Digital will change everything. Even the business of consulting

The MCA’s Think Tank is soon to publish the results of its latest project on the digital economy. Here, Think Tank Director, Paul Connolly, explores what it means for clients – and for the consultancies that work with them.

Digital is everywhere. Everyone is talking about it.

So what is it?

Some see Digital as simply an intensification of well established IT and technology themes. New technologies are just new mechanisms that can help deliver traditional business goals in a different way – like railways or the Penny Post were in the past. The key is to fit them into coherent business strategies.

But other commentators see Digital as far more wide-ranging. Describing it in abstract, even mystical terms, for them Digital represents nothing less than the wholesale transformation of global capitalism.

In preparation for the MCA Think Tank Digital project, I’ve had the privilege of talking with Digital specialists in our industry. They have a shrewd appreciation of the topic. They recognise that Digital is utterly transformational. They know it will change everything. But unlike some of the Digital hucksters in the blogosphere, they are not pedalling snake oil. They want to demystify Digital, translating its radical potential into the language of opportunity, efficiency and profit that business leaders understand.

And they do need to understand it. Digital is serious business. The rapid proliferation of mobile technologies is creating new expectations among consumers about how they can access products and services. These technologies shorten the “distance” between producers and consumers, calling parts of the traditional supply chain into question. Producers and retailers who do not rise to these challenges will struggle.

Yet the opportunities are enormous. Longstanding paradigms, like highly federated enterprises, with specialised centres, loosely combining for specific purposes, or multilateral business networks that promote collective value, are now increasingly possible through Digital. Telecoms, TV, internet: Digital means that these now operate through identical networks, opening up unprecedented opportunities for market diversification. Using Big Data analytics, retailers can move beyond understanding customers at the point of purchase into a fuller appreciation of their wider lifestyles and desires. They can then tailor products, understand trends, and even reinvent the services and consumption experiences they offer using increasingly agile systems.

Agility is the name of the game. Business’s ability to shift direction and respond to consumer desires need not be hamstrung in the future by long-term IT contracts that are dated the moment they are signed. Instead, they will develop short-term relationships and highly adaptable, even discardable, solutions. Indeed, tomorrow’s businesses won’t necessarily have rigid long-term strategies themselves. Their business life-cycle will comprise the threading together of a series of short-term moves.

All very exciting. But also threatening. A fast-moving environment creates value fast and destroys it fast. Those who don’t keep up will go to the wall. Look at Nokia. Look even at the pressure Apple is under from Samsung. Today’s business insurgents may be tomorrow’s dinosaurs. Government wrestles with how to turn the latest small start up into the next Apple or Facebook. Yet perhaps the current reality is one of restlessness. Entrepreneurs may have to accept the limited shelf-life of their latest solutions and move quickly onto the next one.

How do managers of traditional industries handle the bewildering complexity of change when even those in the new industries admit to constant future shock? Can they live with the burden of uncertainty? And can they cope with some of Digital’s inherent problems, like data storage and security, especially when a whizz-kid computer hacker probably understands a corporation’s systems better than the corporation does?

The consulting experts I have been dealing with are getting quickly to grips with these challenges themselves. They are working through how Digital affects our own industry. Conceptions of value clearly must change, as the dynamics of product, sale and consumption converge. But consultants may also need to change how they go to market. Most basically, if clients are preoccupied by Digital and need to understand it, consulting firms will need an adequate supply of suitable experts. This will raise questions about the recruitment, retention and deployment of those skills. But consultants may need to reassess how consulting is done. Programme managers will have to be very light on their feet to respond to the real-time data Digital systems can now bring them. Process improvement specialists may need to adapt to competition from automated sites that allow firms to load up process descriptions and receive off-the-peg advice. If businesses are moving fast from tactical opportunity to tactical opportunity, swiftly and cheaply, this could transform strategy consulting and business planning. It could also impact the duration of business engagements, with implications for how consultants manage client relationships.

MCA firms are simultaneously applying the learning they glean from transforming the business of consulting to assist clients transform their operations. They are supporting businesses in radically changing how they interpret customer needs and how they define their service offerings. As such, MCA consultants are doing what they have always done. They are helping businesses in practical terms. They are explaining what all this stuff means for clients, how it can benefit them, in comprehensible and concrete terms.

In fact, I’m hoping they’ll explain it to me. This article has taken a while to type. The Think Tank’s report will take me ages to pull together. But surely an agile Digital solution will save me labour, be created cheaply in a matter of minutes, and reach an audience of millions instantaneously.

I live in hope.

The MCA Think Tank will publish its findings on Digital in the New Year. If you have any thoughts on this topic, please don’t hesitate to contact Paul Connolly, Director of the MCA Think Tank.