BCG – Putting Data at the Forefront of Consulting Services
Many companies recognize the growing need for data but less have the capabilities to manage and implement their data. That’s where BCG comes in.
Company Background:
Boston Consulting Group (BCG) is a management consulting firm founded in 1963. The firm’s prestige among the Big Three is accompanied by the revenue stats making it the second largest consulting firm in the world. On a basic level, BCG charges client fees in exchange for their expert advice. Many firms do offer implementation services that go beyond the advice stage.
Value Creation
Overall, the BCG strategy around data and analytics attempts to streamline the strategy and implementation process for their client firms [1]. BCG uses expertise to help foster client success in building and scaling their internal capabilities. To do this, they have created specialized groups of talent that can be integrated with the more traditional consultants per client needs. The key groups include: GAMMA, Platinion, Digital Ventures, and Omnia
BCG GAMMA is likely the most robust specialty group offered by the firm. It covers a wide variety of analytic applications such as machine learning, optimization, simulation, natural language processing, and image analytics [1]. Their services help clients build the awareness of their competitive advantages and disadvantages. A case can be made for most companies finding usefulness in this service as the data driven world creeps into all markets. This is especially so in case work that hinges on implementation.
BCG Digital Ventures is more out of the box in terms of traditional consulting services. Founded in 2014, this business unit is an early-stage platform that “partners with companies to quickly invent, launch, scale, and invest in revolutionary businesses” [3]. With a diverse and cross-functional team, they propose to offer deep-tech tools that are essential to business-building.
Challenges
Competition is a key challenge for BCG as they are not the only firm to build out vigorous data analytics teams. The first layer of competition comes from the long-term competitors such as Bain and McKinsey. However, the competition in the data space will exceed the traditional consulting realm.
A real threat could be evolutionary software that simplifies the big data world for those who are inexperienced. This type of application or software could come from firms like Google, Amazon, or even a private firm we have yet to hear of. Staying ahead of the advancements in this space will be critical to BCG’s ability to continue offering a needed specialty service.
Sources:
[1] https://www.bcg.com/capabilities/digital-technology-data/data-analytics
[2] https://www.bcg.com/beyond-consulting/bcg-gamma/default
[3] https://www.bcg.com/en-us/beyond-consulting/bcg-digital-ventures/overview
Thank you so much for this Shekeyla! This is something I personally observed during my time in management consulting as well. At Bain, we have the Advance Analytics Group (AAG) that also set out to offer similar services to BCG Gamma. That said, I agree with your assessment that the real competition will be from firms such as Google and Amazon Web Services.
Very interesting to see who will be at the forefront of this field.
Great post Shekeyla! I am curious to know if BCG is building these capabilities from ground up or acquiring companies with existing capabilities? Also, what is the value add doing it inhouse vs outsourcing data capabilities to help the client?
My hunch is that there is a mix. I think there was likely more acquisition in the earlier stages of the programs but now they are sustainable on their own. I think the desire is to provide this in-house so that they can control more of it as a service going forward.
Here is an example of an acquisition to grow Gamma: https://www.bcg.com/press/20may2019-bcg-acquires-kernel-analytics
Thanks for the post Shekeyla! It’s interesting to notice that digital technologies have incentivized the consulting industry to become more specialized, even the traditional ‘generalist’ consulting firms are moving this way.
The inception of BCG Gamma is a great example. I wonder how consulting firms could also take advantage of the data that clients share with them to enhance their internal data analysis capabilities and improve their predictive models and their own internal processes.
I agree, there is a real force pushing the traditional generalist out of their box. I worked over the summer as a traditional consultant but I was partnered with the Gamma team. This certainly pushed me to be more skilled in the digital area just to stay in the know!
Great post! I’m curious about which type of clients does BCG Gamma usually attract. Is BCG being able to offer these services to their existing clients base, or is it targeting a new market? And I’m also wondering if companies which have tech at their core demand these services, or develop their own capabilities in-house.
I worked on a team that included BCG Gamma during my summer internship. Happy to chat about the client type we were serving! They are a tech heavy fitness company but they needed help utilizing the data they were gathering.
I’ll be joining BCG next year and I found this post very interesting 🙂
Same as Tomas, I’d like to know more on BCG Gamma’s clients!
Good to know I have another future co-worker! Happy to chat separately about my experience with Gamma.