Finally, Critical Mass? The Role of Management Consultancies in the Near-Mature AR/VR Market

Augmented reality and virtual reality (AR/VR) have fallen short of initial hype and are yet to reach their genuinely transformative potential. For several years, bulky form factors, power consumption constraints, and network connectivity issues meant that AR/VR applications remained limited to a select set. Apart from gaming at the consumer end and a few instances of hi-tech field services by large enterprises, AR/VR was mainly in “experimentation” mode.

Management consultancies play an essential role in turning things around. Initially, the AR/VR game rules were set by two companies: media giants and hardware manufacturers who invested deeply in AR/VR and niche AR/VR startups, primarily providing SaaS platforms. Now, another crucial player has entered the arena — the top tier management consultancy firm.

Right Place at the Right Time

For management consultancies venturing into AR/VR, the timing couldn’t be better. According to a recent Facebook study, there has been a 2X growth in interest in AR/VR among emerging markets. Membership in AR/VR groups has increased by 74%, and 3 in 4 business leaders anticipate using one of these technologies by 2023.

The pandemic has only added to demand, as immersive technologies could help bridge some of the gap created by limited face-to-face interactions. In this context, AR/VR-based learning and AR/VR assisted field support present enormous potential.

However, a big challenge with AR/VR — if I put it, the challenge is that most companies don’t know where to start. Should they target a standalone pilot? Or, is an end-to-end overhaul with strategic AR/VR interventions across business verticals a better idea? How does one align hardware scope with business needs? What do the ideal AR/VR services and software consumption model look like for recurring and one-time costs? That’s where top tier management consultancies come in.

They are powered by four key themes:

1. Business first — The firm assesses the to-be-achieved business goal in a quantifiable manner to plan AR/VR intervention.
2. Integration brokers — Leveraging their partnerships with big and small AR/VR companies, they can create a cohesive landscape.
3. Data-driven — The firm offers dashboards and monitoring tools to measure the business impact of AR/VR, helping to get buy-in.
4. Thought leadership — They conduct regular and thorough research to anticipate future trends, invest in in-house innovation, and help clients stay ahead of the curve.

In other words, management consultancies are uniquely positioned to connect AR/VR applications with business use cases and proven outcomes to provide a pragmatic AR/VR adoption roadmap to client companies.

Snapshots from Market Leaders

Let us now look at three management consultancy firms that have made inroads into AR/VR with rich dividends.

McKinsey

McKinsey has a dedicated enterprise VR service line as well as strong technical capabilities. It recently built its own VR platform to help clients create new products faster by testing them in VR and improving existing products where possible. In addition, McKinsey has undertaken exhaustive research on AR/VR consumption and market sentiment in relevant regions.

Bain

At Bain, AR/VR is part of its 2018-formed Advanced Digital and Product Team (ADAPT), including some of the most cutting-edge and disruptive tech tools available to enterprises today. According to IDC, the company is recognised as a Leader in digital strategy consulting services, and its AR/VR expertise is instrumental for this function. Bain targets AR/VR implementations in various sectors and scenarios such as healthcare, retail, entertainment, and industrial environments.

BCG

BCG has a highly mature AR/VR practice with a specific focus on field services for the industrial sector. The company has its app (available for download on Apple and Android app stores) that combines AR with the Internet of Things (IoT) to improve field support. The company also conducts exhaustive research and thought leadership spanning the entire breadth of immersive technologies, including MR.

Similarly, PwC and Deloitte offer an impressive portfolio of AR/VR services, augmenting the competencies of their other arms. PwC even runs a campaign called #SeeingisBelieving for country-specific insights on AR/VR impact on businesses and the economy. If you are interested in knowing what management consulting firms are doing with AR/VR technologies, you can email me at Arvind@am-pmassociates.com.

Not All Smooth Sailing

Now for the bad news: while the future of AR/VR + management consultancy is promising, there are a few pitfalls. First, AR/VR costs remain exorbitant and maybe too prohibitive if consultancy forms are brought in during an organisation’s early stages of growth.

Also, it means that AR/VR remains restricted to only those who can afford it. One might even argue that management consultancy firms could widen the gap between large enterprises and smaller outfits regarding AR/VR maturity. One way to counter this is through a proactive focus on democratisation and the SMB segment, and another would be to provide packaged offerings that are more accessible to a broad user base.

To discuss how management consultancy firms could rejig AR/VR and for more information on the insights shared in this article, please email me at Arvind@am-pmassociates.com.