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4 future trends in the IT consulting market

7.1.2020 - Veera Kujansuu - IT-Consultancy business

"In nearly every meeting we have seen these same game changing trends", says Anders Hagberg from Cinode

4 future trends in the IT consulting market

The world is changing fast. What kind of challenges lie ahead for consulting businesses that strive to keep up?

Ite wiki interviewed Anders Hagberg, the CEO of Cinode. Cinode is founded in Sweden and offers smart SaaS-based tools for consulting businesses to reach their full potential in the sales and delivery of skills.

In their meetings with consulting businesses Cinode has gained valuable information about the IT consulting market in the Nordics.

– In the past two years we have gathered data and met with 2000 potential clients in Finland and Sweden. In nearly every meeting we have seen these same game changing trends that are rising. The same trends can be seen in different european reports and research, Hagberg says.

He opens up the central future trends that successful IT consulting businesses should be prepared for.

Employee turnover and difficulty in recruiting

Employee turnover in IT consulting businesses is very high and recruiting new skilled consultants is challenging.

“From small to big companies, employee turnover can be as high as 15-20 % within a year.”

– From small to big companies, employee turnover can be as high as 15-20 % within a year. A typical example is a business of 100 consultants, where up to 20 people can leave in a year. If the aim of the company is to grow, they will not only have to replace the lost employees, but also find new ones. This means interviewing up to 5 or 10 times more people. The recruiting costs are massive, Hagberg explains.

In some companies turnover can be as high as 30 percent. According to Hagberg, the problem is especially visible in large Nordic cities, particularly in Sweden and Finland.

Companies have to spend a lot of time and effort to attract new employees.

– The whole recruiting process has reversed: skilled IT consultants are so difficult to find, that companies are willing to do anything to get job seekers interested. It’s part of the recruiting party to do the work.

Companies have to specialise in order to win new deals

Clients expect more specialized expertise from consultant companies.

– Often we see 20-50 employee companies, that tell us that in order to win their deals with customers, they need to add new expertise in their organisation, says Hagberg.

To keep up with the expanding need for specialised expertise and to deliver to customers, companies need to start building small communities of professionals, also from outside of their organisation. Cinode has seen this development around many fields of digitalization like AI and software robotics, where many new players have grown to the it-consulting market.

An ecosystem of freelancers, subcontractors and partner companies help to deliver to customers with expanding demands. That brings us to the third trend: increasing collaboration between companies.

Framework agreements require collaboration

Framework agreements created by large clients require collaboration and flexibility from IT consultant businesses and software companies.

Framework agreements created by large clients require collaboration and flexibility from IT consultant businesses and software companies.

– For instance banks or insurance companies can have 25 partner companies who can deliver services under their framework agreement. You need to be part of the collaboration platform to get chosen, Hagberg explains.

In order to be able to deliver to big clients and secure their delivery, companies need to increase the amount of collaboration with each other.

Growth of the freelancer market and new ways of employment

An increasing amount of software industry professionals are choosing a career as freelancers.

– In the last ten years we have witnessed the amount of freelancers and gig workers doubling. These are typically one-person companies with enough turnover to provide a living, says Hagberg.

The growth of the freelancer market is just a part of a bigger change in the ways of employment. Even big corporations are looking outside the traditional ways of employment.

– Big companies are looking more and more into outsourcing skills that are not core within their organisation. The hiring of consultants is increasing and work is turning more project-based.

“Big companies are looking more and more into outsourcing skills that are not core within their organisation.”

According to Hagberg, outsourcing was first a big trend in marketing and has steadily spread to other skills. Outsourcing is needed, because large companies are not agile enough to react to new trends in the technology market.

Smart SaaS tools for handling new challenges

How to successfully respond to all future trends that consulting businesses face? Anders Hagberg has an answer: Cinode’s SaaS-based tools.

– What Cinode really is about is helping consulting businesses and software companies to grow and flourish. We offer tools to make them “future-proof”, Hagberg says.

Many times consulting companies run their core processes with a variety of different tools: project management, CV database, CRM system, recruitment module, assignment planning  and so on. Cinode combines all of these into one smart and scalable platform that is designed with consulting businesses’ needs in mind.

– The most important ways to meet the daily challenges are speed, transparency and the possibility of building an ecosystem of professionals. Cinode can help consulting businesses with all of these.

Cinode offers smart tools for consultancy businesses

Hagberg promises that with the aid of Cinode’s tools, consulting businesses will be able to grow and gain advantage.

– The time from identifying a business opportunity to closing the deal goes from days to minutes – many Cinode customers claim that this generates a topline growth of more than 10%! Cinode helps to visualize consultants’ expertise in an attractive and selling manner which also makes it easier and faster to match the consultants with suitable work opportunities, he explains.

“The time from identifying a business opportunity to closing the deal goes from days to minutes – many Cinode customers claim that this generates a topline growth of more than 10%! “

What about reducing employee turnover? According to Hagberg, motivating employees is the core factor. This is why Cinode’s tools are designed to help with employee engagement and business growth.

– The system drives engagement, because the employees will be able to work with projects suitable for their skills and at the same time further develop their abilities. The system allows everyone to present their skills transparently, so the consultants are also able to drive sales by recommending suitable colleagues for projects.

A broad ecosystem of collaborators and subcontractors helps to succeed in the IT consulting market. Cinode’s tools allow to get rid of the old fashioned email-based management of freelancers and subcontractors and instead build a seamless ecosystem of partners.

– Our goal is to connect a world of dedicated professionals, where their skills and competence development fit right in with real business opportunities and actual customer needs.

 

Read also How to manage and sell IT-consultants efficiently? 

Cinode’s website 

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Veera Kujansuu

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