Digital Disruption and State of the Consulting Industry - Research findings
Digital disruption is no longer an add-on feature to existing business strategies. In fact, if you look around, you will notice that most components of your client’s journey have already been digitized. But, clients are yet to fully transform the way they operate to realize the benefits of a digitally disrupted business model. The consulting industry plays an important role in this digital journey.
But, ironically, the consulting industry has not yet fully realized the benefits nor felt the disruption of a digitally transformed business model either. Perhaps a victim of its own success, the consulting industry grew at 7.7% in 2015 according to Source Global, many consultants have not yet felt the need to make substantive changes. The lack of digitally enabled processes means the industry could witness the largest transformation yet.
A study by Forrester Research suggests that “professional and business services” so far, is in the early stages of digital adoption and has the potential for significant disruption.
Our most recent research on “The State of the Consulting Industry” further validates this with strong levels of agreement on the impact of digital transformation and equally strong agreement on how far consultants have to go in their own digital transformation. Our research, has found that just over 74 percent of participants are currently offering digital transformation services to their clients.
With more than eighty-five responses so far, we have collected some interesting insights that we think are worth sharing:
The Insights So Far
1. Respondents are spending a significant amount of time on non-value adding activities
Despite all the digital tools available today to help teams collaborate better on projects, the point that many consultants seem to be missing is a single platform that enables them to analyze a data set, rather than analyzing data in disparate spreadsheets.
According to our research, 30% of respondents are spending 20+ hours to aggregate data for client presentations. 42% are spending 16+ and 69% spend greater than 11 hours collecting and organizing data for a single presentation.
2. A significant amount of client data is still being stored in non-secure channels
A large segment of our respondents indicated that their firms continue to store data in non-secure places like the company intranet and excel spreadsheets. This is especially alarming because the storage of client data on individual hard drives and spreadsheets makes it highly susceptible to security breaches. But, with the help of the right digital consulting tools, consultants can easily secure their firm’s intellectual property and client data without having to ever worry about
3. Managing partners overestimate the information sharing of client and IP data relative to consultants and engagement leads
When asked how much visibility colleagues had into customer data and consulting frameworks, the answers varied. One metric that did stand out was about managing directors suggesting that there is a higher level of information sharing in contrast with consultants and engagements leads (presumably the audience accessing those data sources) who did not seem to think so.
4. Lack of technology and management buy-in are the biggest inhibitors to being more digital.
With digital continuing to gain more momentum, senior management will soon be faced with the reality of the situation. That is, they will need to start thinking about ways to integrate digital thinking with the customer’s journey. Adopting the right technology will be key, but having a mindset that is willing to change will be essential.
5. There is strong agreement across all segments that digital disruption will shape the business environment in the next five years. However, consultants feel they are not very far in their own digitization path.
The management consulting industry is one of the last industries to embrace the benefits of digital. Due to their unique stance in the business world, many consulting firms, particularly the top firms, have thus far largely evaded the move towards digital transformation. Part of the reason for this reluctance is that a large portion of the traditional consulting model relies on relationships and the expertise or human thought that consultants bring to a client site. Consultants are often unwilling to adopt technology because they believe it will shift that focus.
Note: The article has been republished with permission from the author