The end of travel for many consultants?

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I was a little surprised at a networking event last night that two contacts from different Big 4 consultancies brought up their firm’s changing position on travel. Both said almost no clients will pay for travel anymore. One said that all the mid-tier markets are relocating their resources to bigger markets to be closer to their clients. The other said that junior people are sitting “on the beach” until a local gig is sold. The only exception one mentioned was the Healthcare industry.

Today I’ve been asking around to see if my sample set indicated a bigger trend. So far, it seems that the Big 4s really are significantly reducing travel at the demands of their clients. The big strategy firms are getting a little pressure, but it isn’t widespread. Niche consultancies aren’t feeling it as much. My small sample set would imply that the larger, traditional systems integrators are the most impacted.

I’m happy for the environment and the many children who will get to see more of their parents, but I’m left wondering what this means for the future of consulting. If this trend is widespread, there may be something more to it than the current economic situation. Yes, there was more pressure to minimize costs during other downturns, but that generally resulted in fewer consultants, not an overwhelming insistence on local resources.

Assuming companies are demanding local resources for costs, which my sources say they are, rather than other reasons like more on-site time, easier retention of consultants long term or some other reason like support of their local economy, then they are viewing consultants as a commodity. They are not buying industry or technology expertise from other markets, at least not from Big 4 type consulting firms. They do not view the firm as differentiated enough to pay higher prices for their consultants; they would just assume turn to their nearest competitor and get another cookie cutter consultant.

If my small sample set shows a trend and the trend continues, consultancies of the future should follow one of two strategies – either specialize their resources or settle in as a local commodity. Doing both (specialization and localization) would only be possible at a large size in every market. Differentiating through something other than specialization – like the smartest people, the best processes, or the most insightful and practical intellectual capital – is possible, but much more challenging to build and hard to sustain through growth.

I’m curious what others are seeing, especially since I have limited data points so far. Is traveling now the exception rather than the rule? Do we think this is another by-product of our economy or is this shift here to stay? How will consulting firms have to morph to meet the demand (or lack thereof)?

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