Digital transformation is complex and broad. A qualified digital consultant accompanies you and your company through implementing concrete measures and guiding you alongside the journey of digitalization.
Digital Consulting = Digital Competence + Management Consulting + Agile Methods. This is the formula you should look for when hiring a qualified digital consultant or a competent change manager. Find out more about the five most important aspects of digital transformation consulting.
In this article, Digital Leadership will go into the essential framework conditions of digital transformation consulting and provide examples of how digital consulting creates added value for you and your company.
Definition – what is digital transformation consulting?
Digital Consulting = Digital Competence + Management Consulting + Agile Methods
Digital transformation is a structural change that affects your company on many levels. This is why digital consulting goes well beyond traditional management consulting. The most important competencies for qualified digital consulting include:
- Business consulting on the company strategy, business model, organization, and leadership.
- Digital competence is based on an understanding of IT, knowledge of digital technologies and ecosystems, and the ability to bring them into the context of your business.
- Agile methodology competence which means working customer-centric in short iteration cycles. This allows you to achieve a fast time to market and ensures continuous improvement.
Perhaps the most significant difference between digital consulting and traditional consulting is the smooth transition from analysis to planning and implementation. This means that digital consulting can take place not only on the whiteboard or in the form of a PowerPoint presentation. New concepts are quickly tested for acceptance as prototypes and then continuously developed in direct contact with customers and users. This applies to new products as well as to internal systems and processes. The customer or user is actively involved in the product and service development process. This is why agile expertise is a mandatory consultant skill needed for digital transformation consulting.
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What are the advantages of digital transformation consulting?
The most difficult task in the course of digital transformation is to wholly grasp the interactions between (1) the development of digital technologies and platforms, (2) customer behavior in digital markets, and (3) your own company development. Qualified digital transformation consulting can help you put this puzzle together and gain a comprehensive view of your digital business development.
Independent digital transformation consulting is also beneficial as you, the entrepreneur or executive is part of the system and thus do not have an independent and distanced view of your company or organization. Digital consulting helps you to rediscover your company from an outside digital viewpoint through seeing and recognizing potential but also weaknesses.
Thirdly, you may simply lack experience in managing the massive and rapid change of digital transformation. A digital transformation consultant brings experience on how to digitize your business in a holistic and targeted way. Digital transformation consultant skills are therefore crucial to make your company digitally successful in the long term.
The customer is the starting point and focus of digital consulting
The digital customer is the focal point of your digital transformation. Excellent digital transformation consultant skills need to be based on an understanding of your digital customers. The only way to identify these needs is to engage directly and authentically with them.
A digitalization consultancy cannot explain to you how your customers think, feel and act. This knowledge is within you and your company. That being said, a digital transformation consultant can show you ways to use tools and methods to gain this understanding, structure it and transport it into your company. A digitalization consultancy coaches you through this process and only actively intervenes when it comes to the effects of your customers’ changed communication and user behavior on your company, value creation, and your business model.
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The five most important aspects of digital transformation consulting
Digital vision – the balance between operational excellence and innovation
Your digital vision is based on the needs of your digital customers and reflects the strengths that your company can play within digital markets. Your digital vision ranges between the following two extremes:
- Operational excellence: Based on modern systems, how does your company manage to get closer to its customers while avoiding unnecessary work and expenses?
- Innovation: How can you digitally rethink your value creation? With which new services, products, and business models can you inspire customers and, ultimately, grow?
Digital transformation doesn’t mean choosing to either invest in new digital services or digitize your current business model. It means digitally strengthening your current core business so that you also have the time to invest in new digital business models. A digital transformation consultant helps you develop a digital goal and a strategy based on it. This helps support the operational excellence of your company in the short term and gives you space to grow in the long term. Digital consulting skills also require knowledge of how these new digital approaches can be combined with your operational business in an effective way.
Your digital business – how does your company benefit from digital transformation?
The following questions give guidance on which values and potentials can be released within your company through digital transformation
- Can you save costs through digital transformation?
- Will you be able to reach more customers?
- Will digital transformation influence your customer loyalty?
- Will digital transformation help you open up new markets?
- Will you be able to grow and extend your value creation digitally?
Naturally, measures in the area of “operational excellence” are much easier to evaluate. In contrast, new innovative projects require different standards and evaluation criteria. Digital transformation consulting can help you in the following steps:
- Concepting a successful strategy
- Formulation frameworks critical to success
- Establishing business cases and budgets
- Analyzing key performance indicators to measure success
After these steps, you’ll also have an economic foundation that acts as a basis to foster the digital development of your company. The stronger this foundation is, the easier it will be to progress successfully in difficult times.
Recognizing disruptive scenarios – What threats does digitalization pose to your company?
Companies and executives regularly underestimate the disruptive power of digital business models. That is why a digital transformation consultant needs skills to understand the dangers that can arise as a result of digital technologies, platforms, and new competitive situations.
Here are some examples of the biggest threats:
- You lose access to your customers because your business is not visible on digital channels or because other digital platforms provide better service
- Technology is not understood or only used to strengthen your current business model instead of asking how your business model can be made obsolete by technology
- Value creation is transferred to the customer or other market participants
- High price and supply transparency leads to price and margin pressure
- Companies from other industries, technology groups, or startups enter your market with higher capital
- Market entry barriers fall and companies need new strategies to expand and keep their leading market positions
Throughout a digital transformation consultation, you’ll develop scenarios together and an understanding of which threats apply to your company. The answers and insights from this process flow into your digital strategy. A digital consultant provides valuable technical expertise, in-depth knowledge of digital ecosystems, and an understanding of the success factors of digital business models.
Organization and Leadership – Digital Leadership and Agile Organizations
Your company needs new leadership and organizational principles so that digital transformation can be successful within your company. Here are a few examples of how digital transformation and organizational principles are intertwined:
- The introduction of new systems can result in new roles and processes
- A focus on the customer and a high customer experience requires high end-to-end process transparency and cross-departmental collaboration
- New services and products require new interdisciplinary teams
- Market dynamics and complexity overwhelm hierarchical organizations
If you only digitize your company without considering the feedback on your organization, the digital transformation will have no effect. A digitalization consultancy recognizes these systemic dependencies and also includes your organization in the consultation. From this, you create concepts on how you can involve the organization and each individual employee in the upcoming changes.
Building own digital competencies
A qualified digital consultant with valuable skills will advise you on how to build your own digital expertise. For corporations and midsize companies, there is often no way around setting up their own digital department. Smaller companies are a bit more flexible in their approach. Qualified advice on digitally transforming your company includes the question of how to foster these competencies at an early stage. The following questions are at the forefront of this process:
- What competencies do we need to build up internally on a permanent basis in order to be successful digitally?
- How can we position and anchor this competence in our company?
- How do we ensure that “old knowledge” and “new digital thinking” are connected?
Conclusion – digital consulting as an accelerator of your digital transformation
Qualified consulting for the digital transformation of your company requires a variety of conceptual and operational competencies. A good consultant provides digital expertise and the ability to see digital technologies and ecosystems within the context of your company. Agile methodological competence is important to accompany digital projects into implementation in short iteration cycles. If you want to build these digital competencies internally in the long term, an external consultant can be a great and valuable accelerator for your digital development.
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