Last year, we discussed the prevalence of digital transformation buzz in the market. The term itself was a top performer on Google Trends in 2016 and now into 2017. Consultancies were quick to move on the opportunities the buzz created. Source Global Research estimates the digital transformation consulting market at over $23B. This is nearly 20% of all consulting services offered. In addition, our interview found 78% of respondents are offering digital transformation services, up from 74% in 2016. This could be an early indicator of digital transformation in consulting.
This year we’re determined to learn if there is substance behind the buzz. Are consulting firms adopting the digital approach they espouse to clients?
With a few years of digital transformation experiences under our collective belts, we’ve have been able to assess results. HBR found that digital leaders outperform laggards significantly. What separated leaders was their ability to use data in customer experience, product design, service delivery and employee performance.
Further Bain has found that companies effectively using data are twice as likely to outperform competition. Perhaps that is the entire reason to digitally transform? So that you are effectively collecting and using your knowledge.
Early Findings – Digital Transformation in Consulting Challenges
In last year’s report, senior management buy-in was a significant challenge to a firm’s ability to adopt a digital process. It rated as the second highest challenge, behind lack of technology systems.
This year, the lowest rated challenge to going digital was senior management buy-in. It’s seems clear that firm leadership has recognized that 1) digital transformation is an important business opportunity and 2) they need to be practicing what they consult to be a credible service provider. However, many consultants are still struggling to understand how this applies to their own business. A few consultants and new entrants are looking to the future and have started to test new models.
We know that most firms offer transformation services. We now know senior management has made it clear that adopting a digital approach is important. But has the rest of the organization followed suit? According to our early findings the answer is not yet. The biggest changes firms are making are still surface level. Changes to value proposition and consulting portfolio led the way.
Early Findings – Digital Transformation in Consulting Maturity
Further, 63% of respondents stated that digital capabilities are only somewhat ingrained in company culture or not at all.
When asked to rate their firm’s digital maturity 58% indicated they were only somewhat digital or not at all.
If we were to assess the consulting industry’s performance on the criteria that HBR outlined for digital leaders, would it pass? Do consulting firms use digital platforms for customer experience, product design, service delivery and employee performance?
In the full analysis of Digital Transformation in Consulting we’ll cover these topics and more. We’ve assessed how digital capabilities are impacting the ability to win more business, which employee skills are valued, and how data is used and stored. Please look for the full report coming the 2nd week in October or download last year’s report below.