Consulting 4.0 – The consulting market is changing and is reacting to the digital transformation. Today’s consulting landscape is clearly different from that of a few years ago. The magazine Consultingmarket said: “Digitization has hit the consulting industry. Every management consultant is now talking about Industry 4.0, digital transformation and Big data . ” What does that mean exactly? Since I myself work as a management consultant in addition to this research project, I regularly observe changes in my daily work and therefore mix a few of my own impressions into the text.

Consulting 1,2 and 3.0

The first legitimate question that comes to mind as a young management consultant is: What was actually before? What characterized Consulting 1,2 and 3.0? Unfortunately, I cannot name a clear source here, as I had to look for the information from various sites.
Consulting 1.0 is thus the classic solution advice for technical questions. Questions are answered by the consultant with professional competence.
Consulting 2.0 With process consulting, it should now also revolve around communication and interpersonal processes. Customers and consultants are moving closer together.
Consulting 3.0 Consulting is probably the way we currently know it. So with a high level of social complexity and the advisor as a specialist and process advisor. You realize your goals hand in hand with the customer and you are more closely involved.

Consulting 4.0

As a consultant you have recently received a lot of inquiries about tenders such as: Digital transformation consultant , Data scientist or Industry 4.0 expert . The customer’s requirements seem to have changed suddenly and the digital transformation has the industry firmly in hand. Consulting 4.0 seems to be the consulting firm’s answer to this fact.

Good times for specialists?

It wasn’t that long ago that the competencies were clearly defined: A proper management consultant had to be comprehensively trained; He needed special methodological knowledge, of course, but above all he had to be able to demonstrate experience and expertise across industries and specialist areas (Brand Eins magazine in the Consulting 4.0 edition). According to this quote, expert knowledge is primarily required. In-depth know-how and expert knowledge in an industry. The magazine brings many examples of highly specialized advice such as agricultural and forestry advice or “crowdsourcing advice”. There are also voices in the magazine from large consulting firms such as McKinsey: “We used to negotiate margins with the customer’s purchasing department. With our expert knowledge in a niche, we are unrivaled and no longer have to negotiate for margins ”
According to most voices, the focus is currently on digitization. The consultant as an expert for digitization in the customer’s industry. The questions move away from “What actually is digital transformation? “to” How do I lead my company into this new digital world? ”

“Mating season”

So what exactly does a new company look like after this “Consulting 4.0” trend? There are few answers here, but the tendency should be towards strong specialization in-house and the permanent acquisition of partners who are also highly specialized.

Risks and Criticism

What could such a specialization mean? On the one hand, it can mean for a consulting company that we have the following disadvantages:

  • Dependence on a few customers
  • high quality requirements as well as new employees and
  • Danger of competition.

If we move into a niche, there will be few customers and as soon as 1-2 competitors also act in this, it will be tight. There are also high demands on employees every day and I see few opportunities for those starting out on the job.
For companies, this specialization can also lead to a greater need for coordination, as more service providers are required. As a result of specialization, employees could quickly lose interest in the job and the change rate could be very high. Specialists are also said to not have an eye for the big picture.

The traditional medium-sized company in danger?

I observe many medium-sized consulting houses, which have been producing individual software for customers for more than 30 years, increasingly in danger. Smaller houses are already in the red and larger ones are increasingly switching to “temporary work”. I don’t think it’s consulting when I deploy an employee full-time for a customer all year round. I think that traditional medium-sized companies in particular have extensive expertise and should now prepare this for the customer in internal workshops. A specialization could thus be achieved quickly. One thing is certain, however: if I loan my employees to customers all year round, they will change in the medium term. Either to the customer or to another service provider who has already made the transition to Consulting 4.0. I have also noticed a heated discussion here in which many employees ask themselves: Is this still consulting or is it already temporary work? That means, it should now be made a credo: Maintain expertise and train high potentials.

Already temporary work or still consulting?

So the question arises: temporary work or consulting? It is noticeable that medium-sized companies in particular tend towards temporary work due to a lack of expertise. This is mainly known from software development. Many of my interviewees expressed themselves here in such a way that they actually do a completely normal job as a developer for the customer. Wikipedia says: “ Temporary employment (also: Temporary work called or to ANÜ abbreviated) is when employees (temporary workers) are provided by an employer (lender) to a third party (hirer) for a fee for a limited period of time. “This seems to be absolutely the case in this case To become a personnel service provider because the internal knowledge is lacking. The formula is obvious: You get a consultant to a customer if he has more expertise in a topic than the customer. A temporary worker is usually given to a customer as soon as The third form, which is a kind of mixed form, is called service (often in Time & Material) in which a consultant supports a customer with various tasks from consulting and normal activities. Usually these are positions like that Support from a manager or a project leader.

Are you also a consultant?

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The eternal dilemma with travel time

Every consultant knows the following scenario: “The working time itself lasts at least 40 hours per week, since the customer pays five days of eight hours in almost all cases. The actual working hours are usually longer. Traveling around six to 16 hours a week without daily commuting between the hotel and the customer increases the free time to a minimum. With additional activities for the customer or a service for an internal project, the small amount of free time in the hotel is usually lost (source: Computer week ). It also clearly shows that travel is not good for health and social life. Many of my colleagues complain of a lack of fitness, weight gain and the desire to socialize outside of business. After almost 3 years, they actually “just want to go away”. Due to the large number of positions, it currently seems quite easy to get a position in a consulting company. But many of my respondents actually no longer want to go back to consulting, but rather “do something internally”.
In consulting, digitization has been carried out in customer projects for years, but its own industry has so far eluded digital change. For this reason the buzzword: “Consulting 4.0” was developed.

Regionalization against travel stress?

The problem with many consulting firms I have spoken to is that many applicants either quit because of the long travel time or do not even want to start. The goal is therefore: Regionalization . Consultants from Munich should stay in Munich, etc. But somehow this answer was not enough for me and I also believe that this has little to do with digital transformation.

The digital consultant

In the research area of the August Wilhelm Scheer Institute there are subject areas such as: eConsulting stores , virtual consulting, crowd consulting, Consult-Yourself Services and eConsulting Social Networks as an answer to the digital transformation in consulting. At the moment there is still little concrete information on both topics, but I would like to present the basic idea of Consulting 4.0.
The central question is why the consultant supports numerous digital projects and is supported by even more digital tools but has not yet been digitized. The consulting service is therefore still heavily dependent on the individual consultant. If this leaves the company, this leads to extensive damage to the project at the customer’s site.

New target group: Mittelstand advises SMEs

It has been proven that medium-sized companies have significantly lower R&D budgets compared to large companies and can hardly bear the costs of the traditional consulting they need themselves without any scale effect. This is a promising future, especially for medium-sized businesses. He can benefit from the advantages of consulting in a new way that is more suitable and compatible for this type of company (Werth and Greff IM +).
Thanks to digitization, SMEs will be able to use consulting much more efficiently in the future. Central questions in this context are how consulting has so far been used by German SMEs and how its use can be fundamentally optimized through digitalization instruments. It is particularly important to refer to the diverse software-side potentials that arise from topics such as remote consulting, platform markets, self or crowd consulting (Werth and Greff IM +).

Consulting 4.0
Typology of digital services (based on Leimeister 2012, p. 39, taken from Werth and Greff 2016, p. 58, own design).

Consulting Yourself Service

Consult-Yourself Services transfer self-service technologies, which enable customers or end users to use services independently, into the consulting industry.
The consulting industry is an expensive, not very scalable industry. A consultant can only provide one consultancy service at a time. Consult Yourself Services in management consulting can help to overcome these scalability limits and thus make a significant contribution on the way to digital consulting.

EConsulting store

Of the eConsulting Store is the online shop of the management consultancy. More precisely, it is a fully integrated web solution that enables both the sale and the processing of digital consulting services. During the purchase process, the customer is continuously informed by the switchable Online sales advice supported. Virtualized consultations are then activated in the form of links to the remote session in the ECS dashboard at the scheduled date. The links will also be sent as a reminder by email shortly after the appointment.

Summary

If we take these two examples, there are 2 different use cases for digital transformation in consulting. I think that the trend is towards “remote” and flexible work in which the consultant decides for himself how he works. The approaches are there and the question now arises: will the customers of such consulting houses accept this? Since I have been a consultant myself for almost 3 years, I estimate that the consulting houses themselves would be ready and the employees too. I see the strong process more in the hands of the “customer”. He always has the luxury of choosing from what feels like 100 different consulting firms, which are actually all almost equally well qualified. So the question would be justified: why should they then want to get used to a new system? I am definitely looking forward to the further results of the study.

What do you think?

In summary, every consulting company is required to specialize and to prepare services for the customer in a transparent manner. The traditional medium-sized company for individual software will no longer be able to exist in this form. But regardless of whether they are specialists or generalists state-of-the-art. I think the healthy mediocrity will prevail as always. Perhaps it is enough to simply set up a consulting firm a little more agile and react promptly and correctly to trends. Almost every senior consultant has industry knowledge and there are often numerous certifications. So the core is actually only in this consultant now practices of digital transformation, Industry 4.0 or Big data bring closer. Or what do you think, how and whether the consulting industry will change to Consulting 4.0? Have you already noticed changes in your work as a management consultant or as a manager in your work with management consultants?

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Reading tip: Consulting 4.0 whitepaper
Verwendete Quellen anzeigen

Werth, D., & Greff, T. (2016). Consulting 4.0 – The digitization of management consulting. HMD Praxis der Wirtschaftsinformatik – pp. 55-70 – Volume 53 (1)

Werth, D., & Greff, T. (2016). Digital advice, a model for medium-sized businesses . IM + io trade journal for innovation, organization and management. Issue 1 – March 2016


Image-Source Titlepicture: Fotolia.de 2016 – buyed License

Author

I blog about the influence of digitalization on our working world. For this purpose, I provide content from science in a practical way and show helpful tips from my everyday professional life. I am an executive in an SME and I wrote my doctoral thesis at the University of Erlangen-Nuremberg at the Chair of IT Management.

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