Digital transformation (DX) is a major challenge and opportunity for businesses. Even though executives are willing to apply digital transformation to the organization, in-house teams may not have the experience or time to achieve this objective. Digital Transformation Consultants can help the organization overcome the challenge by establishing a digital strategy and implementing digital technology across the enterprise.
What is Digital Transformation Consulting?
Digital Transformation Consultancy is a service that helps companies formulate their digital transformation strategy and implement it to enhance their performance through digital technologies. Digital Transformation Consultants (DTC) analyze the company’s tech infrastructure, processes, people and organization to both strengthen the organization’s short-term performance and maintain sustainable long-term improvement.
DTCs generally provide services in these broad areas:
- Formulating a digital transformation strategy and roadmap including both short term, high ROI initiatives (i.e. low-hanging fruits) and long term initiatives
- Implementing digital technologies to diminish the manual workload of organizations to
- reduce costs
- Increasing process effectiveness (e.g. reduced error rates)
- increase employee satisfaction by reducing dull work
- enabling faster responses to clients
- Building digital products to allow the company to expand into new businesses or new channels
- Outlining necessary changes to people and processes to enable and sustain the digital transformation
Why is Digital Transformation Consulting important now?
The world is shifting through digitization and technology and competition is getting more fierce. However, most organizations are lacking either awareness, expertise or the manpower to complete their digital transformation. Therefore 70% of digital transformations fail, most often due to resistance from employees.
Digital transformation consulting services provide knowledge and experience to businesses so that they ensure that digital technologies and strategies of the company are connected and risk of failure is minimized.
McKinsey, arguably the most prestigious management consulting company, almost never references its competition on its material. So we were surprised to see that McKinsey referenced a Forrester study on digital transformation consultants. The digital transformation market is so large and attractive that even the most prestigious consultants are ready to provide links to research covering their competitors while communicating their lead in this market.
How do consultants add value to digital transformation projects?
Consultants add value via their additional manpower, global expertise from working with hundreds of companies on similar topics and outsider perspective. This is also the case in digital transformation.
It is expensive and difficult to attract digital experts to your company. Consulting companies have been improving their digital workforce via acquisitions. Expertise is a valuable asset in most digital transformation projects. Consultants should have seen processes being automated with various technologies through their work in many client engagements.
For example, they should be able to point you to the most effective automation solution for your accounts payable automation. Since accounts payable (AP) is a common process for companies of all industries, consultants can have experience from implementing AP automation to tens of organizations and you could learn from their experience. Another broadly applicable area is process mining and task mining. These help organizations understand their processes in a detailed manner using log files and screen capture. Therefore organizations can identify bottlenecks and improve their business processes.
Outsider’s perspective is crucial in organization related projects. And since the organization is a key part of the digital transformation, consultants can add value with their outsider’s perspective.
Finally, companies tend to be afraid of consultants sharing their strategy and secrets with competitors as consultants share their experiences within their consulting organization. While this is a concern for strategic projects, it should not be a concern with digital transformation projects. All companies are doing their best to digitize and automate their processes, therefore, in most cases, there are not many company-specific secrets involved in these projects.
How to choose a Digital Transformation implementation partner?
The success of the project will be mostly dependent on choosing the right digital transformation consultant. Here are a few critical criteria for evaluating digital transformation implementation partners. We sorted them from higher to lower priority:
- Since consultants add value with their expertise, it is important to make sure that they have the relevant expertise for your project. For example, a digital transformation company that focuses on back-office automation may not be a good fit for your company if your priority is to boost digital sales. Companies need to analyze consultants’ previous projects to see that they have the right
- Technical expertise
- Process-specific expertise
- Industry-specific expertise
- Though the expertise of the consulting company is important, individual consultants are the ones that get the job done. Companies should review CVs of individual consultants to ensure that these individuals have the necessary expertise.
- Finally, the best consultants are the ones that can objectively assess the technologies that will be implemented. Companies need to understand that consultants that work as part of a tech vendor will be biased towards that vendor’s solutions
What are example case studies from digital transformation consulting companies?
Chipotle is an American restaurant chain that serves Mexican food. A slowdown in demand made the company realize that they don’t have a one-to-one relationship with customers and this was preventing them to deliver personalized customer journeys.
Chipotle needed a way to create relationships with customers that’s why they partnered with a digital transformation consulting company, PwC, to bring a new approach to the food restaurant chain. They embraced PwC’s Business-Expertise-Technology (BXT) framework. PwC provided customized change management playbook and training execution programs to employees and launched a customer loyalty program. PwC consultants defined the design and tech requirements, integrated the solutions with the emphasis of securely managing customers’ private data.
With the help of PwC’s consultancy, Chipotle experienced
- 99% increase in digital sales (Q2 2019 YOY)
- 1 Million enrolments in Chipotle Rewards within the first week
Wipro’s client is a leading financial service provider that attempted to accelerate its performance in several key areas. They intended to use advanced technology to meet the needs of the evolving investment market, however, their outdated tech infrastructure did not integrate well with internal or external applications. Along with their old infrastructure, manual processes also prevented them from being an agile company.
They partnered with Wipro Digital which led the project from design to implementation and provided ongoing technical expertise. Wipro Digital designed a scalable infrastructure that could handle multiple app integrations, boost its agility, and enable the firm to offer new microservices in response to market demands. Wipro also implemented Pivotal Cloud Foundry software and migrated data to the cloud with zero downtime for the investment firm or its 12 million brokerage clients. Pivotal offered ongoing managed services, meeting the financial services company’s objective to focus on developing new products and services rather than managing its infrastructure.
With this new infrastructure and digital technologies, the client reduced the time-to-market significantly and became capable of deploying a new application in 3 to 4 months.
What are digital transformation strategy companies?
Digital transformation consulting landscape is crowded and vendors offer different value propositions. AiMultiple have examined digital transformation consulting landscape in another article and highlighted consulting companies for different industries. If you are looking for a DX consulting company, you can also check our data-driven, sortable vendor list.