“Come gather ’round people Wherever you roam And admit that the waters Around you have grown And accept it that soon You’ll be drenched to the bone…”
– Bob Dylan, The Times They Are A-Changin
As Bob Dylan sang fifty years ago, The Times They Are A-Changin. They’re changing for everybody, including software and IT consultants, and outsourcers the world over.
Change is a constant you say?
Yes it is – and change can either run you over or offer unprecedented opportunity.
I’d like to think that change brings opportunity.
As the CEO or owner of a software consulting firm, you’re facing multiple challenges to your business:
- The Social, Mobile, Analytics and Cloud revolution
- The demand for front-end expertise
- Global sourcing of IT talent
- Pitch-averse clients
A little bit of a daunting list – but as a business owner I know you love a good challenge.
So let’s go over each one.
1. The Social, Mobile, Analytics and Cloud Revolution
IT Consultants who have traditionally focused on managed IT services and systems integration for big iron (SAP, Oracle, PeopleSoft) now have to manage the brave new world of the “Third Platform” as IDC calls it.
Bernard Golden from CIO.com says:
“IDC asserts that a full 29 percent of 2014 IT spending and 89 percent of all IT growth spending will be in the third platform…”
And a full 50% represents a cannibalization of traditional markets.
What does this mean for IT consultants? Time to learn some new skills, such as user interface design.
2. Rising Demand for User Interface Design
Directly related to the third platform of social, mobile, analytics and cloud is the emphasis on front-end work. Facebook, Twitter and Call-of-Duty have had a lot to do with the demand from end-users for enterprise applications that are actually easy to use.
In fact the big boys, like SAPs and PeopleSoft, are starting to create friendly user interfaces that look suspiciously like your favorite social media platform, because in order to drive adoption, you must simplify usability by adopting a consumer mindset.
The demand for front-end engineers has exploded as a result, yet according to this Ozy.com article:
“The supply of engineers that specialize in these skills has yet to catch up with the surging demand.”
3. Global Sourcing – Threat and Opportunity
But don’t worry, the shortage of front-end developers (and even back-end engineers) has led to a new type of outsourcing, one that’s not driven by a desire to cut costs but to make up for the local scarcity in talent.
And even while corporations outsource to fill talent gaps, IT consulting companies can do (and are doing) the same thing. Many domestic firms now look like outsourcing firms, and many outsourcing firms look like U.S. firms, as development and sales offices span the globe.
4. Pitch-Averse Clients
But with more sourcing options available to your clients, the less willing they are to listen to anybody’s pitch.
It seems that the majority of IT and software consulting firms, both in the U.S. and abroad, are still focused on selling 1.0: purchase a list, cold-call the hell out of it, and hope to get a client.
Even those that have a blog and white papers seem to focus their content on pitching instead of helping.
But your customers are immune to this. According to a joint study between Google and CEB, the average B2B buyer is already 57% through the sales process before ever picking up the phone to talk to a sales rep.
What are they doing? They’re searching Google for relevant articles, checking out yours’ and competitors’ blogs, downloading eBooks and White Papers, attending webinars, reading third party review sites, and talking to their friends on social media.
They’re NOT sitting at their desk waiting for your phone call.
The Future of IT Consulting Is Here – Time to Make Some Changes
What’s an IT or software consulting company to do? The social, mobile, analytics and cloud revolution is forcing the adoption of new skills such as user interface design. But the shortage of front-end developers is sending your customers abroad (which you can do too by opening up your own office in Guadalajara or Bangalore).
And finally, you need to adopt new sales and marketing models to appeal to the pitch-averse customer. As Jay Baer said in his book YouTility: smart marketing is about help, not hype.
In the next few blog posts I’ll delve deeper into how software consulting firms can use content marketing to open new markets and drive sales.