Big consulting not very good at creating digital products

26 November 2019 5 min. read
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Big consulting is as broken as the firms it tries to fix. At heart, consultants are one trick ponies, recycling what they have done for decades: improving efficiency, typically in the form of trimming staff, and taking a cut of the savings. More recently, they have latched on to the idea of “digital transformation”, which is unfortunate for them, as they are not very good at creating digital products.

In the US, Hertz has filed a lawsuit against Accenture alleging that it failed to “deliver the website and apps for which it was so generously paid” in a timely fashion. Hertz wants its money back – all $32 million. So not only are they failing to deliver, they are also charging ambitious amounts for very poor results.

Disputes like this are not uncommon in the privacy of the client-consultancy relationship. What is unusual is that Hertz has opted to very publicly take the issue to court – and demanding a trial by jury. It seems that this may not be just about the money: it looks a lot like administering a deliberate reputational kicking. Accenture is, of course, denying the allegations, and counter filing for unpaid invoices.

When the consulting industry emerged 60 years ago, it was fit for purpose. That was the era of production lines, when businesses were removed from clients, and customers were broadcast at, rather than engaged with.

Big consulting not very good at creating digital products

Consultancies haven’t changed the frameworks for the digital era, and there is one additional wrinkle: big-firms have tended to leave implementation of their plans to clients – not least because they can avoid the blame if it goes wrong. Unfortunately for them, the commodification of digital capabilities means they are now in a position where they can (or, more likely, could not refuse to) implement – and it has become pretty clear they can’t.

Can big consultancies build digital products?

Their response has not been to change themselves, but to bolt on non-native capabilities, squeezing them in to traditional processes, and co-opting the language of digital. We live in a digital age. Consumers are neither forgiving, nor fooled by bad products. Big consultancies cannot build digital products. They simply don’t get it. Can this ever change?

For the answer to be “yes”, several things need to happen. First, consultancies need to drop the obsession with efficiency. They have always sought marginal gains by making things run “better”; generally, this means trowelling Maybelline onto the pig of an existing process or service. Alternatively, they simply cut the number of people while maintaining or increasing targets. Or, often, both.

Second, they need to stop being risk averse. Change needs to be profound, but their production mindset is so far removed from the consumer that taking a risk to raise standards and transform processes rarely happens. It does not need to be large-scale risk, but increasing risk-appetite, and forgiveness, across the business will have an impact.

Third, the top-down style that dominated before the advent of the knowledge economy needs to be done away with. We are no longer dealing with unskilled workers; employees hold valuable information, so they need to be a part of the process. Decisions made from the top-down rarely work as well as those conceived of on the ground up.

“The consultancy model is one-size-fits-all has been around for over half a century. Consultancies haven’t changed the frameworks for the digital era.”
– Matt Williams, Made by Many

Fourth, they need to acknowledge that the passive consumer is dead. There is now a constant feedback loop, which didn’t exist before. If change does not work, you will know about it. It is not simply about being set up to respond, it is about testing and learning, and then reinvesting that learning in to the next software release. Small risks, big gains.

Finally, they must understand that outsourcing product development will produce a worse result than keeping designers and developers in direct contact with users. It is hardly a competitive advantage to implement the same off-the-shelf software as everyone else.

Fired for hiring a consultant?

The consultancy model is one-size-fits-all, which ends up giving everyone the same answers they would have been given over half a century ago. They need to realise that every company, big or small, is a software company, regardless of what they purport to do. British Airways’ massive software outage a few years ago – thanks to outsourcing their IT functions – laid bare the truth in a costly example: BA is a software company that flies planes, not an airline for which IT is a supporting consideration.

So far, big consultancies have been able to cite commercial sensitivity to obscure any actual outputs of their work. But now, they have to make products, and they can’t. For a long time, no one got fired for buying IBM, and that was true for the big consultancies too. But this time, someone might get fired for buying Accenture.

An article by Matt Williams, Director of Made by Many, a consulting firm with offices in London and Amsterdam.