Digital Disruption and Impact on Consulting

"Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how it operates and delivers value to customers. It's also a cultural change that requires organizations to challenge the status quo continually." – The Enterprise Project.

Digital is disrupting and transforming multiple industries, including the consulting industry. It has reduced the gap between traditional consulting work and technology work. In this digital era, when technology is at the heart of innovation and performance improvement, consulting firms deliver much more technology work and extend their breadth of services. They are now seen working with clients to design and develop apps, prototypes, and intelligent systems, among other areas.

Businesses are fast-changing and adapting to the new demands and expectations, and so is the need to keep the consulting industry aligned.

Companies, who have not changed and adopted, have lost to their peers over time. Factors influencing this shift include widespread access to technology; increasing customer expectations, driven by the native digital experiences' customers can and do access daily; increased competition from digitally native companies that move quickly to meet client needs.

Professional services firms are evolving the consulting model by building branded digital solutions that disrupt the traditional consulting model. By embedding software and technology-based analytics and tools directly into client processes and providing ongoing engagement outside the standard project-based model, thereby changing it from being a project on a Gantt chart to a solution that persists (via a subscription) beyond the "engagement."

Digital transformation emerged as a significant growth driver across professional services firms, indicated by the widespread establishment of offerings and even standalone units to meet market demand as evidenced by acquisitions, alliances, and engagements across sectors and service capabilities.

Leading consulting firms have created a global network of digital studios, innovation labs, Greenhouse facilities to co-develop digital solutions with clients. These locations allow clients to ideate, innovate, and tackle their most significant challenges through interactive workshops in specially designed environments.

Strategy firms that derive a large portion of revenue from creative, bespoke advisory work invest in differentiated tools and develop credibility in technology and digital strategy.

Digital Platforms

Historically consulting has depended upon in-person output, largely based on data analysis and storytelling on client business problems, customized to the client's environment, mainly in the form of slides. These static outputs are often outdated within weeks of their distribution and are no longer needed. Digital reports are the new norm since they offer faster, better, and more profound insights at a fraction of the cost and time taken by specialized workers.

The data gathering and analysis process earlier were also manual and mundane. Data services have now got democratized and are readily available. AI tools and services have transformed our analysis and decision-making capabilities. Digital Platforms have facilitated easy collaboration and have brought everyone together.

Digital platforms allow consulting organizations to provide real-time insights based on data analytics that their clients can leverage even after the engagements. These platforms help consulting organizations' outputs be positioned as flexible, user-friendly, and persistent assets instead of theoretical or paper deliverables.

Designing New Processes

As digital technologies disrupt existing services and operating models, consulting firms are developing technology-embedded services to solve business problems across sales, marketing, finance, and SCM leveraging technology. Consulting firms are working with top global organizations by understanding their needs better by designing processes to leverage customer focus of design thinking and agile design. Long-term consulting engagements are being replaced with short-term, outcome-oriented, iterative engagements, providing regular incremental benefit realization and ultimately leading to products, programs, and strategies impacting the client's business.

Cross-Industry Skills

Cross-industry innovation or best practices are being referred to more often vis-à-vis the earlier focus on only sector-specific practices. Increased realization and focus on user experience, and digital technologies have helped leverage cross-industry models of innovation and best practices.

Consulting organizations are exploring successful models or best practices across industries that can be leveraged, focusing on user experience, digital technologies such as cloud, artificial intelligence, big data, and others for their clients. Data democratization, big data coupled with cloud computing, and AI is helping consulting organizations undertake a more quantitative approach in a shorter time.

For consulting organizations, the opportunity is to leverage data from multiple sources such as social, IOT, 3rd party data sets, customer experience data, web analytics, and the qualitative inputs to make more effective output or recommendations for their clients.

Digital transformation isn't a new imperative for business leaders; however, the current COVID-19 crisis has magnified it with virtual meetings and digital platforms as the new norm. More changes may be expected as the economic and human situation evolves.

Organizations want to enhance their speed, accuracy, and data-driven decision-making capabilities. With matured scaled-up delivery models, virtualization, global exposure, and deep technology skills, global delivery services have been a game-changer in this area. Global delivery services in collaboration with innovation labs and digital studios have been instrumental in giving a unique experience to users.

According to Forrester Research's Q4 2020 Wave report on digital business transformation services, EY was called out for its sharp focus on identifying and delivering measurable business outcomes.

Digital transformation spending continues to rise, and a clear focus on things that benefit their customers are the clear differentiators. At Strategy and Transactions (SaT) within EY GDS, teams virtually deploy tools, frameworks, and analytics-based platforms allowing experts within Global Delivery Services centers to be part of a global delivery model executing client engagements. We have developed frameworks and assets which enable us to service end-to-end transformation for our clients. We have served clients across industries with a diverse pool of professionals with strong expertise in the digital domain.