Finding a business model configuration within IT consultancy firms that meets the strategic objectives : a case study within KPMG IT strategy

Dekker, C.G.S. (2011) Finding a business model configuration within IT consultancy firms that meets the strategic objectives : a case study within KPMG IT strategy.

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Abstract:[Motivation] This research is inspired by two reasons; the first is the demand for new and innovative business models and the need for consultancy firms to address this, the second is that the commoditization of IT is demanding a different role of IT consultants and therefore their struggle for finding the right business model configuration. [Focus] This research focuses on the business models in IT consulting firms, especially how their business models can be assessed and compared to the different approaches towards consulting. Consequently, firms can find a business model configuration that can meet their strategic objectives. The central research question of this thesis is: “Which business model configuration meets the strategic objectives of IT consultancy firms based on the two ideal type approaches towards consulting?” [Research Methods] This thesis meets this research aim through an extensive study of relevant literature of business models, consultancy firms and approaches towards consulting, combined with practical research. The different approaches towards consulting are translated into business models elements. So they can be compared to each other and the consultancy firms can assess their own model and find out whether the model fits to their objectives. The practical research was carried out through an embedded case study within KPMG IT Strategy, using workshops, semi-structured interviews, surveys and data analyses. [Findings] This research produced a number of key findings. The first finding is that, the statement that “there is the need for a new continuum of consultancy approaches in order to advance business model innovation in this industry” is accepted. Current literature as well as the current business model of the focus firm indicates that only expert approaches are applied. Besides that, the literature as well as consulting experts shows the need for a complete new approach towards consulting that can deal with the new (upcoming) client demands. The second finding is that the literature review as well as the practical investigation showed that finding the right business model configuration is certainly not about eliminating one or the other approach towards consulting. Both approaches can be applied, as long as they fit to the firm’s strategy. The third finding is that in order to deal with a complex environment, uncertainty, and innovation, the ‘right’ business model configuration of an IT consultancy firm would be to combine both practices – expert as well as co-constructive – in one business model. At least, this is the case for the larger consultancy firms who have to deal with large projects in organizations were IT is commoditized. In this kind of projects, consultancy firms need to have offerings that require standard and non-standard services for one project, whereby the two approaches have to be combined in one business model. In the current business models, these firms mainly have expert elements, the same as with the case study in this research. In the IT consultancy industry ‘experts’ are always needed, in order to deal and communicate with the IT employees at the client side, as well as for the implementation of new IT systems. The co-constructive elements, and mainly viewing an organization as emerging and a subject to change can help bringing unique offers to the clients, but also the knowledge co-creation process throughout projects. [Conclusions] The main is that the framework for analysis as proposed is useful for analyzing the business model projects in IT consultancy firms. The literature review, in combination with the desired business model of KPMG, leads to the conclusion that large IT consultancy firms should combine both consulting practices in their business model. If both practices are present, combining them in one project is key. As both approaches are opposites, this can cause conflicting situations. To overcome this conflict, the business models should be combined into an ambidextrous organization form. The situational factors of a specific case can demand both types of approaches in one project. The business model has to be prepared for that. For consultancy firms with other strategies there is made a step plan that can be followed to find a business model configuration that matches with their strategic objectives. [Recommendations] For KPMG IT Strategy, to obtain their strategic goals, the business model that is currently used has to be changed. As it is their strategy to obtain the major ‘transformation projects’ in the client firms they certainly have to add some co-constructive elements to their business model. Currently the management team sticks to their expertise and their persuasion that these ‘focus clients’ only choose them for their expertise and experience, whereas the other employees in the teams have many ideas on how to advance to business model and to move forwards. The recommendation is to start an open and generative dialogue between the ‘less experienced’ employees and the management team and make room for the new ideas.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/61500
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