Business for companies and IT services firms is in a transition due to the rise of the digitally-enabled platform-based business. Phil Fersht points out that just as other companies have run multiple business models as part of a transition strategy, so should IT services firms.

The Transition Economy for Consulting Firms

They’re all doing similar types of models, based around the new versus the present. It’s not too dissimilar to what happened in ERP, for example where we’ve seen the big ERP vendor’s like SAP and Oracle, protect their legacy on-premise businesses, while figuring out how we get ahead of the SaaS curve. Because our client eventually go to SaaS. How do you have a phased evolution to get in there. And it’s the same going on with services: taking clients from labor arbitrage through to as-a-service. It’s a phased approach. Some clients are wanting to go at a slower pace than others.

It’ll take five, 10, 15 years, hey you know companies still use mainframe computers and this isn’t going to happen overnight. We’re in a transition economy and we need to all get ahead of it.