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15 Consulting in the digital era?
The role of tomorrow’s management
consultants
Anthony Larsson, Nicole Andersson,
Peter Markowski, Malin Nilsson
and Ivy Mayor
1. Introduction
The term “consultant” can indeed take on many different forms. At bedrock, it
refers to a professional who provides expert advice within a specic, specialized
area (Oxford Dictionaries, 2018; Tordoir, 1995). Consultants are commonly dif-
ferentiated as being either “internal” or “external” consultants, depending on what
function they serve or to whom they provide consulting advice. An internal con-
sultant typically refers to someone operating within an organization. They may
be consulted on their area of expertise by others within the same organization. An
external consultant, on the other hand, typically refers to an externally employed
expert who provides assistance or advice to an actor on a temporary basis, usually
in exchange for a fee (Armbrüster, 2006; O’Mahoney and Markham, 2013).
While the two categories are similar inasmuch that they both adhere to issues
concerning condentiality, risk project, project termination, etc., there are several
practical differences between them as well. For instance, internal consultants are
usually contracted in a rather informal manner as opposed to external consult-
ants, and tend to be considerably cheaper to contract. They also tend to have a
better knowledge about the organization from the outset than an external consult-
ant. However, their strong tie to the organization carries the innate risk of them
becoming overly cautious and/or apprehensive in taking or suggesting an action
that would risk upsetting someone with the ability of inuencing the internal con-
sultant’s career in either direction. They may also lack certain skills in facilitating
organizational change (Cummings and Worley, 2013; Burtonshaw-Gunn, 2010).
External consultants, on the other hand, are often able to select their clients
according to their own criteria and/or prole. They are generally looked upon as
being more prestigious, which in turn elevates the organizations expectations for
them to achieve their goal. This, by extension, enables the consultants to probe
difcult issues and assess the organization in a more objective manner, devoid of
any personal attachments and without fear of reprisals from the manager (Cum-
mings and Worley, 2013; Scott and Barnes, 2011).
Moreover, consulting rms range in size from sole proprietorships, consisting
of a single consultant, and small businesses consisting of a small number of con-
sultants, to mid- to large consulting rms. The latter of which may in some cases
Consulting in the digital era? 255
be multinational corporations. This type of consultant generally engages with
multiple and changing clients, which are typically companies, nonprot organiza-
tions or governments.
While a plethora of specic types of consultants exists, this chapter will pri-
marily focus on management consultants, as this is one of the most common,
and among recently graduated university students, most popularly sought after
types of consultancies (Wickham and Wilcock, 2016; White, 2011; Hope, 2016).
One of the reasons for this is that management consulting is known to generate
high streams of revenue, both for the individual consultant, as well as for the
consultancy rm, with some recent university graduates receiving offers from
top rms with a remuneration approaching or even exceeding USD90,000 in
their rst year (Nisen, 2013; Harvard Business School, 2018; Management Con-
sulted, 2018).
Management consultants are typically external consultants who provide the cli-
ent management with strategic and/or operational advice (data driven). The rea-
son why companies hire management consultants is explained by Greiner and
Metzger (1983, p. 7):
Management consulting is an advisory service contracted for and provided
to organizations by specially trained and qualied persons who assist, in an
objective and independent manner, the client organization to identify man-
agement problems, analyze such problems, and help, when requested, in the
implementation of solutions.
As the digital transformation continues to make its way through various busi-
nesses, the consultancy profession is no exception, as pointed out by Christensen,
Wang and van Bever (2013). Digital transformation aims to increase efciency,
competitiveness and accessibility of consultants by transitioning much of their
businesses to digital technology. However, there is currently a lack of research
on how digital transformation affects the role of management consultancy in the
future, as there is confusion as to how consultants should structure their digital
business (Marriage, 2018). There is also a pressing issue in regards to whether or
not the consultants as we know them today are likely to look the same tomorrow,
given the technological advancements (Czerniawska, 1999).
Thus, the overarching research questions are:
RQ 1: How may digitalization inuence the consultant’s role of tomorrow?
RQ 2: How may the prole of the typical consultant change in the future?
As a theoretical/speculative study, this chapter seeks to draw upon some of the
available literature and the authors’ own best-practice experiences in exploring
some of the most pressing issues of the digitalization of consulting of today, with
an anticipation of how the role of consultants may come to develop in the near
future (Kim, Sefcik and Bradway, 2017; Cooper and Endacott, 2007; Elliott and
Timulak, 2005; Murphy and Dingwall, 1998).
256 Anthony Larsson et al.
2. The background of traditional consultancy
A recurring point throughout the years has been contention that consultants
receive vast amounts of money for their services and that much of this money
is spent on impractical data and poorly implemented recommendations (Turner,
1982). Thus, in order to reduce waste, there is a need for potential customers to
better understand what consulting assignments can accomplish. Historically, the
traditional role of a consultant has been “to advise and assist the client in carrying
out the project denition and contracting process, as well as with the management
and execution of design, plus administration, supervision and quality control of
the . . . contracts” (Harrison and Lock, 2004, p. 85). Typically, the consultant
carries out a lead role in a given project, but falls short of overall project manage-
ment and/or integration inasmuch that they are generally not accountable for, or
in charge of, all parts of the project (Harrison and Lock, 2004).
The years following World War II are often described as the “emergent period
of management consulting” (Srinivasan, 2014, p. 259). During this period, con-
sulting entrepreneurs would highlight the signicant contrasts between the status
quo and broad cultural logics and use insights from outside their professional
eld to suggest solutions to problems. Moreover, they would emphasize the larger
societal benets of the proposed solutions, establish the uniqueness of their pro-
fession by establishing social codes, and establish relationships with prominent
actors outside their professional eld in order to legitimate their problem-solving
models (David, Sine and Haveman, 2013). This evolution would eventually lead
to an industry consisting of various actors and rms that are conceptually similar,
but yet markedly differently positioned (Srinivasan, 2014).
In later years, various corporations have begun making increased use of titles
that include “consultant” (Srinivasan, 2014). These staff members are effectively
“internal consultants” (as described earlier in this chapter). These consultants pro-
vide the company with specialized expertise, but as “internal” consultants they are
an integral part of the organization. As such, they do not generally bring in the “out-
side” perspective that clients often seek (Srinivasan, 2014). Arguably, the external
perspective has traditionally been of key importance as Fincham, Mohe, and Seidl
(2013, p. 6) identify management consulting as including “any activity that has as its
apparent justication the provision of some kind of support in identifying or dealing
with management problems, provided by individuals, groups, or organizations that
are external to the particular management domain and which are contracted by the
management on a temporary basis”. The added value that external consultants bring
to their clients is that the consultants are able to provide them with unique exper-
tise, innovation and/or swiftness not readily available to the client (Momani, 2013;
Srinivasan, 2014). To this end, a vital component of management consulting has
also been the ability of providing advisory services by specialists who can assist the
client in an objective and independent fashion in identifying management problems,
analyzing problems, proving suggested courses of actions and in some cases, even
assist in the implementation of solutions (Greiner and Metzger, 1983).
In time, however, the value proposition of the consultancies have gradually
shifted from providing specialists to solve clients’ business problems to granting
Consulting in the digital era? 257
clients the ability to tap into the consultancy’s knowledge base, as many clients
and consultancies have similar access to the resource pools for hiring new recruits,
i.e., promising graduates from top business schools (Sarvary, 1999). This means
that consulting rms in the past couple of decades have had to emphasize the
power of its collective knowledge rather than the individual expertise among its
staff (Srinivasan, 2014).
The term “consultant” has shifted meaning from solely pertaining to expert
advice during a limited amount of time, to also including concepts such as staff-
ing consultants, or contractors (Hyman, 2016; Berry and Oakley, 1994; Turner,
1982). Some companies have employed a strategy of hiring consultants rather
than employing staff, as it enables them to quickly cut back on stafng costs
whenever recession looms (Banks and Coutu, 2008; Baumann, 2009).
3. The four phases of consulting
Prior to implementing solutions, the solutions in question need to be devised and
clearly articulated in the upcoming implementation plan. This is typically done
along with the consultants during a phase called “solutions design” (or something
to that effect) (Grifn, 2017). These are executed by either the management con-
sultants or the organization itself.
In an oversimplied manner, consulting can be expressed as consisting of
four different phases: (1) the pre-analysis phase, (2) the problem-identication
phase, (3) the analysis phase and (4) the implementation phase (as depicted in
Figure 15.1). These four phases each carry their own potential issues.
3.1. Pre-analysis phase
Initially, there is the pre-analysis phase that seeks to answer the “why” of what
needs to be accomplished. In a strictly oversimplied and theoretical world, this
phase can be omitted and a consultant would be able to dive right in to deal with
the problem at hand. However, in practice this is rarely, if ever, possible, due to
Analysis (What/Where?)
Problem identification (Who/Which?)
Implementation (How/When?)
Pre-analysis (Why?)
Figure 15.1 The four phases of consulting (authors’ own depiction).
258 Anthony Larsson et al.
the fact that the management consultancy services are ever so often subject to
various forms of organizational politics and demands from other hierarchical lev-
els within the organization (Verlander, 2012; Hodges, 2017). Moreover, the local
executive in charge of contracting the consultant ever so often lacks the insight
in the actual (or perceived) problem at hand and often needs someone to guide
them in taking the next steps (Cummings, 2010; Keuning, 2007; Cohen, 2016).
This problem was highlighted in a 1989 landmark study, in which Yoshida (1989)
coined the famed expression, “the Iceberg of Ignorance”. This pertained to the
realization that only 4% of an organization’s frontline problems are known by
top-management, 9% are known by middle-management, 74% by managers and
100% by employees.
By and large, the issue of “the Iceberg of Ignorance” remains a problem to
this day and age (Jankowski, 2017; Corey and Elliott, 2018; Ray, 2016; Albert,
2018). In practice, this means that the management consultant during the initial
phase is often tasked with greeting staff across the hierarchy (i.e., not only execu-
tives), in order to acquire a level of empathy and gaining a better understanding of
their situation, why it is important, and how to go about helping the organization
achieve its aspirations (Gourguechon, 2017; Poulfelt and Paynee, 1994; Senge
and Krahnke, 2014).
3.2. Problem-identication phase
The problem-identication phase that seeks to answer the “who” or “which” that
lies at the root of the client’s problems (Heiser and Farah, 2018; Benn, Jones
and Roseneld, 2008; Schmidt, 2017). This phase is a critical part in the man-
agement consultant’s work as it seeks to establish the problem as identied not
only by the client but also by the consultant. That is to say, the way problems are
dened affects the ability to solve them (Kubr, 2002; Ashkenas, 2012; Conoley,
Conoley and Gumm, 1992). For instance, a company might nd itself struggling
with declining revenues/prots, or with increasing costs. They might lose market
shares but fail to understand why.
In order to be able to identify root causes and solve these problems, the con-
sultants typically start by gathering quantitative and qualitative data, mainly from
internal data sources but also external if needed (Newton, 2010; Andler, 2016).
Examples of internal data can be nancial data, company annual reports, inter-
views, surveys, etc. External data sources that may be used are e.g., competitor
annual reports, interviews with external experts and customer surveys. The inter-
nal and external data is used to build a solid foundation in order to understand the
industry context as well as the internal starting point from where to undertake the
analysis.
Analyzing the collected data to understand root causes is instrumental to every
project. Management consultants often operate from a hypothesis-driven structure
when developing the right choice of methods and tools for their tasks (Liedtka,
2006; Rasiel, 1999; Garrette, Phelps and Sibony, 2018). This means that the man-
agement consultant will depart from their best, educated guess of an answer to a
Consulting in the digital era? 259
given problem. It should be stressed that a hypothesis-driven deduction is not “a
shot in the dark”, based on conjecture or personal opinion, but rather on back-
ground information, preliminary data analyses and input from various experts in
the eld and actors in the organization (Hamann, 2012; Weiss, 2011). While there
may not be too many concrete facts upon which to base the hypothesis during
the early stages of the engagement, more facts emerge the further a consultant
delves into the client’s engagements, meaning that the hypothesis development
is the result of a highly organic and evolving process. This approach allows the
consultant to quickly gain a grasp of the organization and nding a hypothesis that
can either be supported or rejected rather than having to start from a blank sheet.
Nevertheless, this phase places a lot of demands on the consultant as this is a
phase in which several mistakes are prone to be made. According to Kubr (2002,
p. 186), common issues during this phase include:
• Mistaking symptoms for problems
• Having preconceived notions about the causes of the problems
• Looking at problems only from one sole technical viewpoint
• Disregarding how the problem is perceived in other parts/sections of the
organization
• Miscalculating the sense of urgency of the problem
• Incomplete/decient problem diagnosis
• Failure to clearly articulate the focus purpose
It is thus the role of the management consultant to help the organization avoid
these common pitfalls by bringing in an objective perspective. Organizations
may face difculty in trying to avoid these kinds of mistakes due to internal
forces of power and politics (Mintzberg, 1983). Although the consultant may
also face such difculties, they are often in a better position to assume an
objective/neutral standpoint (Greiner and Metzger, 1983).
3.3. Analysis phase
Following the problem-identication phase, is the analysis phase, which seeks
to answer the question concerning “what” and possibly even “where” something
needs to be addressed. The analysis phase may actually consist of several sub-
stages, depending on the analysis and research methods carried out (Biggs, 2010).
During this phase, the consultant(s) will carry out an in-depth diagnosis of the
problem, while assessing the type change the organization will have to undergo in
order to achieve the purposes of the assignment while also assessing the client’s
performance, resources, needs and aspirations (Harrison, 2005; Kubr, 2002). The
consultant(s) will at this stage determine the client’s attitude toward change and
if the client is likely to carry out suggested changes without much ado or if they
need further convincing before taking action (Kubr, 2002). During this phase the
consultant(s) will be able to see some possible solution emerging from the data
processed. Nevertheless, a lingering issue with this phase is that fact-nding often
260 Anthony Larsson et al.
receives the least amount of attention (Kubr, 2002). At the same time, decisions
regarding what data to look for and what data to disregard predetermines the rel-
evance and quality of the proposed solution(s).
Another problem is that by manipulating processes by, for instance, collecting
data and talking to people, the consultant may effectively yield the potential to
inuence the client’s rm, even if on a micro-political level (Armbrüster, 2006).
This may lead to altered behaviors among the client’s staff as a direct result of
the consultant’s presence, through what is known as the “Heisenberg effect”
(Verlander, 2012). This carries certain similarities to the “Hawthorne effect” and
refers to a phenomenon in which the presence of a consultant/researcher affects
what is being researched (Simonton, 2010). However, the role of the consultant
goes further than that, as a central part of succeeding with actionable analyses
is getting the organization to internalize the results of the analysis. The consult-
ant typically helps the organization through the problem formulation where they
together contextualize and articulate the problems, thus opening up for the pos-
sibility of launching concrete initiatives to address the identied problems (Baer,
Dirks and Nickerson, 2013).
3.4. Implementation phase
Finally, there is the implementation phase, which seeks to answer the question
concerning “how” a proposed solution could be enacted and integrated into the
rm’s operations. This phase marks the culmination of the consultant and the
client’s collaboration. If no implementation occurs, the consultant’s efforts are at
best incomplete or at worst have failed (Kubr, 2002). It is important for consult-
ants to also be part of the implementation phase if they wish to inuence, monitor
or oversee the changes being put into practice (Baaij, 2014; Kubr, 2002). It is,
however, not the consultant’s prerogative to opt whether or not they should take
part in the implementation.
Oftentimes, the clients believe they have the necessary skills and capacity to
run the implementation by themselves, even though they, more often than not,
actually lack the necessary skills. Alternatively, they may lack the nances or the
interest needed to fund the implementation phase. In other cases, it is a combina-
tion of both of these reasons. In these events, it is difcult, if not to say wrong,
to blame consultants for unsuccessful implementations. Consultants whose sole
focus lies on a specic area of expertise and who need not concern themselves
with the regular business routines of their clients would indeed have more time
at their disposal, meaning that they can implement solutions at a far more rapid
pace. Moreover, they also possess the required skills and knowledge to carry out
these implementations, often drawing upon insights gained from past projects.
However, it is important to bear in mind that the effects of consultancy may some-
times materialize after some time has passed after the completion of the project.
Likewise, it is not possible to measure the rm’s performance had they not chosen
to enlist a consultant or vice versa. Hence, it may in some cases be difcult to
Consulting in the digital era? 261
estimate the causality between consultancy and rm performance (Baaij, 2014).
However, as previously discussed, management consultants are often hired to aid
top management in assessing a situation and suggesting possible routes forward,
rather than actually implementing a solution. In such cases, the possibility of
informed choice, rather than an implemented solution, is what the organization
gains from hiring consultants.
4. The digitalization of consultancy services
Management consultants of today are devoting much of their time to conducting
analysis, possibly in vain, since they do not always know the extent to which their
work is actually going to be implemented, or even if it will ultimately remedy
the problem at hand (Kubr, 2002; Srinivasan, 2014). A consequence of this is
that consultants may nd it tempting to opt for the “low-hanging fruits” in the
interest of achieving quick results rather than spending time on more profound
and complex problems (Chase and Kumar, 2010). Thus, a salient issue that has
been subject to much debate is to what extent, if at all, consultants are solving
the “right” problem (Spradlin, 2012). That is to say, clients will still continue to
experience the need for consultancy services, but there is an increased need for the
clients to reduce their risk while still ensuring that they receive sustainable solu-
tions that address the core of their problems (Newton, 2010). What distinguishes
the best management consulting rms is their ability to go beyond the quick and
sometimes simple solutions to solve the complex problems and achieve real and
sustainable change. By being able to do so, they create a reputation for themselves
that leads to repeat business.
With digitalization shaping the business environment, we see increasing data
availability and ranges of analytics tools, leading to larger datasets to analyze
and more data to navigate (Sivarajah et al., 2017; Newman, 2015). Digitaliza-
tion and the digital transformation is changing the way companies do business
and the problems they face, and thus also the consultant’s role (Bieler, 2014).
This chapter will take a closer look at what happens when the consultant is
challenged to adapt to the changing market conditions to stay relevant to their
clients.
The consultant’s role is heavily inuenced by data. Consultants tend to be data-
driven in the sense that they often use different data sources in their work, using
experience to bridge the gap between data sources (Curuksu, 2018). Clients hire
consultants for expertise they cannot get in-house. Will digitalization make these
skills available to everyone? If data access and analysis is facilitated by digitaliza-
tion and made possible for everyone to learn and excel at, then what need is there
for consultants at all? Several identied factors seem to decrease the need for
external management consultants in the future, such as increasing data availability
and increasing availability of analytics tools (Davenport, 2017). These factors,
outlined next, might also change the way we look at a consultant project, leading
to more modularization of the business.
262 Anthony Larsson et al.
4.1. Increasing data availability
Once it is simpler for organizations to gather data (internal as well as external
data), they do not need to hire consultants to nd data that was previously dif-
cult to nd. However, consultants will still have important functions to ll, even
if gathering such data will be done to much less extent. To this end, datasets
still need to be interpreted and consultants are able to infer personal experiences
when making these interpretations. That is to say, consultants use business judg-
ment and experience to bridge the gap in poor datasets. Examples of external
data sources often used by consultants are industry reports, expert networks with
industry experts and research and surveys done by large strategy houses. With
increased access to these sources, now most of them are only a Google search or a
phone call away, it is no longer necessary to bring in consultants to piece together
information.
With higher quality of internal data and ways of gathering data getting bet-
ter, the need for relying on external input and data sources will likely also
decrease. This will decrease the need to rely on management consultants to pre-
sent facts. However, management consultants also, to a large extent, provide tacit,
experience-based knowledge. This allows for rapid diagnosis of situations based
on heuristics, which is (barring other instructions) a set of default, go-to rules
that have been developed over an extended period of time following a process
of repeatedly having to address similar problems in other organizations (Newell,
Shaw and Simon, 1959). As contended by Baer, Dirks and Nickerson (2013),
problem formulation is a central and complex part of organizational development.
For this reason, consultants who possess the ability to do this in a swift manner
will likely continue to be in high demand, as opposed to the articulated knowledge
of different management solutions, which will become widely accessible through
networks of shared data.
4.2. Automation of organizational processes
Organizational processes are invariably complex systems, meaning that they con-
sist of a network of several highly interactive and interrelated elements, with each
of these performing its own function (Gino, 2002; Langlois, 2002). In regards to
the aforementioned “four phases of consulting” (as mentioned in Section 3), digi-
talization impacts the rst pre-analysis phase in that complex organizational pro-
cesses will likely become more automatized in the future due to the advancements
of various robots and AI-algorithms (Daugherty and Wilson, 2018; Davenport
and Ronanki, 2018; Manyika and Sneader, 2018). Consequently, the traditional
setup of most organizations of today may very well change in the near future as
robots may come to take on increasingly more complicated challenges, requiring
no human involvement.
The automation process that follows the digital transformation also entails that
organizations are able to operate in a more agile manner, while reducing lead-
times (since machines operate faster than humans). This means that it will become
Consulting in the digital era? 263
more difcult, perhaps even futile, for the consultant to establish relationships
with the staff with the intent of gaining insights into how the business operates.
That is to say that the hypothesis-driven approach may yield less information if
used in the same manner as it has been used hitherto. Moreover, digital systems
and algorithms can amass vast quantities of data, meaning that the future consult-
ants will be less likely to contribute “hard facts” that are not already known to the
organization and its AI system. Hence, the consultant’s “know-what” will become
less important in the future, and rather the emphasis will come to rely on the con-
sultant’s “know-how”, in terms of their ability of tethering out information from
complex systems.
4.3. Increased availability of data-analytics tools
Increased data accuracy and higher quality of internal data, combined with an
increasingly advanced analytics tool readily available to the public, makes it easier
for companies to set up in-house analytics teams (Isson and Harriott, 2016; Bell
and Zaric, 2013). This is already in progress with companies such as Walmart,
IBM and FedEx, as they rely on analytics teams in order to gain a competitive
advantage over their rivals (Bell, 2015; Mochari, 2015).
Reverting back to the four phases of consulting (found in Section 3), the second
phase of “problem identication” becomes a salient issue at this stage. During this
stage, the consultant devotes much time toward identifying the management prob-
lems, analyzing data to understand the root causes of these problems and attempt-
ing to devise solutions to these problems. We have seen from companies using
in-house analytics teams that such arrangements are especially helpful during the
third phase of a project, namely during the data analysis. It is possible that this
third phase may in the future be transferred from external management consult-
ants in favor of having it handled by the organization’s in-house analytics teams.
4.4. Complex analytics tools
The access to advanced analytics tools will also increase the speed and quality
of data analysis, as machines can detect patterns in big data better than humans
and are not prone to the same risks of making subjective and arbitrary interpreta-
tions as humans. However, many, if not most, of these complex tools will require
a sizable amount of training in order to become fully versed in them. This can in
turn affect the consultant’s work in different ways. One might be that consulting
projects will become “modularized”, where the client might request a team versed
in using a certain tool or skill set. It can also lead to the internal analytics team
becoming considerably streamlined, meaning that consultants will have very few
sets of skills outside the designated analytics tool, which in turn may lead to a
diminishing need for consultants.
While the aforementioned trends would seem to decrease the need for exter-
nal management consultants in the future, there are also some other factors that
work in the consultants’ favor. Specically, one such factor is the consultant’s
264 Anthony Larsson et al.
prerogative to ask the right questions, as this is often contingent on the consult-
ant’s experience of the subject matter, as well as their decision-making abilities.
Another factor working in the consultants’ favor in the future is the project-based
business model. These factors are discussed in greater detail next.
4.5. Asking the right questions
As previously discussed, the most important factor of a consulting project is the
ability to dene it accurately. Thus, it is crucial to understand the business objec-
tive to delimit the scope of what it is supposed to achieve (Hanna, 2016). Trying to
nd patterns in large datasets without knowing what to look for will undoubtedly
lead to valuable time being wasted. As the need to have someone who knows how
to ask the right questions is such an important factor, it is quite possible that there
may even be an increase in the need of consultants in the future. Especially with
the increased amounts of data, consultants will likely be needed to navigate the
data to an even larger extent than today.
A research study conducted by the management consulting rm McKinsey and
Company interviewed executives in data-driven businesses (Barton and Court,
2013; Díaz, Rowshankish and Saleh, 2018). The executives agreed that the busi-
ness objective was crucial. While access to data and tools may increase the speed
of the analysis and the possibility to analyze more things than in the past, it is still
critical to understand the desired outcome and what problems there are to resolve.
This is becoming even more important, since the quantity of data seemingly con-
tinues to grow in numbers. The external consultants have an additional advantage
from conducting multiple projects within certain functional capabilities, leaving
them with experience the client may lack. They also offer an outside in perspec-
tive, to look at the business from an external perspective which might be valuable.
This is clearly explained by Curuksu (2018, p. 19):
Predictive analytics may be used to identify risks and opportunities such as
economic forecasts, cross-sell/up-sell targets and credit scoring. But the type
of intuition that consultants develop to ask questions, pose hypotheses and
drive executive decisions is still the realm of science ction, not existing
computer programs. Hence, the arrival of data scientists and big data analyt-
ics does not eliminate the need for traditional business professionals.
4.6. Big data does not mean accurate data
While data availability increases, it does not necessarily mean that the data accu-
racy is high (Delgado, 2015; Schuck, 2018). There are several studies showing the
contrary, for example a study conducted by Deloitte (Lucker, Hogan and Trevor,
2017). The data might be from a limited sample, respondents might not answer
accurately and so on. Making decisions based on inaccurate data may be even
worse than making decisions based on experience combined with data. This will
likely keep the demand for management consultants in the future at a stable level.
Consulting in the digital era? 265
4.7. Updating extant business models
In adapting to the changes in the business environment following the digital
transformation process, some consultancies have opted to capitalize on big data
and advanced analytics by extending their service offerings to this category as
well, providing niched and specialized services to customers needing assistance
in these areas specically. BCG Gamma and McKinsey Analytics are a couple of
examples working in this direction (Curuksu, 2018; Duranton, 2019; McKinsey
and Company, 2019). That is to say, rather than losing this market by leaving
it up to the client’s in-house analytics teams to handle, the consultancies have
expanded their service offerings to better accommodate for this type of demand.
Boston Consulting Group has adopted an approach where data scientists from
BCG Gamma work together with the management consultants to solve the issues
clients face (Duranton, 2019; AI Multiple, 2019).
Digital transformation has become a salient part of management consulting,
as this transformation constitutes a major change required for their clients to sur-
vive in a digitalized world. Management consultants become key players in this
regard, as the transition to a digital environment is more about management than
it is about technology. Putting digital on the top management agenda, introducing
agile working methods and enabling for experimentation are parts of becoming a
digitally mature organization (Snow, Fjeldstad and Langer, 2017). To enable digi-
tal transformation, management consultants thus aid the organization in design-
ing and adjusting routines in tandem with the introduction of new technologies,
making it possible for the organization to use these new technologies to achieve a
new, digitally-enabled, state of business. For this reason, management consultants
play a pivotal role – while new technologies and analytics are a key component of
becoming digitally mature, these tools are of no value unless combined with the
relevant management principles. In this sense, digitalization, although often mis-
takenly regarded as an end state, is in essence an implementation of technological
tools, which, combined with appropriate management practices, enable organiza-
tions to function in a digitalized world.
4.8. Combining management consultants with data scientists
As previously discussed, the advanced analytics tools will require an extensive
amount of training from the consultants’ part in order to gain prociency in them
(Consultancy.uk, 2018b). Additionally, these tools will require prociency in sta-
tistics (Tong, Kumar and Huang, 2011). One possible way for management con-
sultants to retain their strong market position would thus be to collaborate with
data scientists, who possess knowledge of both statistics and the advanced analyt-
ics tools (Flinn, 2018; Granville, 2014). This way, the benets of the management
consultants, such as business intuition, decision-making abilities and the sense for
detecting the right questions to ask, may be combined with the technical expertise
of the data scientists. This, in turn, leads to strong analytical capabilities. By bas-
ing at least part of the analysis carried out by the management consultant on solid
266 Anthony Larsson et al.
data science would in all likelihood improve competitiveness as society moves
further into the fourth industrial revolution (4IR).1 The aforementioned project-
based business models would likely facilitate a transition to teams consisting of
both management consultants and data scientists. An example of this approach is
the previously mentioned Gamma team at Boston Consulting Group.
4.9. The project-based business model and the project processes
Management consultants are often employed on a “need basis”. While digitaliza-
tion improves the convenience of having an on-going business support that pro-
vides the organization access to data so that they may make informed decisions
based on the available data, there will always be uctuations in an organization’s
workload and there will be times when the available staff will not have the ability
or the resources to be able to solve the organization’s challenges. For shorter and/
or irregularly occurring projects with occasional spikes in workload, it will (even
in the future) likely be easier to temporarily enlist the services of a trained task
force than hiring new people with the right skills and talent.
In truth, we have already witnessed part of the digital transformation of the
consultancy industry in the form of cloud-based Kanban boards,2 provided by
e.g., Trello, Wafe (GitHub), etc. (Błaś, 2016; Swartout, 2018). There are also
more advanced cloud-based project-planning tools that view the whole process in
a ow-like manner, where it is possible to zoom into the small parts of the project
and add information and comments on the right granularity level. This enables
real-time follow-up of the consultants’ work, as they update the progress. Com-
menting the posts with thoughts and questions to be asked, may also facilitate
the communication between the consultant and the client. There are possibilities
to connect Kanban boards or project-planning tools to communication platforms
such as Slack, so that the client is instantly notied when the consultant makes a
comment. One may expect these features to develop even more so in the future in
order to make the notication scheme even more seamless while upholding fast
communication routines.
4.10. Opportunity for scalability, growth and exibility
Of particular interest to the consulting industry is the strong potential of digitalized
business models for scalability. Contrary to traditional consulting, where the num-
ber of projects and growth are limited by human resources, technology-based con-
sulting allows scalability and growth without raising cost to a similar level (Werth,
Zimmermann and Greff, 2016; Stamp, Prügl and Osterloh, 2013). Earlier in this
chapter we have identied and discussed a number of key areas and strategies that
could enable technology-cognizant consultants to gain competitive advantages in
the future digitalized economy. By facilitating certain processes to become more
technology and customer based, consultants gain a possibility to focus on their
primary decision-supporting competences, therefore consulting services can be
provided in a more exible, more individualized and more cost-efcient manner.
Consulting in the digital era? 267
Deploying digital technologies will enable routine information-based tasks of
consulting to become increasingly more automated and outsourceable, therefore
boosting the effectiveness of physical resources, potentially reducing expenses
and time invested by consultants in the services. Additionally, the non-routine
essential value-generating and business-operating factors will be further enhanced.
The digital transformation of consultancy also allows consultants to become more
exible both in terms of time and space, as they are no longer bound by the con-
straints of having to travel to the client at any one particular location (Nissen and
Seifert, 2015). By integrating customers and potential third-party actors, whose
help consultants may enlist for specic processes (e.g., statisticians, program-
mers, interface designers, etc.), into a digital interface, it is possible to facilitate a
service process that is more efcient in acquiring and storing information, while
providing more economical and individualized solutions. The changing roles and
activities of the consultants as they evolve from traditional consulting to digital
consulting, should in theory lead to increased scalability, higher growth and ex-
ibility. Latecomers, who are too slow to recognize the potential and to embrace the
power of digital technology in consulting, could soon nd their services becom-
ing obsolete or too cost-inefcient in order to provide meaningful services in the
future world of consulting.
4.11. Further opportunities, risks and implications
of digital consulting
The degree of success a consulting service can expect to reap through trans-
forming conventional processes into digital ones is primarily dependent on the
consultants’ ability to cater for the changing needs of their customers in the
technology-oriented market. While digital consulting carries many benets over
traditional consulting (such as greater exibility, faster lead-times, more cost-
efciency and better catchment area), there is still a discernible resistance to the
digital transformation of consulting among a great portion of clients as well as
consultants. Indeed, digital consulting has made great headway, with many newer
innovations such as web-based le-hosting systems (e.g., Dropbox) becoming
more commonplace in everyday consulting use. However, due to a general lack of
knowledge and trust in new technologies and their capabilities, many people tend
to be skeptical and cautious of using them, at least initially.
The disparity between the standards and practices used in digital solutions as
well as in consultancies themselves, is also the cause of signicant barriers for
widespread implementation of digital consulting. By establishing international
and national standards for the services provided via digital consulting, it would
be possible to make the future consulting practice more compatible with pre-
existing consulting practices, meaning that already established conventions could
unequivocally also be part of the new digital consulting practice. In 2017, the ISO
20700:2017 Guidelines for Management Consultancy Services were developed as
a guideline for people or organizations for the effective management of manage-
ment consulting services (ISO, 2017). By drawing upon research and experience
268 Anthony Larsson et al.
from a wide array of management consultancies around the world, the ISO
20700:2017 seeks to increase transparency and effectiveness for clients as well
as consultancies and aims to provide practical guidelines based on outcome while
emphasizing the importance of understanding the clients’ needs (Boler, 2017). To
this end, a practical rst step could be to update the ISO 20700:2017 guidelines
to establish a set of recognized standards that better reect the aspects relating
to digital consulting. In doing so, it would be possible to further strengthen and
increase trust for and acceptance of these types of services.
To ensure maximum benets at minimal loss for consulting providers, it is
essential to clarify and to further discuss some novel opportunities and risks from
perspective of both the consultant and the client. Over the past decade, the digital-
ization process has allowed for reduced direct face-to-face interaction in specic
stages of the consulting project (in some cases the interaction may be exclusively
digital on a remote basis). Using this virtual approach enables consultants to
deliver customized solutions anytime and anywhere while optimizing the work-
load to gain a sustainable competitive advantage. Besides nancial benets and
the improved exibility of consulting services, such new type of interaction is
advantageous for the client as the availability of consulting is not contingent on
arranging physical meetings. Moreover, this digital type of interacting reduces
much of the waiting times associated with arranging physical meetings, which
in turn helps expedite the consulting project. That is not to say that the potential
lack of physical meetings is without concern. It is known that face-to-face meet-
ings help strengthen the bond of trust between the consultant and clients (Taylor,
Daymond and Willard, 2018; Goman, 2016). While physical consulting meetings
take a back-seat, the clients continue placing higher demands on the quality of
their consultancy services (Bryder, Malmborg-Hager and Söderlind, 2016; Nis-
sen, 2018). To that end, there is a risk that the reduced direct client-consultant
interaction incurs added communication difculties, a sense of deindividualiza-
tion and weaker client-advisor relationship.
Another risk consultants must beware of is the fact that digitalization and auto-
mation of processes make consulting services increasingly prone to cyberattacks
and fraud. Responsible dealing with data and adequate stability of the infrastruc-
ture are essential for successful digitalization of consulting services. Moreover,
the protection of personal data as well as business data needs to be guaranteed
(Schuster, 2005). When developing solutions utilizing digital technology, consult-
ants need both to uphold the client’s trust and to offer legally valid data security
(Nissen and Seifert, 2015).
The lack of common practices, standards and regulatory framework in infor-
mation security is an impediment to the implementation of digitalization in the
consulting industry. Legal ambiguities are of particular concern, since consulting
services are based on large amounts of complex data from various sources. For
example, when a consultant working on the behalf of their client, extracts infor-
mation about consumers from market data and then processes this information
using an analytical application, an additional data-privacy approval may or may
not be needed depending on the context and legal framework of the country of the
Consulting in the digital era? 269
client being serviced. Thus, added consideration should be given to relevant secu-
rity technologies and concepts so that the consultants are completely familiarized
with all the intricacies of data security and privacy in an international setting.
All of the aforementioned factors may have damaging effects on the client-
consultant trust, which is in and of itself an integral component of consulting
(Glückler and Armbrüster, 2003). From a strategic point of view, it is important
to establish a feeling of cohesion between the involved parties beyond the limita-
tions of digitalization, consequently it is highly desirable for clients to feel secure
about the privacy of their data and to have the continuous support and access to a
consultant through personal contact if need-be.
Research studies have shown that rising degree of digitalization of consulting
services lead to an observable shift in the clients’ expectation and service quality
criteria (Nissen, Seifert and Blumenstein, 2015). The personal client-consultant
relationship decreases in signicance from the client’s perspective, whereas fac-
tors such as support availability, privacy and data security, reaction capability,
efciency, aesthetics and compensation rise in importance. Given the growing
number of clients wishing to have a combination of digital-consulting services
and conventional personal consulting, it is essential for consultants to continue to
accommodate the client’s wishes rather than coerce them into a style that panders
to the consultant’s convenience at the expense of the client’s trust. To this end, it
is vital that consultants ensure that they have a secure and stable digital platform
and analytics infrastructure, so that the designed digital-consulting products serve
to strengthen the trust and relationship with their clients. Nevertheless, a great
part of the challenge for future consultants is to ensure that the quality and bal-
ance of traditional/digital services live up to the satisfaction of the ever-changing
demands of their customers.
5. Conclusion
The premise of this chapter was to explore the future role of management consult-
ing following digitalization and the digital transformation. The chapter set itself
out to explore the following two research questions:
RQ 1: How may digitalization inuence the consultant’s role of tomorrow?
RQ 2: How may the prole of the typical consultant change in the future?
In doing this, this chapter drafted up a model outlining the four phases of consult-
ing, consisting of the pre-analysis phase, problem identication phase, the analy-
sis phase and the implementation phase (illustrated in Figure 15.1).
In response to RQ 1, this chapter concludes that data analytics tools will play
a central role in the future. Above and beyond, it is primarily phase 3, i.e., the
analysis phase, that will see the greatest benets of digitalization. As such, the
overall digitalization (and digital transformation) may decrease the perceived
need for (external) management consultants in the future, as various forms of
analytics tools, AIs, algorithms, scripts, etc. may become available on the market
270 Anthony Larsson et al.
that purports to enable for organizations to take ownership of their own optimiza-
tion process.
There will undoubtedly surface companies whose business model seeks to cap-
italize on the advancements of digital tools in order to sell various iterations of
customized package solutions to organizations in order for them to optimize their
own business performances in the belief that they are saving on consultancy costs.
Hence, companies may nd it tempting to outsource this task to their in-house
data scientists. This, in turn, may have disastrous effects as part of the consultant’s
role is to help the client contextualize/articulate the problem, something which the
client’s invariably lack the insight to do on their own accord. Management con-
sultants also possess “tacit knowledge”, which means that no matter how much
data/information that is made readily available on the open market, the consult-
ants have their own set of heuristics and knowledge of how to facilitate groups,
handle organizational politics, stakeholders, etc. This also provides management
consultants with the advantage of being able to swiftly assess any given situation
based on their own experiences and know-how, while identifying solutions that
will work well within a given particular context.
This is not to belittle the future role of data scientists by any means. On the
contrary, data scientists possess valuable knowledge of statistics as well as pro-
ciency in how to best use and interpret the advanced analytics tools. To this end,
digitalization may actually serve to prompt a more integrated, multidisciplinary
arrangement of management consultants and data scientists working in tandem to
solve complex organizational problems.
To this end, while the fourth stage, the implementation phase, is where the
whole endeavor comes to fruition, it is important to stress that implementation
is not always everything. A suggestion brought forth by a consultant that is not
implemented is not necessarily tantamount to failure. Sometimes the chief gain
from consultancy can be that one becomes aware of one’s situation and having all
possible scenarios and outcomes presented to oneself and being given a sense of
agency to choose one’s own direction going forward.
In regards to RQ 2, the role of the typical consultant may change inasmuch
that there is an added need for consultants to at least familiarize themselves with
the workings of digital tools and what they can accomplish. There will also be a
need for consultants to learn to work in closer collaboration with other profes-
sions, chiey data scientists, which will place greater emphasis on the consult-
ants’ ability to be “team players”. Traditionally, business students have constituted
the natural selection of management consultants (Curran and Greenwald, 2006).
However, with the digital age emerging, students of more data-oriented and/
or technological disciplines can be expected to make a foray into management
consulting (Kubr, 2002; Wright and Kipping, 2012). Thus, the importance of
multidisciplinary approaches and the ability to communicate across educational
backgrounds will become even more important in the digital age.
As digital technology becomes an integrated part of organizational processes,
management consultants may, to a larger extent, aid organizations in working with
data, rather than trying to reduce latency in manual processes. While management
Consulting in the digital era? 271
consultants with long-standing practical experience will continue to be a sought-
after commodity even in the future, old consultants will eventually retire and new
consultants will need to earn practical experience on fresh merits. Thus, in the
future, it is likely that management consulting will not only be about being able to
know one’s way around people, but also (if not more) about knowing one’s way
around “4IR” technology.
Management consultants will need to work with new technologies in a new
digital and innovation-driven economy where clients will want to know how their
enterprise can benet from such digital advancements as blockchain, smart con-
tracts3 and algorithms (Corrales, Fenwick and Haapio, 2019). Specically, man-
agement consultants will need to offer value that exceeds what digital technology
will soon purport itself to do of its own accord (Kelley, 2016; Martin, 2009). Cli-
ents will therefore need to enlist consultants that are knowledgeable in these types
of technologies in order to provide strategic advice and those consultants who are
not competent enough in this area may risk losing their customers to another con-
sultancy. Hence, being tech-savvy will in a way become quintessential in secur-
ing the customers’ “brand loyalty” to the consulting rm (Corrales, Fenwick and
Haapio, 2019). For this reason, uency in digital will be a central part of core
consulting skills, just as integrating systems will be a natural part of organization
design and process development. However, this is not to say that the future con-
sultants should forgo their ability to interact with humans and only be hired on the
basis of possessing the necessary technological expertise (Erikson and Markuson,
2001). Rather, complexity will increase as today’s distinction between human and
technology processes will become less obvious, and interfaces between humans
and technology will become more sophisticated and less rigid. This will require
management consultants to be comfortable in interacting with both people and
technology in fast-paced business processes and offer clients contextual insights
and prociency that a mere algorithm cannot. This is yet another argument favor-
ing collaboration between management consultants and data scientists along with
other professions of a heavier-set technical background.
With clients wanting advice on how to benet from digital advancements, one
could easily envision a process in which the management consultant is initially
hired in order to evaluate the business needs and suggest various technical solu-
tions, such as algorithms for e.g., predictive maintenance, or other types of pre-
dictive analysis. Following this example, the management consultant would then
engage data scientists or algorithm developers/programmers in order to imple-
ment the suggested actions. Following a close working relationship between the
management consultants and the technical experts, the clients would have favora-
ble odds of being able to implement cutting-edge technology and reap its rewards,
while the management consultants would deepen their knowledge and insight of
the technical possibilities without losing sight of their tacit knowledge as previ-
ously discussed.
Consequently, rather than launching large-scale business transformation pro-
grams involving prolonged change-management efforts, consulting will become
more agile as the result and output of change efforts may be instantaneous,
272 Anthony Larsson et al.
making experimentation and iterative problem-solving in short time frames into
the standard practice of management consulting. Management consultant proles
may gravitate toward skills within iterative experimental methods in order to t
with the agility of the digital business.
Most essential value-generating and business-operating factors have the poten-
tial to be enhanced or automated using digital technologies. However, in order
to gain a competitive advantage, these factors need to be constantly attuned to
the changes in the wants and needs of the clients, as well as to the market and
the technological development. Moreover the digitalization of the consulting
industry offers a number of economic advantages. One example is the scalability
of virtual (remote) consulting services. Another example is the cost-savings and
time-efciency brought on by automatization of analytics as well as the decreased
traveling activities. This, in turn, could open up new market shares and for a new
type of client that was previously unable to afford the costly services rendered
via conventional face-to-face consulting. Nevertheless, future consultants should
take caution of the limitations of digitalization and take as many precautionary
measures as necessary in order to preempt and counteract the risks associated with
over reliance on digital technologies.
Of course, consultants who are early adopters of digital technology will likely
continue to have a head start over those consultants who do not, especially the
early adopters who are able to add value through their own creative input. The lat-
ter category entails that they have the ability to put their own touch on things and
are able to infer unpredictable, but accurate conclusions in a way that induces the
same Eureka effect that a machine cannot (Hull, 2002). In this sense, (and tying
into the previously answered RQ 1), human consultants will continue to be indis-
pensable to the consultancy profession even in a future where AI has advanced
beyond the Turing test4 (Christian, 2011).
Admittedly, many management consultants of today would already dene their
work style as “agile” and it is true that the word “agile” has become something
of a buzzword that has permeated the consultancy industry for many years to
describe a sense of being fashionable and up-to-date with how to implement pro-
cesses, projects and products (Rigby, Sutherland and Takeuchi, 2016; Fuchs and
Golenhofen, 2019; Consultancy.uk, 2018a). However, agile methods will become
even more accentuated in a digitalized age and will in many cases form a building
block of the consultants’ work. This will in turn affect the scope of projects (end-
to-end), the consultants’ skills and/or team setup, as well as the cost-revenue-
structure of the project controlling (Krüger and Teuteberg, 2018).
Nevertheless, the digital age may prompt the consultancy organizations to take
on a more agile prole. This is in particular regard to those organizations that deal
with large-scale and far-reaching transformations that have hitherto not had the
capacity to conduct their work in a faster manner.
Acknowledgements
A special acknowledgement is extended to Vendela Klint for her insights and sup-
port in preparation of this chapter.
Consulting in the digital era? 273
Notes
1 The fourth industrial revolution (4IR) denotes a fusion of technologies that blurs the lines
between the physical, digital and biological spheres via technological breakthroughs in
different elds, such as robotization, automatization, Internet of Things (IoT), articial
intelligence, 3D printing, etc.
2 Kanban (Japanese:
看板
) is a lean method to manage and improve work across human
systems. A Kanban board is an agile project-management tool designed to help visualize
work, limit work-in-progress and/or maximize efciency or ow.
3 A smart contract consists of a computer protocol that seeks to digitally facilitate, verify
or enforce the negotiation or performance of a contract. These types of contracts allow
credible transactions to take place without the need of involving third parties as these
types of transactions are trackable and irreversible.
4 The Turing test (named after English mathematician Alan Turing [1912–1954]) denotes
a situation in which an AI is able to communicate with a human being via a text-based
interface in a way that is indiscernible from another human being.
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