The boom of “inter-computer” communication in new millennium is triggering a golden age for IT consultants. Let us together trace the evolution of IT management consulting.

The research deals with PCs in the 80’s and the Internet in the 90’s as triggers of skyrocket growth of the IT consulting industry.

The ground for such steep growth of autonomous computing is “computer-to-computer” communication. By the end of this the e-communications will be computer-to-computer. Inter-computer communication greatly speeds up the business development. For instance, full automation of supply chains: point-of-sale computers directly communicate with warehouse computers, which in their turn communicate with vendor computers, while vendors’ computers, again, directly communicate with their supplier computers. Moreover, by means of inter-computer communication one can track demand and automatically direct products to points of demand.

There are several drivers of IT consulting industry growth. Innovation in frameworks and methodologies along with seasoned and highly trained professionals enabled the appearance of unique services from the consulting companies. For example, many companies introduce innovative and unique frameworks which assist company management to refine action plans for diverse business activities.

Still innovative approach and sophistication were another driver. Some consulting companies began to provide expertise in designing and developing elaborated computer applications. While others offer unique packaged software and specialized consulting services.

Another one driver is reaching the critical mass of specific expertise is too costly to maintain in a particular company. For instance, e-security requires a significant level of expertise, which not all companies can afford in-house. By rendering such types of services to multiple companies, both expertise can be maintained in practice group and the group will stay on the cutting edge of technology and trends.

The greatest benefit conditioned by the last driver is that a distinct consulting company can maintain and manage the group of talented and employees. A product company differs much from an IT consulting firm in management and incentive systems. At all, a product company may not attract various knowledge workers who would rather engage in consulting services.

Finally, the IT consulting industry experienced 1) introduction of ERP and CRM systems; 2) solved Y2K problem; and 3) discovery of new areas for activity – e-business.

In our research document, we claim that more than 50 percent of today’s budgeting expenses encompass computing in various forms. As a result of all-round penetration of IT, almost all consulting companies had to integrate IT expertise. Consulting services are still in restructuring mode due to it’s steep growth in 1990’s.

In the context of above facts lots of companies continued to broaden their scope of consulting service. Many of them invested in establishing of education and training facilities, dedicated to maintaining of professionalism of their employees, as well as equipping them with new skills to lead the edge.

Some went further and there are IT product firms which practice certification and training for their own consultants, independent consultants, etc. Microsoft, Sun, and Novell are bright examples of this type of companies.

Our predictions as for the future of IT consulting services base on our belief that the late restructuring in IT consulting industry is a point of industry transition. The transition is still underway but we can see as some of new drivers take shape.

Until recently, IBM de facto set the industry standard for , and a de facto standard in the use of COBOL for development of applications. By the end of 1990’s, development of new applications was almost supplanted by packaged solutions. Moreover, development of networks and Internet moved the IT infrastructure towards open standards environment.

Proportionally, the infrastructure of IT itself became simpler and more advanced. The purpose of IT management consulting is to provide both strategic perspective along with opportunity to manage the risks of inability to realize the strategic competitive advantages of the company due to failures to effectively manage the challenges of implementation.

Further, in the context of the management challenges to level strategic opportunities with capabilities of implementation, there exist dampening forces on growth of industry. For instance, the steep growth of ERP installations and BPRE projects is now at dawn. While outsourcing is still in general use, organizations gained their own experience and armed with this knowledge cam do much more now. Company management became more proficient in IT, knows more about the business and organizational potential of IT and how to design their own robust architecture.

The demand will keep growing. Electronic security is rapidly becoming a general issue. The Internet will grow fundamentally in Asia and Europe. Absolutely new applications in new business domains create new consulting spheres.

IT consulting, as any other product or service, can create its own demand. In the future the IT consulting industry will require a high level of industry adaptation. Introducing the innovations and pointing out the competitive benefits of those innovations to the market, IT consulting creates and its opportunities for growth. The key to IT consulting steady growth and development is its ability to lead and to adapt within new conditions.

Managers can learn a number of important lessons from our research:

Many operational and business managers became more informed about IT and at the same time many IT professionals became apprised about the strategic and business advantages of IT. Companies practicing this integrated and more sophisticated capability within their structure will have an advantage over those who depend on outsiders to get the integrated view.

Changes in IT domain can be compared to the rate of changes in other technologies, markets, and rivals’ initiatives. It is noted and soon to be a common truth that a successful IT consulting company must be able to forecast, sense, and promptly respond to changes. This is equally applicable for operations. Operations managers often face the challenge of implementing new IT capabilities and at the same time guarantee that they are ready for the next version or generation.

The complexity of emerging IT environment often requires specialized expertise, available only in IT consulting firms, to build IT infrastructure and integrated applications. Successful managers will ensure that their companies can operate effectively themselves while integrating the benefits from networks of service providers with a bundle of special capabilities.

Ultimately, from our point of view it is too risky to fully delegate the IT initiatives to IT consulting companies. Many of your own IT professionals and users should take active part in IT initiatives.