance, utilisation, and disposal of software applications within an organisation. Lastly, data analytics, an upcoming domain, centres around techniques and tools that can turn large amounts of data into valuable information in order to support decision making. Typical propositions in this segment are business intelligence, workforce analytics, customer intelligence, data warehousing (big data) and predictive modeling.

What does an IT consultant do?
Technology consultants are hired by clients to support them with using information technology to meet business objectives or overcome problems. The type of work can range from strategic (such as developing a new IT strategy or IT cybersecurity approach) to tactical (such as the implementation of an ERP system or the selection of an IT system) to highly operational (such as the development of a mobile application).

Technology consulting firms
As IT is increasingly becoming a more important enabler of business and digital goals, consulting firms have over the past decade both broadened and deepened their technological capabilities. Analysts typically distinguish between three types of IT consulting firms: the large global players that specialise in information technology, generalist firms that have a separate IT consulting unit and niche IT players – players that either focus on a specific discipline or market.