UK consulting firms anticipate significant growth opportunities in the upcoming year by prioritizing investments in IT infrastructure and digital transformation. Despite this optimism, a notable majority, around 80% of these consultancies, express concerns about insufficient investment in enhancing the skills of their workforce to fully capitalize on technological advancements.
Current research underscores the unprecedented potential that technological advancements, particularly in AI, hold for businesses. The prospect of a $44 trillion productivity boost in the global economy has triggered a rush among companies to invest in this transformative technology.
However, a crucial lesson learned over the past decade is that simply investing in technology is insufficient for successful transformation. Studies reveal that approximately two-thirds of digital change programs fall short of their intended goals, often due to neglecting investments in the skills development of employees who will be utilizing the technology.
According to a recent survey among decision-makers in the consulting sector, there is a strong commitment within the industry to apply past lessons and harness cutting-edge technology for improved outcomes in the coming year. Deltek’s study involved leaders from 64 UK and Ireland consulting firms, each having 25 or more employees. The survey explored perspectives on opportunities, challenges, technology trends, and business development.
Despite the challenging market conditions, consulting firms throughout the British Isles are making substantial bets on emerging technologies. Among the identified opportunities, 20% of respondents highlighted the significance of ‘investing more in IT infrastructure.’ Another 20% emphasized the potential for growth by entering new markets or segments, a goal facilitated by the adoption of new IT systems. Technology innovation ranked third, with 14% identifying it as a major opportunity.
Given this focus, it’s not surprising that 74% of consulting firms expressed their intent to increase investment in emerging technologies in the coming year. Furthermore, 31% of these UK consultancies firms indicated a significant uptick in this investment compared to the previous year. In the midst of a slowing consulting market, these proactive measures reflect a strategic approach by firms aiming to safeguard and enhance their profitability.
On the survey findings, emphasizing the crucial role of digital transformation in addressing the increasing complexity of projects. The research revealed that projects become more challenging in periods of high inflation and amid uncertain geopolitical and economic pressures, with two out of five trading businesses experiencing a rise in the prices of goods or services, prompting a need for more budget efficiency. Consultancies recognize the potential of emerging technologies in addressing various resource management challenges, making it a pivotal time for organizations to implement change programs.
However, consultants acknowledge that merely investing in technology does not guarantee success. Among the challenges identified, inadequate training and support for employees emerged as the top concern, with 83% of consultants highlighting this issue. This surpassed concerns about insufficient resources and budget, cited by 67%, and inadequate planning and preparation, also noted by 67%.
In response to these challenges, consulting firms are not only focusing on training existing staff but also actively seeking to expand their workforces. Unlike some of the larger consulting firms in the UK that have been reducing staff due to decreased workloads, 19% of consultancies plan to significantly increase the size of their workforce.