The Digitization of Consulting — The Advantages Are Many

I have recently been investigating the changes that are playing out in the world of consulting. Having been a consultant most of my career, ten of those as a partner in a large firm, I have found myself questioning what its future will look like.

This questioning came about partly because I am now in the growing market of boutique consultants — which forces one to look at how one operates differently, partly because one of my roles is working with a start-up to actively build an Artificial Intelligence (AI) approach to how consulting is delivered, and partly because it just feels like post-COVID clients will be more open — perhaps more inclined — to think innovatively about how they source their external help.

So, what have I learnt?

I have been somewhat surprised, enlightened, and excited by the rate at which the value chain for consulting is being digitized. The diagram below is my attempt at reconstructing the value chain to help visualize this:

This digitization is shifting value up-stream and down-stream from traditional project-based delivery and revenue in three main ways:

1. Accelerated growth in digital solutions
   
   Enabled through digital technology, traditional IP in the form of the human expert and ‘consulting’ methodologies are being productized into solutions that can be self-served by clients. QUID, Kensho, and SparkBeyond are three simple examples of where digital and AI capabilities are performing market research and business analyst tasks that a junior consultant would have performed in the past.
2. The rise of IPaaS
   
   Emerging platforms like Miro and upBOARD, as well as content plays like TechTarget, are offering consulting know-how in the form of IP as a Service (IPaaS). Clients can access consulting methods, frameworks and content-based know-how to manage their own projects. Miro, for example, will provide you with a business canvas template, instructions on how to use it and a completed sample for demonstrating this know-how.
3. The proliferation of marketplace platforms
   
   Digital marketplaces have taken old-school freelance contracting to an organized network of searchable and qualified expertise. These networks come in the form of expert procurement platforms like Expert360, Inex One, LeadMD, or emerging plays from AWS IQ and Linkedin Profinder. They also come in the form of crowd sourcing platforms like Kaggle and InnoCentive. The nature of the expertise spans from content niches — Simplus, for example, is an expert consultancy focused purely on Order to Cash — to solution niches — Newpath is a consultancy focused purely on how to embed and leverage BI tools. Some of these niche consultants have even packaged up their services for an upfront known fee, removing the need for arduous proposal processes and the time delays that usually ensues. When COVID sent us all into a global lockdown, the access to the services that are available on these platforms came more into their own. Post-COVID, they are forecast to increase in demand from clients looking for tailored expertise, efficient procurement, a more cost-effective engagement, or all of the above.

These three trends — digital solutions, IPaaS, and micro consulting — represent the largest shifts at play in the digitization of consulting. In fact, there is not one part of the value chain in consulting where a digital solution, or digital marketplace, or digital service provision, that does not exist as an option for clients to leverage.

In fact, there is not one part of the value chain in consulting where a digital solution, or digital marketplace, or digital service provision, that does not exist as an option for clients to leverage.

There are traditional players like McKinsey and Accenture who have been building out their own solutions marketplaces. There are independent consultants building out their disruptive platforms and major technology players stepping into the fray to provide their digitized equivalents. As such, the playing field of new entrants is expanding – even amidst ongoing acquisition by the traditional consulting housed designed to shore up and protect their businesses from the changing environment.

What is exciting is that this evolution — or, depending on how you look at it, this disruption — is still in the early stages of its journey. I truly believe we have much more ahead of us in the number of solutions and providers in the market, but also the innovation still to come, particularly as AI starts to take a stronger foothold (more on this topic in my next blog).

What exactly does this mean for clients?

Rather than outsourcing the whole need, issue or project to a team of consultants, you have the option to adopt a more flexible, modular approach to where and how you get your advice delivered. This can be part solution, part expert, and part self-service IP – aka, Consulting-as-a-Service (CaaS).

Rather than outsourcing the whole need, issue or project to a team of consultants, you have the option to adopt a more flexible, modular approach to where and how you get your advice delivered.

So, why would you do it?

1. Ever had that feeling of “I am paying for methods and know-how that likely already exists”, or “your team are learning on the job more than I am learning from your team”, or “you have some of the required experience, but its not really a best fit, not really”? These feelings can be mitigated by leveraging your CaaS options more wisely to maximise value for outcome.
2. It can provide you access to world leading expertise and experience, rather than the experience that is localised to your city or state. It can provide you as well expertise that is in high demand and therefore hard to employ quickly — skills in Cyber, Data Science, Digital, for example. COVID has taught us that remote work is not a barrier, instead, it can remove barriers in accessing the right expertise.
3. Finally, used well, CaaS can become a true capability development opportunity for your teams — an ongoing enabler for your organization that is highly cost effective. This is particularly the case when you look at Solutions and IPaaS that are readily available for you to adopt and use in an ongoing capacity.

So, if you haven’t yet explored this CaaS world, here is a good way to start:

1. Make yourself aware of the options that are out there, some of which I have outlined in this blog. Leverage your in-house strategic procurement functions to provide this knowledge across the organization in an ongoing capacity, with revised policies that allow you to embrace them.
2. Find a project where you can explore the value of these new service options. This can be done by conducting a market analysis study, developing a go-to-market plan, reviewing a technical architecture and/or designing a customer journey map. All of these are great examples for where Solutions, IPaaS and expert marketplaces can bring value.
3. For solutions and IPaaS in particular, find those that can be useful in an ongoing fashion across multiple business functions, and run a team trial — your strategy team, finance team, risk team or customer experience team could be good trial ground.

Let’s face it, with fairly significant capability shifts in digitization, AI, and Cyber just to name just a few, and with continual technological innovations and a growing pool of new disruptors, getting great advice, expertise, and insight is arguably more valuable than ever. Thankfully, your options to do this now exist, and they are more cost-effective than ever.