Most consulting firms would probably answer this question with “yes”. According to various studies, however, the picture among clients is still much more heterogeneous. While some fully embrace the digital trend, others can’t be bothered with digital “fashion”. Why? Digital transformation projects are highly complex and can have very different starting positions and levers: Digital customer experiences, digital products & services, process automation, analytics and customer journeys, platform business models are just a few examples of the many ways in which new technologies can be used to adapt customer offerings, processes, systems and working methods to the new market environment. But not everything is suitable for everyone.
Due to the complexity and novelty of digital topics, the need for external consulting support in the digital environment has strongly increased. However, the experiences of clients with the results of these digital transformation projects are mixed, as the latest Cardea consulting market trend study shows. Only 18% of surveyed clients state that consultants have fully met the expectations in terms of relevance of results for and alignment of results with the daily business of the client organizations. About every fourth client also complains about a lack of detailed work and the lack of discovery of groundbreaking innovations by the consultants.
The mentioned study also examined the reasons why this happens. Much is owed to the fact that digital transformation projects require holistic approaches and the interplay of interdisciplinary experiences and competencies. Some of the hybrid management and IT consultancies and digital agencies (which are considered by clients to cover best the required integrated portfolio for digital projects) seem still to struggle with Finding ways to break down internal barriers and ensure that people with very different skills and perspectives can work seamlessly together.
Time, therefore, to take a look at the most important characteristics that consulting firms should bring to the successful accomplishment of digital transformation projects. These characteristics have to be “checked & matched” thoroughly by clients when selecting consulting companies for digital projects.
Most customers lack specialist and technological know-how for new digital topics or implementation capacities for digital projects. If one considers the “ingredients” of a “good” (successful) digital transformation, then a consulting firm must be able to demonstrate the following capabilites and skills:
- Strategy skills, because without strategic focus no change project will be successful
- Innovation capability, because new market conditions require clients sometimes to completely rething their business models, processes or systems
- Understanding of customers and markets, because any digital transformation has to be assessed based on its financial impact for an organization and the value it creates for end customers
- End-to-end approach & portfolio, because digital transformation projects must consider the entire value chain of an organization as well as its “enablers” (organisational structure, people, culture, technology)
- Understanding of technology & analytics, not only in terms of knowledge of new technology but also in terms of system implementation and integration skills
- Marketing, design and creative skills, because for digital change it is important to connect front and backend processes and to create cross-organisational and cross-channel customer experiences
- People & cultural transformation, because an organisation cannot be transformed without transforming its people
- Modern methods and approaches in the area of innovation, agile project management, prototyping and testing, because speed will play a key role here.
Few consultancies are likely to be able to fully cover all competencies in breadth and depth. And even if they do, the difficult task of ensuring that people with very different skills and perspectives can work seamlessly together has to be mastered.
When choosing a consultant, it should be noted that these criteria may require different weightings depending on the focus of the digital transformation. Sometimes, for example, technology, sometimes organization and people or sometimes new products and services are the main focus of a digital initiative. It is also important to consider whether it’s better to turn to an “all-in-one” (one-stop shop) or to specialist consultants.
Although clients tend to rely more often on large, international consulting firms for larger-scale strategic projects, the importance of scale and brand of a consulting company is decreasing especially for digital transformation projects. Not only a consulting company’s expertise, best practice know-how, functional capabilities and resources are important (all factors which potentially can be assessed before a project engagement), but increasingly attributes such as delivery to promises, pragmatism and solution orientation.
The “mere accumulation” of advisory services and functional and/or technological competence is not sufficient or does not yet generate added value. Rather, it is a question of whether consulting firms manage to bundle their services in a meaningful and multidisciplinary way into coherent service offerings and thereby offer “game changing” results for customers. Consulting companies increasingly differentiate themselves and create added value for customers through the way they work with customers and their ability to develop solutions and implement results.
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