Matt Candy, European Leader and Managing Partner for IBM Interactive Experience, describes 2014 as a very successful year of transformation and change for IBM. “Digital is a fascinating space for consultants to be in,” he argues. “Obviously consulting firms with a background in technology and systems integration have great Digital pedigree. But if Digital is collapsing boundaries for our clients, it’s doing so for consultants too. We have many of the capabilities that others advising on Digital, like advertising and marketing firms, need. But just as they need to understand Digital in a strategic sense, so we also need to be able to match the inventiveness of the boutiques and new insurgents in developing new products, like mobile apps.”
Matt suggests that IBM are doing this well. “We’re using our scale to our advantage, allowing us to invest in Digital capabilities, restructure our offerings and look to do things differently. This entails a lot of reskilling. The changes in our markets, after all, are very substantial. For example initiatives like SWIFT will transform banking.
“But we’re also having to address the fact that smaller, new Digital entities can often react to developments faster and adapt themselves more quickly. Consulting is an externally focused business, concentrated (rightly) on client needs. As result, we’re all moving towards Digital, as it is plainly top of mind for CEOs. However, this external focus can sometimes mean there’s a danger of missing tricks in the transformation of ourselves.
“The creation of specific Digital capabilities in IBM – as well as in other consultancies – minimises that risk.” Matt thinks that all businesses working in B2B environments need to follow consulting’s lead here. “B2C firms have an immediate Digital challenge driven by customers wanting to access products and experience new ways of consuming them on their smartphones. The Internet of Things is all about this new sort of value. But increasingly B2B businesses are going to have to improve their offers digitally, for example increasing their social media presence. In the Digital Age the distinction between B2B and B2C is dead.”
Matt notes Digital consulting growth in areas such as financial services, retail banking in particular, and in retail. “The utilities are behind the curve and need to catch up. The liberalisation of water may drive some changes.” The UK is a very significant market for IBM in Digital advisory, but also Germany, the Nordic countries, and Italy (especially for analytics). However, Matt has also noted slowdowns in Central and Eastern Europe.
“The growth potential of Digital is enormous. But it’s easier for new businesses to exploit it. Things like Uber and Nest have a Digital culture. They are Digital throughout. More seasoned businesses need to avoid simply grafting Digital onto their front end and customer-facing elements. This approach can be effective, but only for a limited period. It falls well short of the creation of a Digital culture within a business. When you think of the number of new employees coming into the workplace, bringing Digital expectations from their wider lives, superficial change won’t be enough. And when you think of the number of people in work whose skillsets are not yet full digitally aligned, then both the potential for transformation and the transformation challenge are enormous.
“Indeed the next wave of Digital transformation may be about harnessing and changing the relationship of the employee to the enterprise through Digital.” Matt suggests that there are models for traditional businesses to follow in wholesale Digital reinvention. “Lego is the most frequently cited example of an old business that has reinvigorated itself by understanding Digital’s new cultural norms without losing sight of – in fact strengthening – its brand differentiators.”