London: A new report from specialist consulting research group Source Information Services says that digitisation projects now account for about a sixth (15 per cent) of the global consulting industry, $14.7bn in 2013. The biggest markets are in the technology, media and telecoms sectors ($3.1bn) and in financial services ($2.9bn).
The Source report also says that 27 per cent of all technology consulting work falls into this area, as does 13 per cent of business strategy, as organisations find it increasingly difficult to untangle corporate direction from technology opportunities and constraints.
However, according to Fiona Czerniawska, Managing Director of Source, and the report's author, the digitisation market is also changing. She says, "Digitisation has been primarily seen as an external opportunity, a means for organisations to develop different products and customer channels. But our research suggests that the next wave of digitisation will focus on organisations' internal processes."
The report also revealed globally how international clients rate the quality of digitisation work done by technology firms. Two thirds (62 per cent) of the executives surveyed said that the quality of the digitisation work done by technology firms was 'high' or 'very high' and only 8 per cent described it as 'low' or 'very low', giving a net positive score of 54 per cent. That compares to 34 per cent among strategy firms and 27 per cent among the Big Four firms.
Amongst technology firms, IBM is rated highest by clients, benefiting from a legacy of a strong reputation in existing technology. Accenture features next, with more awareness in different functional areas outside the IT function. The report reveals that TCS and Capgemini Consulting are a little way behind, but for different reasons: TCS because it's perceived to be relatively weak in operational improvement and in understanding how digitisation will change clients' business models and Capgemini Consulting because, despite all the effort it puts into creating thought leadership on digitisation, the firm still lacks board-level awareness and credibility.
As the global consulting market expands, the report also reveals what elements make the perfect digitisation consulting firm:
- Have deep, specialist technology expertise: While an understanding of the business context is vital, it's not enough. Firms need to have a strong grasp of the technology clients see as new (mobile, apps, etc) and the traditional infrastructure which sits behind and beneath the new systems.
- Have a track record in, and innovative tools for, productivity improvement: The perfect digitisation consulting firm will, in effect, have a distinctive and clearly-defined approach to digitisation as a means of productivity improvement, as well as customer engagement.
- Understand how digitisation will change an organisation's business model: The leading digital firms will have people who understand the client's industry, are capable of holding conversations with senior people about the business issues involved and can manage the needs of stakeholders in different parts of the organisation.
- Deliver their services differently: The fact that clients are increasingly looking to digitisation to improve productivity doesn't mean clients want digitisation initiatives to morph into traditional, ERP-style work. Digitisation is different — and clients want it to stay that way. For consulting firms, this means having resources it can deploy at very short notice, proto-typing and compressed delivery times: clients are prepared to pay for extra pairs of hands to make things happen, but only if they happen more quickly. This where pragmatism, tools and the ability to work well with a client's own staff all come into their own.