Summary of "Why Big Consulting Firms Are Losing Their Edge in 2025?"

Summary of Key Points from "Why Big Consulting Firms Are Losing Their Edge in 2025?"

Main Financial Strategies, Market Analyses, and Business Trends:

Dominance and Decline of Big Consulting Firms: Large global consulting firms (e.g., PwC, Accenture, KPMG, Capgemini) have historically dominated ERP and digital transformation projects but are now facing challenges that question the sustainability of their traditional business model.
Bias and Conflicts of Interest: Big consulting firms often exhibit strong biases toward recommending specific software solutions (e.g., SAP), driven by internal incentives, commissions, or large practice areas tied to those products. This leads to conflicts of interest where recommendations may not align with the client’s best interests.
Incentive to Maximize Billable Hours: These firms push to staff projects with as many consultants as possible to increase revenue, often leading to inefficiencies such as billing for junior consultants who add limited value. This practice inflates project costs unnecessarily and is not always transparent to clients.
Mismatch of Staffing to Client Size: Large consulting firms tend to apply the same staffing approach to mid-sized companies as they do to Fortune 500 clients, resulting in overstaffing and poor cost optimization for smaller clients.
Training Grounds for Junior Consultants: Big firms use client projects as training environments for new consultants, which can reduce project efficiency and value. With advances in AI and automation, the need for junior consultants doing basic tasks is diminishing.
High Costs and Lack of Transparency: The overall costs charged by big firms are high, not only due to hourly rates but also due to aggressive staffing and internal politics. Clients often lack visibility into how resources are deployed and the real value delivered by each consultant.
Arrogance and Poor Client Communication: A perceived superiority complex in big consulting firms can lead to poor transparency, with clients often shielded from project risks, inefficiencies, or mistakes until problems become severe.
Emergence of Independent, Tech-Agnostic Firms: Independent consulting firms like Third Stage Consulting, led by Eric Kimberling, position themselves as unbiased advisors who prioritize client success and transparency, offering quality assurance and oversight over large system integrators.

Methodology / Step-by-Step Guide for Clients Managing Consulting Firms:

Take Ownership of the Project: Clients should actively manage consultants like any other vendor or employee rather than deferring entirely to the consulting firm.
Demand Transparency: Ensure clear visibility into project plans, resource allocation, budgets, and staffing forecasts.
Validate Staffing Levels: Challenge the number and seniority of consultants assigned to projects, ensuring alignment with the client’s size and needs.
Be Wary of Biases: Question recommendations that seem pre-determined or overly aligned with specific software vendors.
Consider Independent Oversight: Engage independent, technology-agnostic firms to provide quality assurance and unbiased project management.

Presenter / Source:

Eric Kimberling, CEO of Third Stage Consulting, former PricewaterhouseCoopers consultant with 25 years of experience in ERP and digital transformation.

This summary captures the critique of big consulting firms’ traditional business model, highlighting their biases, conflicts of interest, inefficiencies, and the rising value of independent consulting alternatives in the evolving digital transformation landscape.