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Con s u l t i n gont h eCu s pofDi s r u pt i on–Chr i s t e ns e n - 200 7–Mc Ki n s e yi ni t i a t e dbu s i n e s smo de li nn o v a t i onst or e s h a p ewa yg l o ba lc on s u l t i n gfir me n g a g e swc l i e nt s o Mc Ki ns e ySo l u t i o ns s of t wa r e&t e c h nol o gy ba s e da n a l yt i c s&t oo l st ha tc a np r o v i d eon g oi n ge n g a g e me ntou t s i de t r a di t i ona lmode l  La un c hwa sdr a ma t i cb ci ti sn o tgr o und e di nd e p l o y i n ghu ma nc a pi t a l  MSmi g hte n a b l es hor t e rpr oj e c t st ha tp r o v i d ec l e a r e rROI&pr ot e c tr e v e n ue& mk ts ha r edu r i n ge c on omi c do wnt u r n s o Mc Ki ns e yi ss e e np ur s u i n gi n no v a t i o nwun us ua ls pe e d& v i g o r - Pa t t e r nofI n du s t r yDi s r u pt i on o Ne wc o mp e t i t o r swne wb us i n e s smo de l sa r r i v e o I n c umbe nt sc h oo s et oi gn or en e wp l a y e r sorfle et ohi gh e r ma r g i na c t i v i t i e s o Di s r u pt orwho s epr o d uc twa so nc eba r e l yg o ode no u g ha c hi e v e sal e v e lo fq ua l i t ya c c e p t a bl et ot h ebr oa dmi dd l eof t h emk t , un de r mi ni n gpo s i t i ono fl on gt i mel e a d e r s&of t e nc a us i n gt h e“ fli p ”t oane wba s i sofc o mp e t i t i o n - Ea r l ys i gn sofpa t t e r n o I n c r e a s i n g l ys op hi s t i c a t e dc ompe t i t o r swno nt r a d i t i on a lbu s i n e s smo de l st ha ta r eg a i ni n ga c c e p t a nc e o I n c umbe nt ss h o wv ul ne r a b i l i t y  Ex . Tr a d i t i o na ls t r a t e g y c o n s u l t i n gfir ms ,t h es ha r eofwo r kt h a ti sc l a s s i cs t r a t e g yt h tha sb e e ns t e a di l y de c r e a s i n g& i sn o wa bo ut20%,d o wnf r o m 60% t o70% s ome3 0yr sa g o WhyCo ns ul t i ngWasI mmunef orSoLo ng - Co ns ul t i n gmo de lh a snotc h a n g e df or>10 0yr s o Al wa y si n v o l v e ds e nd i n gs ma r tou t s i de r si nt oor g a n i z a t i o nsf o rfini t epe r i od& a s ki n gt he mt or e c o mme n ds o l ut i ons o Somec o ns ul t a n t ss c o ffa tdi s r upt i onbc“ c l i e nt swi l la l wa y sf a c ene wc h a l l e n g e s ” - Co ns ul t i n gfir m wa s2f a c t or st h a ta l l o we dd i s r u p t i o nt ot a kel o n g e r o Opac i t y  Hi ghl yo pa q u ei ndu s t r yc o mp a r e dwma n uf a c t ur i n g -ba s e dc ompa ni e s  I n c r e d i b l yd i ffic u l tf orfir mst oj u d g ec o ns ul t a n c y ’ sp e r f or ma n c ei na dv a n c ebct h e yu s u a l l yh i r efir mf o r s p e c i a l i z e dkno wl e d g et he ydo n ’ th a v e o Ag i l i t y - Cl i e n t sr e l yo nbr a nd, r e pu t a t i on ,a nd“ s o c i a lpr o of ”a kap e d i g r e e s , e l oq ue nc e ,& d e me a n e ra ss u bs t i t u t e sf o rme a s u r a bl e r e s u l t s - Pr i c eof t e ns e e na sap r o x yf o rqu a l i t y - Ne wc o mp e t i t o r sus ua l l ye nt e r e dmk tb ye mu l a t i n gi nc umb e n t ’ sbus i ne s smod e l sr a t h e rt ha ndi s t u r b - Ag i l i t yo ffir mst omo v ef r om b i gi d e at ob i gi d e aa l l o we dt he mt or e s p on dfle xi b l yt ot hr e a t sofd i s r upt i o n - Pr i ma r ya s s e t sa r ehu ma nc a pi t a l& fix e di n v e s t me nt sa r emi ni ma l - Ho we v e r ,opa c i t y& a g i l i t ya r er a pi dl ye r o di n gi nc u r r e nte n vi r on me n t Le s s o nsf r om t heLe g alFi e l d - Fi r s t bl o wt ol a w’ sopa c i t ywa sBe nHe i ne ma ne s s e n t i a l l yi n v e n t e dt hemod e r nc or p o r a t el a wf un c t i on& r e d uc e d c or p or a t i on s ’r e l i a n c eonl a wfir ms o Tod a yg e n e r a lc o un s e lb udg e t sa c c o un tf or1 / 3o f$ 500b i l l i o nl e g a lmkt i nUS o Bya dd i n gi n c r e a s i n g l ygr a n ul a rda t a , s u c ha sl e v e r a g e& p r o fit sppa r t ne r ,t heAm La wr a n ki n gs h oneal i g h ton pr e v i ous l ys e c r e t i v eo pe r a t i on sofwhi t e s ho efir ms - Co r p or a t eg e ne r a lc o uns e l–t a ki n ga d v a n t a g eo fne wc omp e t i t o r swh i c hr e duc ec os t s& i nc r e a s ee ffic i e n c yt h r o u g h t e c h no l ogy ,s t r e a ml i n e dwo r kflo w,a nda l t e r n a t i v es t a ffin gmod e l s - Pr e vi ou s l yl e g a lmkth a shi s t o r i c a l l yl a c k e dt r a ns p a r e n c y–ma ki n gi td i ffic u l tt od e v i a t ef r o mu s i n gbr a ndn a me dfir ms - Eme r gi n gl a wfir msa r ei n no v a t i n gq ui c kl yt ot a k ebu s i ne s sa wa yf r om wh i t e s h oefir ms - 52% a gr e e( 28% di s a gr e e ) o Ge n e r a lc ou ns e l“ wi l lma k eg r e a t e rus eoft e mp or a r yc ont r a c ta t t or n e y s o 79% a gr e et ha t“ un bun dl i n go fl e g a ls e r vi c e s …. wi l lr i s e ” - Ex pe c t e dt os e emo r epr i c ec o mp e t i t i o n o 200 9 4 2% o 201 2 9 2% - Fe we re qui t yp a r t ne r sa n dmo r enon hou r l yb i l l i n gwe r ep e r ma ne ntt r e nd s o 200 9 3 0% o 201 2 6 8% & 8 0 %r e s p e c t i v e l y - I nr e s p on s e ,whi t es hoefir msb e g unt oi nc ub a t en e wmode l s Whe nKno wl e dgei sDe moc r a t i z e d - Tur n o v e ra ta l ll e v e l si np r e s t i g i ousc o ns ul t i n gfir msa v e r a g e s18 % -2 0% py e a r o Mc Ki ns e y 2 7, 00 0a l umn it oda y

o Bi g3c omb i ne d 50 , 0 00 Ma n yc o mpa ni e sh a v ehi r e ds ma l la r mi e so ff o r me rc o n s ul t a n t sf ori n t e r na ls t r a t e g ygr o up s& ma n a g e me ntf u nc t i o ns o Co nt r i b ut e st oc o mpa n i e s ’i nc r e a s i n gs oph i s t i c a t i ona bou tc on s u l t i n gs e r v i c e s - Co mp a n i e sa r ewa t c h i n gt he i rp r o f e s s i ona ls e r v i c e sc os t s - Gr o wi n gs op hi s t i c a t i onl e a d sc l i e nt st od i s a g g r e g a t ec on s u l t i n gs e r vi c e s o Sa v v ya b outa s s e s s i n gj o b st h a tne e dt ob edo ne o Topma n a g e r sofFo r t une500& FTSE100( o nc ec o ns ul t a n t s ) d e s c r i bewe i g hi n gf a c t o r si nde c i d i n gwh e t h e r e x pe ns i v es e r v i c e sofpr e s t i gi o usfir m ma d es e ns e o “ Ima yn o tkn o wt h ea n s we rt omypr obl e m,b utIu s u a l l yr ou gh l y .Kno wt h e20o rs oa na l y s e st h a tne e dt obed on e . Wh e nI ’ ml e s sc onfide nta b ou tt hequ e s t i on& wor kne e de d ,I ’ m mo r et e mpt e dt ous eabi gb r a nd ” - Th e o r y e x p l a i nsdi s a g gr e g a t i on o de s c r i e si n c r e a s e dmodu l a r i z a t i o nofa ni n dus t r ya sc l i e ntn e e dse v o l v e o wes e e( a st he o r yp r e d i c t s )be g i n ni n g sofas h i f ti nc o ns ul t i n g ’ sc omp e t i t i v ed yn a mi cf r om t hepr i ma c yo fi nt e gr a t e d s o l u t i ons hop st omod ul a rpr o vi de r s ,wh i c hs p e c i a l i z ei ns up pl yi n gones p e c i ficl i n ki nv a l u ec h a i n o s h i f ti st r i g g e r e dwhe nc u s t ome r sr e a l i z et h e ya r ep a y i n gt o omu c hf orf e a t ur e st he ydo n ’ tv a l ue& t he ywa ntgr e a t e r s p e e d ,r e s p ons i v e ne s s , &c o nt r ol - a skno wl e dg ei sde moc r a t i z e d,o pa c i t yf a d e s& c l i e n t sn ol on g e rh a v et op a yb i gf e e s - a l t e r n a t i v ep r of e s s i o na ls e r vi c e sfir ms( Ede nMc Ca l l um,Bus i ne s sTa l e n tGr o up)i sa no t h e rc h a p t e ri nmo du l a r i z a t i ons t or y o l e a ne rpr o j e c tt e a mso ff r e e l a nc ec on s u l t a nt sf o ras ma l l e rc os t–t he ydon otc a r r yFCofu ns t a ffe dt i me ,r e a l e s t a t e , r e c r u i t i n g& t r a i ni n g o ma yn otbea bl et od e l i v e re nt i r ev a l uepr o p os i t i o na st r a di t i on a lfir msbutt he yha v ea d v a nt a g e s  mo r ee x pe r i e nc e dc on s u l t a n t s  mo d e la s s u me smo r ec l i e ntc o nt r o lo v e ra pp r o a c h&ou t c ome  t h e s ea t t r i b ut e sa r ec omp e l l i n gwhe npr o j e c t sa r ebe t t e rd e fine d& v a l uea tr i s kno te n o ug ht oj u s t i f ypr i c eo f pr e s t i gi ou sc ons u l t i n gfir m - Ed e nMc Ca l l um o La un c h e di nLo nd on20 00 ,f oc uso ns ma l l e rc l i e nt sn ots e r v e db yt r a di t i ona lfir ms  Somec o nt a c t sa ts ma l l e rc o mpa ni e sha v emo v e di nt os e ni o rp os i t i on sa tl a r g e rc ompa ni e s–t a ki n gEd e n Mc Ca l l u mr e l a t i on s h i pwt h e m - Modu l a r i z a t i onha sf o s t e r e dd a t a -a nda na l yt i c s e n a b l e dc ons u l t i n g “ a s s e t ba s e dc ons ul t i n g” o Tr e ndi n v o l v e spa c k a g i n gi de a s , pr o c e s s e s , f r a me wor k s ,a na l yt i c s ,& o t he ri nt e l l e c t u a lpr op e r t yf oropt i ma ld e l i v e r y vi as of t wa r eo ro t he rt e c h o Huma ni n t e r v e nt i on& c u s t omi z a t i oni sl e s st ha nt r a di t i ona lc o ns ul t i n gfir m  Lo we re xp e ns e so v e rl o n g e rpe r i od( s u bs c r i p t i o norl i c e n s eb a s e df e e ) o App r o a c hi smo s tp e r t i ne ntf o rc ons u l t i n gj obst ha tha v ebe e nr o ut i ni z e d  Unc o v e r i n gas o l u t i oni sawe l lk no wnpr o c e s s ,&s c o peo fs ol u t i o ni swe l lde fin e d  Ma n yde a lwl a r g equ a n t i t i e sofd a t a  Ex . De t e r mi n i n gp r i c i n gs t r a t e gyf orp o r t f ol i oofpr o duc t s a n a l yt i c sa r en e e de d;i n v ol v eda t a , c a ne r o deq u i c kl ya sc i r c u ms t a nc e sc ha n g e  An a l y s i smu s tb eup da t e dc ons t a nt l y  Va l ue a d de dpr o c e s sb us i n e s smo d e lwo ul dbea p p r op r i a t e - Us i n gpr e d i c t i v et e c h& b i gd a t aa na l yt i c st od e l i v e rv a l uef a s t e rt ha nt r a di t i on a lc o ns ul t i n gt e a ms o Ex .Na r r a t i v e Sc i e nc e–u s e sAIa l g or i t hmst or u na na l yt i c s& e x t r a c tk e yi n s i g ht st ha ta et h e nd e l i v e r e dt oc l i e n t s - Li mi t e dnumb e rofc o ns u l t i n gj o b sc a nc ur r e n t l yb epr od uc t i z e d wi l lc h a n g ewd e v e l o pme n tofi n t e l l e c t ua lp r o pe r t y o Le a dst on e wt ool s&f r a me wor ks o Fur t he ra u t o ma t i on& t e c hp r o du c t s - AsAI& b i gd a t ac a p a b i l i t i e si mp r o v e , p a c eofpr od uc t i z a t i onwi l li nc r e a s e I mpl i c a t i o nsf ora nI ndus t r y - Di s r u pt i oni sapr oc e s s–d oe sno tme a nde s t r u c t i on - Th e o r yha s4i mp l i c a t i o ns 1. Ac on s o l i d a t i on–at hi nn i n go ft her a nk s–wi l loc c u ri nt opt i e r so fi ndu s t r yo v e rt i me ,s t r e n gt he n i n gs omefir mswhi l e t op pl i n got he r s o Wi nn e r s–und e r s t a n di n gofe v ol vi n gpr e s s ur e sont h e i rc l i e n t s& a bi l i t yt ob r i n gc l a r i t y& s ki l l o Co r eo fc r i t i c a lwor kwi l ls ur vi v e ,r e qui r i n gc u s t om s o l ut i onst oc o mp l e x ,i nt e r d e p e n de ntpr o b l e ms o Pr e s t i gi o usfir mswi l lpr ob a b l yr e ma i nt h eon l yp l a y e r st h a tc a nc r a c ke n or mou spr o bl e ms& f a c i l i t a t edi ffic u l t c h a n gema n a g e me n tr e q u i r e dt oa d dr e s st h e m 2. I n du s t r yl e a de r s& ob s e r v e r swi l lbet e mpt e dt ot r a c kt h eb a t t l ef orma r k e ts h a r eb ywa t c h i n gt hel a r g e s t , mos tc o v e t e dc l i e n t s , b utt her e a ls t or ywi l lb e g i nws ma l l e rc l i e nt s–b ot ht ho s et h a ta r ea l r e a d ys e r v e db ye x i s t i n gc on s ul t a nc i e s& t h os et ha ta r e n e wt ot hei nd us t r y -

3. Tr a di t i o na lb oun da r i e sbe t we e npr o f e s s i o na ls e r vi c e sa r eb l ur r i n g ,& n e wl a n ds c a pewi l lpr e s e n tn o v e lop por t uni t i e s o Fi r s t fir mst ooffe ri n t e r de pe nd e n ts ol u t i o nst op r o b l e msa r i s i n ga tt he s ei nt e r s e c t i on ss t a ndt og a i nl i o n ’ ss ha r eof v a l ue 4. Th es t e a dyi n v a s i o nofha r da na l yt i c s& t e c h( b i gd a t a )i sac e r t a i nt yi nc o ns ul t i n g ,a si tha sbe e ni ns oma n yot he ri nd us t r i e s o Affe c ta c t i vi t i e so fc on s u l t a nt s&v a l uet he ya d d o Av gc o s t i n g& p r i c i n ga n a l y s i sh a v ebe e nf or mul a t e d& i ns our c e d o Sol u t i o nswp r e di c a t i v ec a pa bi l i t i e swi l li mpr o v ea ndl e v e lt h epl a y i n gfie l di na n yop a q uei n dus t r y o Ma k et her o l eo fj uni o ra na l y s to b s ol e t e - Se l f d i s r u p t i o ni sdi ffic ul t o Se c o ndgu e s s i n ga bo uti n i t i a t i v ep e r s i s t s o Mus tbeo v e r c omee v e r yd a y - Mc Ki ns e ySol ut i on s o I t ss u c c e s swi l ld e p e n do nho wpa r t n e r s hi ps ha pe s& ma n a g e sne woffe r i n g o Co mp e t i t i onwi l la r i s eb e t we e nc or ee n g a g e me ntbus i ne s s& i t soffs p r i n g Di s r upt i o ni sI ne v i t abl e - t h os ewh or e j e c t e ddi s r u pt i on o Di ffic u l t yo fg e t t i n gl a r g epa r t ne r s h i pst oa gr e eonr e v o l ut i ona r ys t r a t e g i e s o Tooma n yt hi n g sc ou l dn e v e rbec o mmodi t i z e d - Ev e r yi n du s t r ywi l lf a c edi s r u pt i on o De v a s t a t i n ge ffe c t sonpr o vi de r st h a t don ’ tk e e pup o Somei nc u mbe n t swi l lbec a u gh tb ys ur p r i s e...