Understanding the Ecosystem in Which Thought Leadership Creates Demand for IT

The growth of the consulting industry is flat. Many IT service and technology companies are reporting slackening sales. Even the white-hot expansion of the Indian outsourcing firms has softened.

Yet businesses need productivity improvements more than ever. The need for breakthrough ideas about how to make business more efficient is even greater today. But if the demand for consulting and technology industries is slack, doesn’t that suggest, as a whole, that the consulting and technology industries are having a hard time convincing customers they have what industry needs to become more productive?

I say this because during the early days of business reengineering (early 1990s), we saw the same dynamic going on: the U.S. was in a deep recession, the consulting and IT industries were in the tank – except for reengineering (and the demand for information systems that reengineering generated). Reengineering spread like wildfire, and the consulting firm (Index Group) I worked for grew rapidly.

So why was reengineering hot when many other consulting services were not? And why was there strong demand for the technologies that were often critical to reengineering (e.g., SAP's enterprise resource planning software) when demand for many other technologies was tepid?

It's because the "IT ecosystem" in which reengineering operated was firing on all cylinders. What do I mean by IT ecosystem? There are four elements:

• The business gurus who create management concepts that implore managers to make business process changes that require new technology (e.g., the late Michael Hammer, Tom Davenport, etc.) ;
• The consulting firms that create services that execute the concepts in corporations (i.e., help design the business process changes);
• The IT services firms which install the computer technology that the new business processes require; and
• The technology vendors that make that software and hardware, and which magically see demand for their offerings accelerating.

My firm is launching a study on this next week to shed light on this phenomenon (“How Big Management Ideas Move Technology Markets”). Bloom Group affiliate Rob Leavitt (ex-ITSMA), who is working on the study, and I see the research helping consulting, IT services and IT firms work better together to create the next blockbuster concept.

We’ll be looking for sponsors among the consulting, IT services and technology world starting next week. We’re aiming to begin the research in November.

What aspect of this issue would interest you? What would you like to know about such an IT ecosystem? Let me know.

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