As the US tech giants continue to grow aggressively and expand their range of services, they have ramped up use of consultants, according to Source Global Research.

The professional services industry analysis firm found tech industry revenues rose 13.4 per cent to $4.8 billion last year – growing by over $1 billion in just two years. The global technology, media and telecom (TMT) consulting market grew more slowly at 8.8 per cent to $12.9 billion in 2018.

Risk and regulatory projects were also on the up in the TMT sector, especially in relation to data privacy, something which is proving to be a boon for consultants in the tech market.

Gordon Tucker, managing director of global consulting firm Protiviti, said: “Tech companies have been relatively unencumbered by significant regulation in the past; now the day of reckoning is here.

“We're helping our clients to be aware of how best to prepare for an increased regulatory environment, and helping them develop and implement an effective approach to increasing regulation.”

The Source report also found that the General Data Protection Regulation (GDPR) has been a game changer for many risk and regulatory firms serving the tech industry, generating significant volumes of work before it came into effect in May 2018, and continuing to generate work as clients with European operations seek to remain compliant with every process change or new product that is launched.

Ashok Patel, an editor at Source, explained: “Whether it is the EU’s investigations into the business practices of the big US tech companies, the US Congressional hearings into how some of the biggest Silicon Valley companies operate, or the introduction of data privacy laws in Europe, California, Brazil, and elsewhere, companies reached out to consultants for support navigating the increasingly tricky regulatory waters and to ensure they are compliant with new laws ahead of the deadline.”

Other areas where high-tech companies are turning to consultants for support include:

• Revamping back offices – the need for BigTech companies to revamp their back offices remains a key driver of work, as the rapid expansion of operations has shone a light on the inadequacies of internal functions. Some consulting firms are seeing a growing demand for managed services in this space as companies appreciate the ability to offload some back-office needs and re-task tech-savvy talent to customer-facing issues and services.

• Business model changes – particularly in the legacy technology market as companies explore how best to respond to disruption. With the days of selling hardware and software for a premium seemingly in the past, more and more companies are moving to new ‘as-a-service’ models. The transition from one-off single-sale revenue structures to longer-term subscription sales models - often with lower upfront prices - is a complicated one that requires consulting firms to support through every stage of this transition.

• Moving tech manufacturing out of China – as many multinational tech companies use China as their manufacturing hub, the breakdown of the US-China relationship, in addition to growing tensions between China and other countries, has caused alarm. As a result, many US-based tech companies, including Apple and Google, have started to look for alternative locations for their manufacturing operations, with India and South East Asia the main beneficiaries. Consultants are benefiting from tech companies seeking support to shift these complex manufacturing operations, and explore how to protect their wider supply chains.

Patel concluded: “The tech consulting market has hit double digit growth rates for the last four years, and we don’t expect this trend to change anytime soon.

“Regulation will remain a key driver as more countries continue to explore their own data privacy legislation, there is likely to be a significant growth in demand for data privacy expertise in the high-tech industry.”

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