Digital Transformation & Technology Consulting using strategic data: A paradigm shift in consulting firms to delivery faster & high quality results.
Digital technology has changed the way consulting is done today. Consulting firms must change themselves and their process to deliver the fast, cost-effective, high-quality innovations their customers demand.
Previously, consulting companies could be classified according to traditional workflows such as operations and implementation for companies like Accenture, or IBM, or management strategy for companies like Bain or BCG. In recent years consultants have seen changes in the market, as traditional management consulting makes up for a small portion of the revenue. As more and more clients take up digital technology services, management consultants have alternated technology-driven work with traditional strategic commitments. This means operational companies strengthen their strategic groups and business consultants were forced to follow suit and develop digital practices.
When digital changes occur, consulting firms had to change their method, more focused on data and experience. Where advanced industry knowledge was essential in traditional business consulting, digital and cloud technologies were important to better understand the experience and recreate business models using data. Companies that can provide the best data and technology capabilities can deliver better value to their customers.
Digitization opened the door for consulting companies to a lot of untapped potential: customers needed guidance in the transformation to the digital future, understand new technologies and implement new products to attract their clients. The time, energy and resources required to modernize old technologies were enormous. Consulting companies jumped on the technology train by hiring fewer MBAs and more developers or developing their digital practices like McKinsey Solutions did.
Customer expectations have also changed. Consulting companies strive to offer their customers the added value they cannot get in-house. Consultants must provide the required knowledge and data that Google can't! The client’s appetite towards faster innovation, agile cycles and greater-than-ever success was staggering and consulting firms were quick to latch onto the new normal. The work has fundamentally changed: customers need qualified consultants to build applications, deploy solutions like Salesforce, develop new products, manage data centers and analyse data whilst providing in-depth information with actionable results. The functional part of traditional strategies decreases. It all comes down to this: customers don't need just strategy - they need strategic technology. Clients were looking for partners who recognize the desired digital commercial nature. Consulting firms evolved to innovatively implement digital advice, technological assets and engagement models which, in the end, allow and accelerate the digital journey of the client. This is what consulting firms did with strategic technical reflection from both sides: internally, with their employees and externally, with their clients.
Data means everything
Strategic technology means that consulting firms can help clients use their technical tools and resources to achieve the best business results. It was about how to put all the little things the client can do together to make a strategic headway in the industry. The ability to see which tools and technologies are available, significantly bringing them together and making them profitable. Consultants must, therefore, master new technologies and expertise to help clients. Good consultants need to bridge the gap between strategy and technology and focus on skills, technology and products applying them to business problems. It is a change of skills and the consulting companies embraced it.
While strategic technology has many components, one of the most important skills that consulting firms needed was a solid understanding of data. Data is perhaps the most valuable asset of the digital age. Businesses collect data every day and data warehouses are growing exponentially. The key to improving business is how they can monetize that data. Clients need products and services that allow them to acquire advanced knowledge and use that knowledge to provide their customers with a better experience.
The competitive landscape of the future was changing for businesses. Large companies will compete for the most valuable data.
For large companies the focus areas were constant growth, leverage of data, acquire companies to fill data gaps and capabilities. Applying existing analytical knowledge was the key. Consulting firms used to purchase data sets and develop their data skills. Companies also partnered to create data ecosystems from which customers can benefit.
Take for instance a small franchise consultancy that uses Google Maps API to collect franchise location data for large restaurant chains. Now consider the purchase of an average postal code income record and a population density record, which can be compiled from the census or other sources like Verizon. By combining these sources of information, a product can be created to select the ideal location for a franchise. This is the type of data-based practice that consultant companies purchased. The more exclusive the data, the better.
For small businesses, a clear set of data will set them apart and make them useful. Take Nuna, a Medicaid start-up. It created a cloud database with Medicaid information from 50 countries. This information (after removing all confidential information from the patients) will be very valuable in the future as it will allow the monitoring of billing patterns in different groups and the effect of certain medical programs. Governments can potentially use this to monitor how the Medicaid system operates in some states. This niche record is very precious and Nuna has VC support.
The existing era
New technologies and digitization have done more consulting work than ever before, but they have also changed the old consulting model after over a century. Consulting companies are transforming clients and at the same time achieving transformations. We have started to focus on strategic data and technology. We will continue to see a change in the way consulting firms engage and work with strategic partners, competitors and clients