MORE AND MORE industries are facing disruption as digital technologies continue to evolve. Traditional business models are crumbling, and transformation is prevalent in the global economy.
Even in the business of providing professional consulting services here in the Philippines, it is “disrupt or be disrupted.” As Patrick David R. de Leon, chief operating officer of AGS, an ePLDT company specializing in business management solutions, told BusinessWorld, “There are two worlds: the world as it is now, and the world as it was before.”
“The ball game is changing. And we have to be one step ahead of our customers if we’re able to help.”
Mr. de Leon asserted that business consultants now need to adapt quickly to trending technology, building on their existing repertoire of skills and those that have to do with technologies like cybersecurity, artificial intelligence, cloud computing and blockchain. Given the potential of these innovations to plug the gap between bigger and smaller enterprises in any industry, business consultants need the expertise to help companies that are in various stages of digital transformation and to guide them through the process.
Changing technology, particularly in information and communications, is challenging previously unassailable institutions, transforming the landscape as it does so. Mildred R. Ramos, managing partner for advisory services at Reyes Tacandong & Co., said in an e-mail interview: “The industry and their clients have to seriously examine their assumptions about their relative competitive positioning.”
“To give a specific example, information and communications technology used to be a formidable barrier to entry. But nowadays, regions and countries that had deficient infrastructure are leapfrogging because they have no legacy investment to worry about in the first place and are acquiring modern products and processes that are far cheaper and more productive.”
Mr. de Leon and Ms. Ramos both noted that the way forward for consulting companies is through acquiring new expertise, particularly in the field of information and technology. But, as in any industry, skilled workers are in short supply.
“The early trailblazers will pretty much have to learn this through trial and error. And once there’s critical mass, that’s when the formal studies begin to happen,” Mr. de Leon said, noting the difficulty of adapting to rapidly changing technologies.
He said that another complication consulting companies will have to face is the ongoing competition with foreign countries like Australia, New Zealand and Singapore regarding attracting skilled workers. The Philippines, he pointed out, continues to lose the information technology experts it needs to higher-paying jobs being offered abroad. Significant efforts need to be undertaken in equipping the younger generation with better, higher-value skills to ensure that they can contribute to whichever industries they enter when they become part of the work force.
This is not to mention the existing challenges prevalent in the industry before disruption. Butch Gregorio, the senior managing director of FTI Consulting Philippines, said in an e-mail interview: “The financial advisory landscape is quite competitive, with practitioners ranging from individual local professionals to large foreign consultants. Some companies also set up their own corporate finance divisions to lessen reliance on external consultants.”
Despite the competition, he further noted that there are still a lot of consulting opportunities on the horizon. He sees opportunities in infrastructure, renewable energy, logistics, tourism, trade and agriculture. At the same time, with rising interest rates and inflation, companies may need assistance in restructuring their operations and finances to ensure continued business viability.
Mr. Gregorio said: “International developments like the ASEAN economic integration and China’s continued growing influence will be a major force in shaping economies and businesses in the region.”
“Assuming the economy continues in its growth trajectory and promised infrastructure improvements will happen, then we expect more inbound capital flows to happen over the next five years. This will also mean that the country will be an attractive market for consulting services,” he added.
The influx of international players will also serve to develop the expertise of business consultants in the country, and even prepare them for further disruption in the future.
“A major challenge is how to assist companies, especially the dominant ones, understand that disruption is clear and present, is in our midst. The flip side is identifying who the disruptors are (and there will be more), working with them, and creating value for them as they grow,” Ms. Ramos said.
“The line between giving advice and actual implementation will continue to blur. When disruption hits an industry, companies will face a confusing set of hard choices that need to be made. These companies will seek not only good advice but a reassuring hand to hold theirs during a traumatic transition process.”
Ms. Ramos further added that disruption does not respect or understand the concept of physical or regulatory borders, forcing companies to seek out consulting firms that are comfortable giving counsel on a complete spectrum of general and technology management challenges.
“Business consulting thrives during times when businesses enjoy abundant market opportunities or when market uncertainties are significant such that in-house corporate capabilities or resources are inadequate,” Mr. Gregorio said.
“Companies hire consultants in the hope that with their specialist knowledge and skills, they will be able to augment the need of these companies to succeed and to stay relevant in their respective industries. The Philippines, in our opinion, is at a critical juncture at the moment where significant opportunities are available for those with capital, but at the same time this bullish sentiment is being tempered by global, regional and domestic headwinds.”
He continued: “At the end of the day, what sells is integrity, understanding of the company’s needs, and the client’s comfort in their advisor’s ability to help them achieve their goals.”