Internet agencies, please take more initiative in the digital transformation!

A few days ago, I saw the poster below. I reflexively tweeted it with a rather cynical comment. Too often I experience traditional management consultancies as mills that grind extremely slowly. Encouraging the customer to be idle. Transformational doing? How paradoxical to advertise this when you work almost exclusively theoretically and hypothetically. And then leaving the project ship when you have to decide between 1 and 0. Decide, code, develop.

(Reading time: 4 minutes)

Spontaneously you want to shout to them, go to SAP and learn how to do this airport advertising thing properly(The Best-Run Businesses Run SAP).

Maximum buzzwording meets peak ridiculousness. #army#of#shenaniganspic.twitter.com/By6c4Xru5D

– Alain Veuve (@alainveuve) September 1, 2015

 

Possibly more than a meaningless slogan

Later I have my doubts. Maybe that’s what they really mean. Isn’t there actually a movement by the larger management consultancies towards implementation? And I mentally review the experiences and market events of the last few months just to gain certainty. Yes, that is the case. Would you like an example?

KPMG Crimsonwing

In February of this year, KMPG acquired the digital service provider Crimsonwing, which plays a major role in the enterprise sector with Magento and other popular systems such as MS Dynamics. The synergies are obvious. While KPMG already has the client relationship, it is usually a simple matter to transfer the implementation to the group’s own subsidiary. And also quite legitimate. This is what KPMG writes in the press release on the acquisition:

“The acquisition is consistent with KPMG’s strategy of building an advisory practice which combines business expertise with the underlying technology capabilities required to implement business solutions.”

From conversations with representatives of other medium-sized management consultancies, I know that this is definitely a much-discussed topic internally: how can we capture a larger share of the entire digital value chain? Going into implementation is not only obvious, but also the right thing to do.

Agile methods complicate the traditional consulting business

This intention is also fueled by the increased use of agile project methods. Driven by market pressure, customers want to get to implementation faster. This is often at the expense of extensive concept and consulting phases, as a large part of this detailed concept is developed on a sprint-related and situational basis. And usually with the technical service provider instead of the management consultancy. I experience this in almost all of our projects. It’s no longer about pure implementation. Even in really large projects.

Of course, this hurts the management consultancies, because it is precisely this solution specification that was/is traditionally good business. And for such projects, it was/is possible to charge “cheap, young vegetables straight out of university” (consultant-speak for employees who gain their first experience in the private sector as graduates) over a longer period of time.

Sitting in a glass house…

When I gave a keynote speech last Saturday at the TYPO3 Camp in Munich on the topic of “Digital transformation: What’s it to us?” , I addressed this very issue. And one of the key messages I gave the audience was that we (i.e. the agencies) shouldn’t let them take the butter off our bread. In other words, we should not recklessly hand over our implementation skills to management consultancies.

After the talk, I was approached by an audience member who said that we internet service providers had done the same thing a few years ago with the advertising agencies’ consulting business, which was of course true. Caught on the cold foot like that, I could only parry with the less than objective reply that, as an agency representative, I was biased and thought it was good. Ouch.

It’s a jungle out there!

Well, it is a market. And everything is permitted within the legal and moral guard rails. That’s why I think the efforts of the large management consultancies are legitimate for the time being. However, I expect that such a path will be rather rocky. The standing of management consultancies outside of strategic consulting is too poor for many in middle management.

Opportunities for agencies

What remains for the agencies are basically two opportunities. One is the sale of the majority of an Internet agency to a management consultancy at a good price. Of course, you have to have done your business homework. Or, on the other hand, a stronger attack on the consulting part of the project business. The chances are good of being able to take a slice of the cake, especially with SMEs.

But that doesn’t mean you have to call yourself a “full-service agency”. By the way, most customers have now realized that you can’t provide a full service with <200 employees. No, it is completely sufficient to simply deliver initial results as early as possible using agile methods and technical expertise. Because that’s what most customers want.