This post was originally published on February 11, 2021, and last updated on April 3, 2023.
The world of consulting is often associated with truckloads of jargon. Similarly, the world of technology is no stranger to its own stream of techspeak.
And when the two worlds collide, they can often make simple concepts appear arcane.
Today, let’s simplify one such concept – digital transformation consulting.
Digital Transformation Consultancy Defined
Digital transformation consulting helps businesses create a more competitive organization by guiding the adoption of digital products, platforms, and processes.
The best way to understand digital transformation is to not think of it as a separate phenomenon or discipline from the core business models, services, operations, or strategies. It’s simply a phrase used by the industry to define a typical organization’s efforts to adapt to rapidly changing digital technologies.
Seeking a digital transformation consultancy is driven by two primary business instincts – fear of being obsolete and the desire to outcompete. Digital transformation consulting can help C-Suite professionals like CEOs, COOs, and CTOs unlock massive value by advising and implementing them on incorporating technological change to meet their current and future business needs.
What Are the Four Areas of Digital Transformation Consulting?
1. Digital Process Transformation
Process transformation means creating fundamental and radical changes in an organization’s internal processes in order to help them produce more efficient and innovative outcomes. It often requires a switch from manual to digital and automated processes.
One of the most common examples of process transformation is automating routine workflows with project management tools. At Modus Create, we use Jira to align our departments to yearly OKRs.
2. Digital Business Model Transformation
Business model transformation means changing a part of a business by digitizing a product or a service, or otherwise implementing digital technology to help achieve the company’s goals.
For example, digitizing a product might look like creating a mobile app for direct engagement. Similarly, transitioning from in-person workshops to webinars is an example of digitizing a service.
Whereas process transformation focuses on tasks and workflows, business model transformation is broader and focuses on delivering value to customers.
3. Digital Domain Transformation
Domain transformation is a type of digital transformation consulting that helps businesses transform their industries or sectors from one to another by leveraging digital technologies. Sometimes this results in leveraging new technologies to redefine products and services and can even blur boundaries between whole industries. For example, pharmaceutical companies like Pfizer are increasingly creating digital apps that promote preventive care for better healthcare outcomes.
Domain transformation can unlock enormous value for companies. It can help them redefine their competitive positioning within and between industries and create opportunities for innovative new strategies and positioning.
4. Digital Culture / Organizational Transformation
Digital transformation consulting can help embed digital into a company’s cultural DNA by changing constituent behavior and implementing technological change in the broader company culture. By taking a whole-of-organization approach and emphasizing a digital-first attitude, cultural transformation can help radically improve ROI. A great example of cultural transformation is the growing popularity of the open source mindset among organizations.
What Do Digital Transformation Consultants Do?
Now that we know the four main areas of digital transformation consulting, what does an actual consulting engagement look like? What do digital transformation consultants do, and what are some of their best practices?
Most engagements start with an audit. The consultants will carry out an assessment to understand where your organization is, what it wishes to achieve, and how to do so.
For example, if an organization wants to upgrade its security infrastructure, the consultants would first investigate the state of the existing systems and then share recommendations in a report.
Strategy and Vision
After completing the audit, a digital transformation consultant can help you define your strategy and vision for change. This involves creating a compelling statement of what you want to achieve through digital and what strategies you will employ to get there.
It is important to make sure you align your digital transformation goals, objectives, and metrics with the broader strategic objectives, mission, culture, and core values of the organization. Once you have mapped out this vision and your strategy for achieving it, communicate that vision to all stakeholders, including management, key employees, third-party vendors, and possibly even investors.
Finally, they will help develop a roadmap to implement the strategy. The tactics outlined may include timelines, assigned responsibilities, resources, and necessary tasks for executing the strategy.
The next stage of your consulting engagement is where digital transformation consultants differ from traditional consultants.
While most traditional consulting engagements end with recommendations, effective digital transformation consultants possess the expertise to execute the recommendations. Digital consulting firms are not just analysts and consultants, but also:
- project managers
They are experts at rapidly deploying and scaling digital solutions for their clients.
Change management is the process of preparing, guiding, and supporting an organization and its employees through the changes made in the digital transformation process. Digital transformation can have a major impact on a firm’s culture, processes, and requirements, which can be unsettling to a company’s most important asset: its people.
The fanciest tools and technology in the world achieve nothing without people. That’s why in order to implement digital change effectively, a consultant will create a change plan that helps to address and manage the needs, concerns, and fears, as well as expectations of a firm’s employees. They will do so through various methods, including training, coaching, and providing additional support where necessary for a smooth transition.
The advantage of successful change management is that it helps employees become more accepting of digital transformation, more engaged with the process, and improve their performance as their goals become aligned with the broader company’s.
Measurement and Iteration
Finally, a digital transformation consultant will measure the success of the implementation and iterate as necessary to achieve the desired results. To measure outcomes, the consultants will collect data about the impact of digital solutions.
The data and metrics analyzed will help determine how to iterate and make adjustments to improve digital change and adaptation. Digital transformation doesn’t have a finish line. As your company gets better at embracing new products, platforms, and processes, it will strengthen its position in the market.
What Are Some Examples of Digital Transformation Consultancy?
Since 2000, 50% of Fortune 500 companies have either gone bankrupt, ceased to exist, or been acquired. Five of the world’s top 10 companies are less than 30 years old.
This would have been unfathomable in the 20th century when the size of an organization alone gave it long-term security. In the 21st century, every company carries the risk of quickly becoming obsolete.
While new companies backed by the latest technologies are disrupting traditional players, there are also enough examples of traditional organizations successfully reinventing themselves through digital transformation. Here are two examples of how our consultants worked with enterprises to reinvent their solutions:
Audi, a subsidiary of Volkswagen AG, had a high dependence on external service providers to create visuals for its products. Its 17 different car lines required new imagery and videos every few months, which would eat a significant part of Audi’s marketing budget.
Our consultants worked with Audi’s internal innovation center, Audi Business Innovation (ABI), and used Unreal Engine to develop a revolutionary new tool: Automotive Visualization Platform (AVP), which develops photorealistic 2D and 3D imagery with customizable camera angles and environments.
AVP cut marketing costs for Audi by 30% and reduced its time to market from weeks to hours. Previously, the Audi team had to fly to exotic locations and shoot with an on-set crew. Now, they can do it all in minutes. For example, this promo video of e-tron GT was created entirely on AVP.
2. Bright MLS
Bright’s customer support team was flooded with hundreds of calls from realtors every day, asking questions about the intricate process of publishing the listing. This was draining significant resources.
Bright’s team decided to revisit the user experience of their portal. Working alongside Bright’s team, we shadowed realtors as they went through the process of publishing a listing. Observing realtors at work allowed us to focus on what they actually do rather than what they say they do. Additionally, analytics revealed which fields were most valuable to realtors and consumers. Based on all the data points, Bright’s UX designers overhauled the experience of its listing portal.
The new intuitive UI allowed Bright’s users to figure out the process of listing themselves rather than contacting Bright’s customer support. Bright saved $600,000 by reducing customer support calls from successful digital transformation.
The Pros and Cons of Digital Transformation Consulting
Digital transformation consulting can bring major benefits to an organization. But there are also some challenges to take note of.
Digital transformation can help you become more agile and competitive in a fast-changing business landscape. And because of this rapid pace of change, working with an outside consultancy can help you quickly gain the expertise to implement the best practices and solutions to thrive in a digital environment. This can lead to increased productivity, efficiency, revenue, and ROI.
On the other hand, there are some challenges to hiring a digital transformation consultancy and implementing their solutions. For one, it can be costly, especially if you hire an experienced firm. And finding the right vendor can take up a lot of time.
Further, you may find a lot of internal friction in your organization. Employees tend to dislike change, so they may attempt to resist the solutions you are attempting to implement. And finally, there is the importance of making sure you are buttoned up with your consulting firm when it comes to compliance, security, and data privacy.
But overall, the benefits of working with a digital transformation consultant can be immense. It’s never been more important to stay ahead of the curve when it comes to managing and thriving in a competitive digital space.
Selecting the Right Digital Transformation Consulting Partner
Digital transformation includes a wide range of projects. Some are tech-heavy, while others might be more focused on processes or people.
The first step in selecting the right consultant is defining your challenge as specifically as you can. There are different consultancies that specialize in different areas of digital transformation, such as marketing, engineering, process, etc.
When evaluating a prospect, pay attention to the following indicators:
- Existing clients served by the firm – has the consultant previously led digital transformation at renowned companies?
- Official partnerships with leading technology companies – do top B2B tech companies trust the consultant to introduce their products?
- Background of the founders – do the founders have experience in technology and product development?
- Team specialization – does the team include engineers, designers, and product experts? Is it global or concentrated in one place?
- Client reviews on Clutch and employee reviews on Glassdoor – how have the clients rated the consultant? Are the employees happy with their work?
Digital transformation isn’t a destination, but a mindset. The right partner will not try to build dependencies. Instead, it will help you develop the expertise to manage your response to digital disruption.
This blog was last updated on March 31, 2023.
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