Management consulting goes digital

Management consulting is undergoing a digital revolution, says Paul Connolly, director of the MCA think-tank

Consultants thrive by helping businesses change and grow. What’s happening in consulting reflects what’s coming in the economy.

The MCA estimates that over a quarter of all consulting assignments are now digital. This is because digital is changing everything and creating new growth possibilities.

Telecoms, TV, books, music: these used to be separate industries with separate supply chains. Now common digital coding brings them all to your smartphone. Sector boundaries are collapsing. BT moves into TV programming. Tesco produces its own tablet, the Hudl. Supply chains narrow. Musicians create sensations on YouTube, then sell tracks direct to consumers.

New products are emerging that combine goods and how they are bought. Take paint: inescapably physical, seemingly undigital. Yet new technology could enable consumers to upload pictures of their home to a manufacturer’s website and test colours. The manufacturer could deploy big data analytics to understand customers. Who are they? Why do they want paint? Do they read style magazines or like it cheap and cheerful? Paint sales can be linked to other domestic products in ways that match customers’ needs. Buying experience and product become one.

The only predictable thing about the digital future is unpredictability

Consulting is growing by adapting to these new possibilities, often in cutting-edge ways. Optimos Consulting applies big data to help financial institutions interrogate reams of historical information to understand what’s happening in their business and what customers want. IBM created a virtual Jaguar Land Rover experience for customers and Deloitte delivered John Lewis’s new online sales platform.

Digital impacts brands. So as digital advisory grows, marketing consulting is becoming more prominent. Traditional consulting is evolving too. The old-fashioned approach to managing programmes was to list tasks and tick them off.

But now, as Saleem Ahmed at Moorhouse says: “Digital provides real-time project information, allowing more responsive, fluid and decisive approaches to resolving issues.”

In strategy work, consultants used to assess a business’s options and help them plan – “ready, aim, fire”. However, the only predictable thing about the digital future is unpredictability. And there’s little time to deliberate.

Fortunately, digital is agile. It reduces the cost of risk-taking and failure. So firms try things out, then adjust – “ready, fire, aim” or even just “fire”.  But they still need critical friends to test their hunches. Hitachi Consulting’s new platform, The Hitachi Labs, helps clients innovate, fail, learn and implement new ideas fast.

This new digital growth may not be perfectly understood or even recognised. As Carlo Gagliardi, a partner at PwC, says: “Digital is creating new forms of value that aren’t captured by traditional sectorial measures of GDP. An increasing amount of unconventional and highly innovative services is emerging every day. Many of these create value by making people achieve desired outcomes better, rather than just by executing a transaction. These new forms of value creation aren’t even truly factored into our measures of growth.”

In our forthcoming Year of Digital, MCA members will continue to adjust to this new growth – and even try to measure it.