Seven principles to turn consulting firms into digital transformers

18 July 2016 Consultancy.uk

In the last few years there have been several quantitative and qualitative studies which have highlighted that if organisations want to sustain growth through a competitive edge, then they need to embrace digital strategies and embed digitisation throughout their operations. The need to transform is apparent across all industry segments – including professional services.

Digital technology has altered, and will continue to alter, the landscapes of business, education, entertainment, and government. The past few years have seen fast change, from the introduction of industry-wide mega trends such as Internet of Things, robotics, Industry 4.0 and virtual reality, to the rise of ‘startups’ and unicorns that have disrupted entire industries. For example, Uber in the transport world or Airbnb and Booking.com in the accommodation space.

According to research firm IDC, this trend is set to accelerate in the coming years. In fact, IDC mentions “Digital technologies and the new business models and strategies that they fuel will continue to significantly impact most organisations at a rising level of intensity”.

Despite the numerous benefits of going digital that are now up for the grabs, IDC found – in a new maturity study across 400+ European organisations – that while most enterprises use digital technologies, few actually reap the full potential. Less than 20 percent of the businesses reviewed can call themselves a ‘digital disruptor’ (companies that are aggressive in the use of new digital technologies and business models to remake and create new markets) or a ‘digital transformer’ (organisations that deliver digitally enabled products, and experiences). Most European organisations are either what IDC describes as ‘digital explorers’ or ‘digital players’ – players that acknowledge the need or are at the early stage of transforming the business digitally. However, they face the issue that transformation initiatives focus on optimising the existing business processes and not on truly developing digital products or evolving the company’s business model.

Digital maturity of European organisations

“Being a digital transformer means adopting technological opportunities whole-heartedly. It involves seeing technology as something profound, something synergising and something more than just a number of disparate business tools that are in place to improve basic business functions,” says Fergus Gilmore, Managing Director of Deltek in the UK. 

In the consulting industry, says Gilmore, digital transformers are firms that see technology as a catalyst for bringing their people, processes, customers and ambitions together. “They adopt it as a mechanism for compounding growth and adding value for customers through new and innovative products, services and ideas.” 

As a result, these digital transformers – or the ‘Digirati’ as they are also known – are pulling away from their competitors. “They have more agile business processes, well-connected departments, improved collaboration, stronger analytical capabilities and better insight for more accurate reporting that simply puts them out in front.” 

Research found that companies that understand the value of digital transformation (Digirati) were on average 26 percent more profitable than their competitors, they were also 50 percent more likely to have lower employee turnover*. For consulting firms that are trailing the digital pack, or those that are seeking to step up their digitisation efforts, Deltek has drafted a set of principles that can help operations partners of consultancies adopt digital into their own ranks:

1. Put clients at the centre of your strategy – Drive home how digital transformation can benefit your customer's businesses as well as your own, then introduce new products and services as a result. The added value you provide will show them you're dedicated to innovation and progress.

2. Invest in digital skills – 77 percent of firms say a lack of internal knowledge prevents them from becoming digital transformers. Invest in a digitally literate team and task them to drive the change you desire.

Seven principles to turn consulting firms into digital transformers

3. Digitalise your entire firm – It's true that digital transformation is usually led from the top, but the responsibility cannot just lie with the CIO. To roll out a successful digital plan, the entire company should be on board so staff at all levels are willing to learn, develop and improve. 

4. Empower employees – speed up and improve decision making by providing relevant, real-time data to employees when they need it, through whichever device they choose.

5. Implement the right business platform – Make the most of your people's time and billable resources while minimising administrative tasks such as time recording, reporting and invoicing with a robust enterprise resource planning system, for instance.

6. Use your data – Measure key performance indicators to set objectives and establish if you are heading in the right direction. Analytics will pinpoint lucrative sales opportunities and historical information will help you spot trends and plan for the future.

7. Build 'digital' into your strategy – Technology is no longer a means to an end. It should be ingrained and intertwined into a firm's strategy and vision right at the point of design. That way it will shape and drive your firm's culture, relationships and services. 

Gilmore concludes: “Eighty seven percent of companies believe adopting a modern approach to digitalisation holds the key to gaining a competitive edge. If you're one of them, take action: capitalise on the future and guarantee your consultancy's success by adopting a pioneering spirit in the digital present. It's never too late to begin.” 

More information about the principles can be found in the report ‘Digital transformation in the professional services industry’. 

* World Economic Forum Report, Digital Transformation of Industries.

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Accenture's push into the creative sector is an identity crisis

18 April 2019 Consultancy.uk

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.