Consulting 3.0: The digital revolution is changing the consulting industry
Data analytics offers a lot of potential for those able to harness big data; as consultants we are on the leading edge of exploiting this to answer more complex questions, more quickly
Enhancing a ‘standard’ strategy project plan with more muscular analytics requires you to plan ahead for different challenges
Many industries are being overturned by the digital revolution. Consulting is now becoming one of them. Data analytics creates more opportunities than merely an incremental improvement in analysis; it allows consultants to support data-driven decision making in completely new ways.
This is part one of a short series on how analytics is driving change in the consulting industry and where clients should be expecting more value in new ways.
The key opportunities for consulting projects are:
- Comprehensive analysis: Analysis can be performed at greater levels of detail and applied more widely across the business bringing to life opportunities that were previously ‘hidden in the data swamp’
- Faster insights: Analytics enables analysis to be on M&A timescales with data-driven workshop facilitation for big strategy decisions in a way that previously simply wasn’t possible
- Living tools: Consulting deliverables are moving away from static PowerPoint charts, and lots of them it has to be said, to a more mixed set of tools, increasingly including interactive tools allowing executives to intuitively explore their data and find new insights, on an ongoing basis
Ever had to settle for drawing conclusions on your entire offer based on analysis of just a few products? Or had to assume that all products in a category behave in the same way as the average?
Businesses are producing more and higher quality data yet often lack the skill growth to match their data growth. Consultants can bring sophisticated tools to get as much insight from the data as possible, and do so quickly. Larger data sets, a greater range of analytical tools allowing more questions to be posed and answered provides a richer insight into what is really going on and allow decisions to be targeted and fact based rather than directional and approximate.
We know you will have had to settle for less information than you’d like to inform key decisions. This will remain but the art of the possible is increasing. The data may well exist now, and the tools are available to exploit it quickly.
Many executive meetings can now be facilitated with interactive analysis tools that allow decisions to be taken in the meeting rather than waiting for another round of ‘let me get back to you with those numbers’. New tools are also enabling analytics to operate fast enough to support M&A activity and improve competitive pricing (more about this in our next post).
The problem with producing reports is that while they may be accurate when they are produced, they are history by the following day. The data will likely remain relevant for a while but the questions being asked are also likely to evolve. The ‘old’ way is to present a spreadsheet – but modern dashboarding tools have a better balance of robustness and flexibility (who hasn’t spent part of a presentation fiddling with a spreadsheet onscreen while your audience disengages!).
Producing deliverables in dashboards or ‘exploratory formats’ allows clients to work more interactively with the data and for the analysis to continue being used. Ensuring these tools are refreshed with data regularly allows them to live on and add value beyond the development project.
Here analytics is supporting another broad change in the consulting industry – building skills in the client to allow insights to be repeated.
The epicentre of the revolution
The changes are not just driven by new capabilities becoming available to consultants. We are seeing more and more clients building their own analytics teams who are comfortable with multivariate regression, hierarchical clustering and decision trees (just to name a few), and dealing with data sets approaching big data territory. This is now moving beyond the traditional data hunting grounds of telecoms, media, technology and retail, where analytics is already being widely used across multiple functional areas.
To state the obvious - for consultancy to remain relevant, the advice and techniques must be more sophisticated than those already operating at the client.
Thinking differently together
So we’ve talked about the benefits and opportunities of analytics – what are the downsides? Analytics doesn’t create new risks, but it does exacerbate a few challenges:
Black box risk – because some questions can require deep statistical analysis to answer, those without understanding of statistics may find the analysis harder to understand. Consultants should always challenge themselves to explain complex analysis in simple ways, but lack of general statistics knowledge can make this harder.
Widened stakeholder pool – getting deeply into the data-detail can bring out new stakeholders in a client’s organisation, particularly IT or Finance who may want to maintain control over how data is interpreted. This can be both an opportunity and a challenge; they can get you to a better answer but may take more time to get there!
Deliverable phasing – when doing deeper analysis, it may not be possible to provide the usual ‘early view of the answer’. This is because the devil really is in the detail with statistics and you may not be able to get confidence that any of it is right until you can be confident it is all right. Good consultants will manage this by parallel running simpler sense check analysis.
Over the next few weeks we are going to go into more detail on the ways analytics is affecting consulting, including how it is opening up new opportunities to improve competitiveness in Deals and how it is changing the skills in our junior hires.
For more information on our thought leadership in analytics see ‘Putting analytics to work’.
Graham Alexander, Manager