Digital consulting: opportunities and risks

Today, we know consulting primarily as "face-to-face" consulting, in which the consultants are on-site with the customer. Whether this will also be the case in the future is questionable, because: Increasingly, digital technologies are establishing themselves in consulting, which have often been used in the corporate context for a long time. There, the trend is clearly moving in the direction of network-supported collaboration. This can be seen, among other things, in the fact that more than 200,000 companies worldwide are already using the collaboration tool Microsoft Teams in 2017.

Consultants are not pioneers in digitalisation
The term digitization originally referred purely to the transfer of data from an analog to a digital storage form. Increasingly, however, it also refers to the transfer of tasks that were previously performed by people to computer systems. Many companies across industries are dealing with the challenges and opportunities that arise from this.

The automotive industry is thinking about self-driving cars and banks are using machine learning for Robotic Process Automation (RPA). But the consulting industry? It has remained largely untouched by this until now. Consultants continue to travel the world as before, except that today they also have a laptop and a smartphone in their pockets. However, the possibilities of digitalization have hardly been used in the consulting process itself or for its effective design.

This is gradually changing - among other things, because in addition to Skype, there are now numerous tools that enable communication and collaboration over distance digitally. One example of this is the Microsoft Teams tool mentioned above.

The use of such tools in the consulting process results in advantages not only for the consulting companies, but also for their clients: Consulting as we know it today usually takes place on the client's premises. This involves travel costs for each consultant. They often make up a considerable part of the total costs, because they usually have to be paid by the client in addition to the consultant's fee - just for the fact that the consultant is on site.

Digitization enables new consulting formats
A growing number of companies are asking themselves: Is this still appropriate in the digital age or can't advice also be provided "remotely", i.e. with the help of modern communication technology? Companies are also asking this question because a more intensive use of modern information and communication technology would also have the advantage that shorter consulting sessions would be possible.

Up to now, the travel time and travel expenses of the consultants, which have to be paid by the customer or indirectly, usually only pay off if they are on site for at least one day and work for the company. This can and will change with digital consulting. Then work and consulting units of one or two hours will be possible due to the omission of travel times and costs. Short-term consultations via Skype and Facetime are also increasingly demanded by companies and the collaboration tools mentioned are increasingly used in the consulting process. Why not? Their use is already an established practice in cross-location and cross-company team and project work in companies. So why not use them for consulting work?

Paying attention to the human success factor in change
But in many cases, digitizing consulting is not as simple as it first appears, because one important factor must not remain unconsidered: the human factor. It plays an important, if not the decisive role, especially in change management. In the case of complex and consequential topics, such as a reorganization, it would be absurd from the employee's point of view if the consultants only accompanied the restructuring process online, for example via video conference. This would have a direct impact on the quality of the advice, because: Due to the spatial dis-tance and the possibility to simply disengage when there is seemingly nothing left to discuss, an emotional coldness would arise that would not be conducive to the success of the change project. Therefore, the use of video chat tools, for example, can only be an on-top service in such projects - for example, to conduct ad-hoc coaching sessions when a problem unexpectedly arises that requires a short-term solution.

The effort to digitize the consulting process is always on a fine line. It must be constantly re-evaluated,

• where and when the use of digital technologies makes sense and
• where and when personal face-to-face communication is needed.

Establish and expand digital advisory structures
Nevertheless, the consulting industry will have to deal with the topics of digitalization of its services and the use of digital tools in the consulting process in the coming years, because the process of digitalization of the economy does not stop there.

That is why the management consultancy Dr. Kraus & Part-ner (K&P) decided two years ago to expand its tools for digital consulting with a system. At the moment, for example, we are working on optimising software that enables every K&P consultant to call up the knowledge of the entire organisation as required. Similar to the computer voice of a telephone hotline that connects the caller with the right contact person, this software guides its users to the crucial questions they should ask themselves in the respective consulting context. It also shows them which K&P products and consulting services are suitable for their particular needs.

Currently, the software resembles a large internal company knowledge database, which at least does not yet offer customers any benefits that are directly visible to them. However, if, as planned, customers are given direct access to this knowledge database with their problems and questions so that they can quickly find the right questions and answers on their own if necessary, things will look different.

Passing on the accumulated knowledge in a targeted manner
Clients also benefit from the use of digital consulting tools in other ways. It is common practice at most of the larger management consultancies for their consultants to save and document the data and factual knowledge collected in projects in some form for follow-up and follow-up projects. In some cases, they still have difficulties - as do many companies - in storing the so-called experiential knowledge, which is often the basis for expert status. The introduction of a digital level of knowledge storage combined with collegial consultation also facilitates the sharing and passing on of this form of knowledge.

For clients, this results in the following advantage, among others: Assuming a consultant has been working for a company for a long time. Then he usually enjoys a high level of acceptance in the company's organization. Now let's assume that, for whatever reason, new or additional consultants join the company. Then they often encounter reservations. These can be minimized if the "newcomer" uses the knowledge database to acquire the knowledge of colleagues with whom the client organization has been working successfully for a long time. This also saves time and money, because the new, external consultants do not have to be trained again by the company's own staff.

Integrating digital consulting into the consulting process
Digital consulting therefore encompasses more than just the levels of communication and collaboration. It also serves to accelerate and effectively implement consulting processes. However, the (partial) digitalization of consulting must never lead to a neglect of the human factor in change processes and projects.

If the consultants and their clients take this into account, there is great potential for optimisation and savings (in terms of time and money) in digital consulting - for everyone involved in the process. The quality of the advice also increases - among other things because the advisors do not have to travel to an acute need, which is often only possible weeks later. Therefore, a (partial) digitalisation of advice also enables better customer care.