Management consultancies and professional services have traditionally relied on providing expertise, strategy, and advisory services as their core offerings. However, in a rapidly changing market, relying solely on intangible services increasingly becomes a limitation. Many consulting firms face the risk of not meeting their growth aspirations if they fail to pivot and develop tangible products. As technology-driven industries evolve, consultancies must create scalable products that meet clients’ demands for practical, ready-to-implement solutions. This shift requires consultancies to rethink their business models, invest in product development, and adapt to market dynamics if they wish to remain competitive and sustainable.
The consulting market is experiencing growing competition from established players and new entrants with disruptive capabilities. Firms like McKinsey, Boston Consulting Group (BCG), and Deloitte have begun recognising this need and are already investing in AI-driven tools, proprietary software, and analytics platforms. These tangible products allow them to offer more practical value to clients beyond traditional advisory services, meeting clients’ desire for actionable tools they can integrate immediately. For example, McKinsey has launched products like Periscope, an analytics platform that helps clients improve pricing, marketing, and sales. Through Periscope, McKinsey has positioned itself as a consulting firm and a technology provider, expanding its revenue streams and enhancing its value proposition. Other consultancies that do not take similar steps risk being left behind by clients who increasingly expect more than just advice—they expect actionable, technology-driven solutions.
Moreover, product-based revenue models offer consultancies the benefit of scalability. Unlike traditional consulting projects, which require extensive human resources and time to execute, tangible products, such as software or digital platforms, can be sold, deployed, and scaled with minimal incremental costs. This scalability is crucial for consultancies aiming for growth, as it reduces their dependency on headcount-based revenue. With digital platforms, AI tools, and automated solutions, consultancies can reach a larger audience without proportionate increases in operational costs. For instance, Deloitte’s ConvergeHealth platform provides data and analytics solutions for healthcare, an example of how consultancies can drive growth by developing products tailored to specific industry needs.
A failure to pivot toward tangible products could also expose management consultancies to significant competitive risks. Tech companies and startups, such as Palantir and Salesforce, are increasingly encroaching on traditional consultancy spaces with data-driven products that deliver immediate insights. These tech-driven firms have an advantage: they combine domain expertise with software development capabilities, offering clients end-to-end actionable and scalable solutions. If business consultancies do not respond by building their proprietary products, they will be outperformed by technology companies capable of providing similar services with more immediate results or by recruitment agencies capable of placing integrated teams.
The move toward tangible products aligns consultancies with the broader digital transformation in virtually every industry. Clients today often seek strategy and digital transformation partners who can actively guide and support their journey with tools, software, and analytics. For example, BCG’s acquisition of several software firms and digital transformation platforms highlights the trend of consultancies moving toward product-based models to remain relevant. Without such steps, consultancies risk losing clients to firms that provide more integrated solutions, including advice and the tools to implement them.
Additionally, tangible products create opportunities for consultancies to diversify revenue streams, making them less vulnerable to economic cycles that impact demand for consulting services. During downturns, companies often cut discretionary spending on external consultants, but tangible products—especially software with recurring subscription models—can provide a steadier income stream. For instance, PwC has developed software solutions in risk and compliance, providing a product that offers ongoing value and subscription revenue, creating resilience against fluctuations in consulting demand.
In conclusion, while management consultancies have traditionally thrived on their advisory expertise, the need to pivot toward tangible products is increasingly critical. As technology reshapes industries and client demands evolve, firms must meet growth aspirations by developing scalable, product-based offerings that complement traditional services. Without this pivot, consultancies may struggle to compete, missing opportunities for innovation, scalability, and diversified revenue—ultimately impacting their ability to grow and adapt in a shifting market.
