Digital Consulting – Dreams and Realities

With the business world considering digital transformation as the next big, and now an inevitable step, digital consulting businesses seem to have garnered the attention. Mostly due to the gap that businesses feel exists between their understanding of technology and the possibility of digital transformation results.

A recent survey by an Indian tech giant HCL Technologies shows that less than half of the businesses considering digital transformation are managing IT in-house. Remaining have either partnered with some technology expert or are relying on consultants.

Why Digital Consultants?

Many businesses use consultants as a tool of last resort, only when their own internal staff falls short of the solutions. When it comes to digital transformation, about half of the organizations feel that lack of skills internally is a hurdle on the way. Although, enterprises which were already advance at one time technologically, also find lack of skills and legacy systems a hurdle in digital transformation.

Therefore, for such businesses, digital consultants with experience in digital transformation of similar business become important. Furthermore, consultants bring in the external perspective which your internal staff may be missing. The externally oriented thought is important since customer orientation is at the core of digital transformation. Any business transformation in the digital world, which is not consumer centric will surely be a recipe for failure.

When to Hire a Digital Consultant?

Like any other business consulting project, the digital consultant should be brought in at any of the following three stages in the digital transformation journey:

  1. Exploration Stage: When you are still trying to grapple with expectations and priorities of digitalization in your business. At this stage, you try to answer the “What” question.
  2. Strategy Stage: When you have cleared the first hurdle and have a satisfactory answer to the first question but need to develop a roadmap for implementation. This is the stage where you must find the “How” part of your digital transformation journey (i.e. define digital transformation strategy)
  3. Implementation Stage: This is where you jump on the tech bandwagon and integrating technology and transforming your business functions in digital first departments.

Where will your organization need consultants will purely depend upon the internal competencies and work environment within. Apparently, both are a challenge for non-native businesses seeking to jump in the digital pool.

Digital Consulting Expectations

The possibility of digitalization can easily set very high expectations for non-digital native businesses. Especially when we have the likes of Google, Netflix, and Amazon to look up to. These expectations are generally aggravated by the need for rapid transformation. Here’s what general expectations of the non-digital native businesses look like from digital transformation:

  • Improved customer interactions, and experience including consistent multi-channel engagement
  • Faster processes and higher inter-departmental co-ordination for innovative solutions
  • Lower cost of operations
  • Faster decision making by managers
  • Organization regularly upgrading its digital capabilities to meet the market developments

It is not surprising if these expectations find a place in negotiations and deliverables of digital consultants for these organizations.

Digital Consulting Realities

Once again, the realities of digital transformation will vary from business to business. For example, digital-native businesses (with digital customer UI/UX) may focus on talent management and vendor interactions. On the other hand, non-digital native businesses would want to focus on digitalization of customer interaction before anything else. The expectations from the consultants should be set accordingly. However, the challenges that lead to failure of such efforts mostly lie in the implementation phase, thus affecting most businesses.

Here is a list of challenges faced by businesses looking for digital transformation:

Exploration Stage Challenges

Exploration challenges refer to the challenges managers face while setting up the transformation objectives for the organization. Or in other words, while answering why they should transform and what should transformation achieve for them.

Understanding Existing Processes

As per an HBR report, about 90% of the organizations looking for digital integration suffer this hurdle. Often, it’s not the process itself which is complicated but the process outcomes at various levels, which may be difficult or impossible to maintain in the digital environment. However, this lack of understanding regardless of reasons is one of the most common cause of stalled digitalization process.

Setting Functional Priorities

Multiple researches reveal that about 80% of the organizations with any kind of digital transformation strategy have formed it for part of the business only. The reports also state that there are only 10% serious contenders for comprehensive formal digital transformation strategy. Whether the process complexity has anything to do with it is still unclear, yet IDC predicts that 70% of siloed digital transformation efforts can fail by 2018. Looking at the studies conducted on successful transitions by other prominent names, IDCs prediction may be right unless the organizations:

  • Have a comprehensive strategy encompassing functions, departments LOBs and workforce
  • Have reimagined the business as a digital native, customer being the center of it

Strategy Stage Challenges

Preparing the digital strategy requires clarity of purpose (exploration) and skilled leadership which can assist your enterprise re-imagine the business from a digital first perspective. The challenges faced by organizations in this phase are aligned as follows:

Technology Intimacy

Only a quarter of organizations looking for digital transformation consider themselves cloud native, and even more find keeping pace with the technological changes challenging. These might be one of the reasons behind the struggle managers planning digital transformation face while explaining the impact of the activity. The solution for these problems, however, may only be brought in from the outside either in the form of a consultant, partner or CIO/CDO.

Lack of Talent Pool

While the technology platform adoption will be defined directly by the customers, the CXOs will only need to ensure the change within the organization. Legacy systems, existing culture, thought processes and power centers might all pose a threat to your digital strategy. Thus, digital transformation strategy is going to be less about technology and more about the ‘adoption of technology by the people’ (human capital).

Your employees (internal stakeholders) are going to have a lot to say about the tech and the process that tech adopts in the long run. Given the lack of talent outside, the solution could only be to re-train the talent pool inside, identify change leaders and empower them to lead the change.

Implementation Stage Challenges

After objectives and strategic challenges are sorted implementation is only limited by money and talent pool. Therefore, secure the investments with the strategic plan then let the change leadership team run the implementation. If your business is not digital native (manufacturing, BFSI, etc.) you may need external consultants to implement tech solutions for you.