Corporations are spending an increasing amount of their time and resources on management consulting. According to a recent report by Source Global Research, U.S companies spent $54.7 billion on consulting in 2015, a 7.7% increase from the year prior and up from $44 billion 2012! While the prospects of sustained growth in 2016 and beyond are dependent on factors like the election and the broader economy, the increasing attention on digital transformation is likely to push those figures higher. While executives are pacing ahead with this digital adoption, the consultants they employ are likely still in the early stages of fully realizing the benefits of going digital. Even though the majority of consultants offer digital transformation services to their clients, few of them have adopted it themselves. This digital shift and increase in spending should have executives asking some pointed questions to their consultants to ensure they are getting the most from their investment. To help with the effort, the 9Lenses team, who work with consultants regularly to digitally transform their operations, has assembled a list of questions executives should be asking consultants to hold each party accountable.
7 Questions Executives Should be Asking Consultants
1. How long until we start seeing value?
One of the biggest complaints we hear executives voice about consultants is that it takes 10-12 weeks for someone to speak with a bunch of employees, prepare a presentation and then communicate back issues already known to the executive team. Our own analysis found that discovery time alone can take 2-4 weeks while consultants spend an additional 20+ hours simply aggregating the data in preparation for a presentation.
Executives should know there is a better way to assess business problems and opportunities. Consultants that take a digital approach can reduce time that is spent on discovery and non-value adding activities like aggregating data. Consultants using 9Lenses are spending less than 2 weeks from initial launch to presenting data to the client with real-time analytics and easy digitization and customization of consulting frameworks. Executives should be challenging their consulting partners to reduce the time it takes to identify opportunities and trouble spots so that they can see value on day one.
2. Will you provide opportunities for me to collaborate with my team during the assessment process?
A digital environment can enable opportunities for collaboration that traditional methods like powerpoint and excel do not afford. Is your team collaborating with your consultants as questions are being written and as data comes in? Real-time data analysis allows your team to offer questions and seek context before that big presentation. Then, when the issues have been worked out, that one day workshop becomes more about problem solving and less about clarification of data points. Make sure your consultants are offering these opportunities so that we when you have them in the office, your time and money are spent on getting to a solution.
3. Is my data secure?
Executives often adhere to rigorous information security standards, ensuring that sensitive data is protected and that there is a traceable path for who can access that information. But are your consultants, who often have access to or own control of the same sensitive data following your standards of security? According to our ‘State of the Consulting Industry’ interview, an eye opening 29.81% of consultants’ client data is stored 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 or neglect. But, with the help of the right digital consulting tools, consultants can easily secure their firm’s intellectual property and client data.
4. Is my data transformative or merely digitized?
Digital transformation is taking hold as the major corporate initiative to position a company for success in the future. Executives should note an important distinction when working with consultants to digitally transform operations. There is a large difference between digitization, which is about taking manual processes or content and housing that in a digital environment and digital transformation which we define as changing the way processes, people, and technology work to create efficiencies, new sources of innovation and insight not readily available previously.
But don’t take our word for it, many of the leading consulting firms have established their own frameworks and process. Executives should familiarize themselves with available frameworks and come prepared to ask “Am I paying for digitization or digital transformation that will offer greater return for my business?”
5. Will you provide benchmarks in your assessment so we know how we are doing compared to our peers?
Your consultants will have a point of view but is it grounded in data? We’ve found the most sophisticated firms are benchmarking elements of their assessments, frameworks and maturity models so that the guidance they provide is based on data and provides a new level of insight to their clients. You know the old W. Edward Deming quote “Without data you’re just a person with an opinion.” Don’t settle in your consulting engagements, look for firms that ground their guidance in data and have demonstrated expertise by the strength of their benchmarks.
6. Are your solutions connected to past engagements or the advice your firm is giving to other areas of my business?
Too often consulting firms operate by functional area or don’t have methods for sharing the right data internally. Our research found that 56% of consultants have either ad hoc or no method for sharing assessments and data between teams. This can mean there is no traceable path of data between engagements or even between practices. Executives should wonder aloud if the advice they are getting is incremental or truly built on past knowledge of their organization. In addition, without connected guidance across the corporation, advice a consulting firm is giving the CMO could be odds with that which is provided to the CIO, for example. This would create internal strife and negate the anticipated benefits of an engagement. Executives should seek out digitally enabled firms that have the appropriate controls and visibility for data and guidance. We’re building a platform where consultants can create a holistic view of client data across geography and functional area. Imagine a unified view of all the assessments and advice firms are providing you?
7. Will you be following up after our engagement to ensure the work was done properly?
Does this sound familiar? Your consultant has spent weeks identifying issues they’ve found and leaves behind a monster powerpoint that your team has to decipher to develop a strategy. Or, you’ve just rolled out an CRM or ERP implementation, spent months in preparation, developing implementation teams and engaging a consultant with expertise only to realize that once the technology is launched you are on your own.
It’s doesn’t have to be this way, consultants with digital capabilities, like those 9Lenses provides, can build a sequence of digital interviews throughout an engagement from pre-implementation, to tiger team development, to post-implementation assessment. The data is all housed in the same platform so that you can compare data sets across populations and across time. The post-implementation assessment helps to build accountability for the success of the engagement and provides a window into where tweaks need to be made. Additionally, consultants can build these interviews into the cost of an engagement and with each deployment their costs to operate the software go down thereby passing the cost savings onto their executive clients.
Download our “7 Questions Executives Should Be Asking Consultants” infographic: