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Information Technology Consulting

Background

The field of information technology consulting emerged in the 1980s and 1990s, as computer operating systems started to become more complex and businesses needed outside help to manage them. To understand the foundation of the industry, however, it’s helpful to look first at the origins of the two different areas of the business: information technology and consulting. Information technology has roots that date back thousands of years, while the general consulting industry is young by comparison, starting in the late 1800s and early 1900s.

Information Technology Origins

Some inventions that laid the foundation for information technology are the abacus, the digital calculator, the punch-card system, the computer, and the Internet and the World Wide Web. The abacus is considered the first computer. Invented in China around 500 B.C., it’s a simple device made of strings and beads that helps with counting large numbers. It gained popularity during the Middles Ages and is actually still used today in some parts of the world. In 1642, French scientist and philosopher Blaise Pascal created the first digital calculator, also known as the Pascaline, which consisted of toothed wheels that were turned by hand to calculate numbers. He invented this mechanical counting device to help his father in his work as a tax supervisor. In the 1970s, early computer programmers acknowledged Pascal’s major contribution to the field by naming a programming language for him.

The punch-card system was the originator of data-processing techniques. The first appearance of the punch-card idea was at the World’s Fair in 1801, when French weaver Joseph-Marie Jacquard introduced a loom that used cards with holes punched into them for different patterns. These punched cards could be arranged in certain orders to create the patterns. The cards enabled designs to be repeated, and for the design information to be stored—concepts that are the basis for computing. Punch cards evolved over the next 150 years, with important contributions by Charles Babbage, in 1833, who invented the analytical engine, and by Herman Hollerith, who in the 1800s and early 1900s discovered the electronic capability for punch cards and founded the Calculating-Tabulating-Recording Company (later named International Business Machines, or IBM). By the 1940s, punched cards were used in Electronic Numerical Integrator and Calculator (ENIAC), the world’s first computer that was created for the U.S. Army.

The computer evolved from the 1950s as other inventions were incorporated, such as transistors, integrated circuits that increased operating speed and capacity, minicomputers (which were smaller than the room-sized computers of the earlier days), and microchips. The Apple Macintosh computer got its start in the 1970s, when Steve Wozniak and Steve Jobs created a computer that was user friendly and affordable. IBM and other computer manufacturers soon followed and introduced their version of personal computers to the market.

The Internet, which refers to the back-end network system, got its start in the late 1960s with the U.S. government’s ARPANET (Advanced Research Projects Agency Network), which was a system of several computers connected to each other in a lab at the University of California in Los Angeles and at the Stanford Research Institute. The World Wide Web, which is the body of online information available for retrieval, originated in late 1980s and early 1990s, when software engineer Tim Berners-Lee introduced his idea for information management and wrote the foundations for the Web, including the language (HTML, hypertext markup language), uniform resource locator (URL, the identity of the Web page), and hypertext transfer protocol (HTTP, used for linking and transferring information in the Web). By 1991 the Web was available to the general public. Since then, the Internet and the Web have revolutionized how the world shares information. Today there are e-mail services, social networking, video conferencing in real time, e-commerce, as well as online education and entertainment. The development of mobile devices, such as smartphones, tablets, and laptops, have increased the use of Internet and the Web for information sharing. As of February 2017, there were more than 1.1 billion Web sites and more than 3.5 billion Internet users, according to InternetLiveStats.com.

Consulting Business Origins

In the United States, consulting businesses started to appear in the late 1800s and early 1900s, during the Industrial Revolution. Companies sought the help of consultants to improve worker productivity, tackle management issues, streamline their business operations, market their products and services, and increase sales.

The first management consulting firms were Arthur D. Little, established in 1886 by a Massachusetts Institute of Technology professor of the same name, and Frederick Winslow Taylor’s practice, established in 1893. Little’s firm specialized initially in technical research and later became a general management consultancy. Winslow, a mechanical engineer, focused his consulting services on scientific management, which studied how work flowed and how labor was divided. The consulting work that Ivy Ledbetter Lee did in the early 1900s also helped to lay the foundation for the consulting industry. For instance, in 1906, he helped to open up communications between coal mine operators and the press, to bring more information about mining activities to the public. He went on to offer his public relations expertise for clients such as the Pennsylvania Railroad Company and the Rockefeller family.

McKinsey & Company, which today offers information technology consulting services among numerous other services to clients, is also an early management consulting firm. It was established in 1926 by James O. McKinsey, former professor of accounting at the University of Chicago, to provide financial and accounting advice for local companies. His innovative idea was that management consulting advice could help not only ailing companies, but also improve and optimize operations for companies that were already healthy and in good standing. After McKinsey’s death in 1937, his business partner, Marvin Bower, expanded on his work and helped to grow the management consulting industry over the next few decades. Bower recruited graduate students and MBAs to work as consultants, which helped to grow U.S. business schools. He established a high level of professionalism in the business: Clients’ needs were the top priority, and superior service and the adherence to high ethical standards were expected of McKinsey’s consultants. These standards continue to this day and are what have made McKinsey & Company among the most prestigious consulting firms in the world.

Consulting firms grew during the 1930s, when companies needed help because of the Great Depression. Laws that were passed after the Great Depression to tightly regulate banks, such as the Glass-Steagall Banking Act and the U.S. Securities and Exchange Commission, increased demand for consulting firms to help banks and financial organizations comply with the mandates. World War II created the need for consultants’ help with wartime manufacturing issues and wartime fundraising and publicity. Starting in the 1950s, politicians hired consultants for help with political campaigns. The 1970s saw the globalization of the general consulting industry.

Information Technology Consulting Emerges

The information technology consultant field started to appear in the late 1980s and the 1990s, when computer use became prevalent in businesses. Management consulting firms started to add information technology consulting to their services for clients. The big accounting firms also realized the potential for IT consulting and added it to their services. The Big Eight accounting firms at the time that introduced IT consulting services were Arthur Andersen; Arthur Young & Company; Coopers & Lybrand; Ernst & Whinney; Deloitte, Haskins & Sells; KPMG; Touche Ross; and Price Waterhouse. These companies are now known as the Big Four: PricewaterhouseCoopers; KPMG; Ernst & Young; Deloitte Touche Tohmatsu.

Today, companies around the world offer IT consulting services. Information technology consulting continues to be in demand by businesses, governments, nonprofit organizations, and schools. The growth of mobile devices, cloud computing, the Internet, social media, and other technological innovations have added to the areas that information technology consultants cover for their clients.