What`s next? Where once painstaking detail work was necessary, today many consulting processes can be optimized with the help of computers.

Consulting 4.0 – Digitization needs expert networks

This time in the interview: Digitalization specialist Dr. Gerhard Nowak of ifp consulting Munich. The respected expert talks about the new challenges in the consulting industry and why a network of multiple experts is crucial for successful digitalization. Mr. Nowak also provides valuable tips on choosing the right management consultancy.

Mr. Nowak, buzzwords like Big Data, Internet of Things and operational excellence are on everyone’s lips – in the consulting industry as well. In this context, people often talk about Consulting 4.0, in reference to Industry 4.0. Digitalization has therefore not only found its way into companies, but is also revolutionizing the consulting industry itself.

In what way?

That’s right, the digital transformation is of course also affecting the consulting industry. However, two aspects must be kept apart.

On the one hand, the consulting industry must digitalize its own service. Where once painstaking detail work was necessary, today many consulting processes can be optimized with the help of computers. Of course, this benefits not only the consulting service itself, but also the customer. Because with the help of Big Data and tools, decisive conclusions can be drawn more quickly and implemented more effectively.

The second basis of the so-called Consulting 4.0 is the consulting topics themselves: the company’s own consulting process must undergo structural change and be aligned with the digitalized business models. This requires comprehensive, solution-focused, innovative and above all individual consulting approaches that combine 3 essential steps:

First, the digitalization strategy: Where does the company want to go? What is possible? Which strategy is suited best for the defined goals?

Only when the strategy is in place, further measures can be taken. Then it is a matter of establishing specific functions in the individual areas (administration, production, etc.) that serve to optimize.

Once this has been achieved, the next step is to develop use cases, possible application references that are precisely tailored to the company and its employees.

However, there is one important requirement to cover this holistic concept. A network of experts and specialists for a wide range of areas and requirements who can draw the right conclusions and derive effective measures from the analysis.

Maybe we could be a little more specific about that:

Where exactly are the differences to classic management consulting?

As I have just mentioned, consulting topics are in demand that are completely different from before. Digital transformation covers a wide range of topics, such as Industry 4.0 or Smart Factory, e-business, Big Data or the use of augmented reality. But also the development towards New Work requires new ways of thinking as well as expertise in agile working methods and change management. Precisely because the spectrum of topics is so broad, an overarching network of experts from a wide range of disciplines is needed here.

In connection with Consulting 4.0, it is often said that the classic dominant knowledge of the consulting industry is in danger. The background to this is that companies have access to an infinite wealth of information via the Internet.

You can get information yourself that only consultants used to specialize in. Whereas in the past external consultants were commissioned to answer specific questions, today the answers are much easier to find via wikis and Web 2.0. In addition, consultants with their analytical skills are increasingly competing with artificial intelligence (AI).

How do you see it? Is there really a direct competitive relationship, as is often suggested?

Or to put it another way: In which areas are specialized consultants irreplaceable despite AI?

Sure, there’s a lot happening in IT and there are numerous consulting approaches. However, this is no substitute for a qualified consultant. It always takes a specialist to draw the right conclusions from the data analysis and to recognize industry-specific correlations.

No two companies are alike. The digitalization of business models and companies therefore requires individual solutions – both in terms of strategy and software. Today, AI is nowhere near ready to develop individual concepts. Basically, a lot revolves around change management tasks, a core competence in Consulting 4.0.

All in all, that sounds like a lot of challenges for management consultants. You have already made it clear that a network of experts is important.

Why does the networking of external and internal experts play such an important role in Consulting 4.0?

Because in-depth specialist knowledge of digital transformation, operational excellence and the Internet of Things is becoming increasingly important. In order to offer companies of different sizes a successful, comprehensive consulting service covering the 3 levels of strategy, function optimization and use case, a dense network of experts specialized in the various areas of expertise is required.

What advantages does good networking in consulting ultimately have for the company?

A consulting firm or consultant with a good network is worth its weight in gold. The customer does not have to laboriously search for all the individual specialists, but receives everything centrally from a single source. This way, companies can be sure that all important aspects are really taken into account during the consultation.

However, it is even more important for a company to experience and live in the changes with the help of Consulting 4.0. The change management offered by high-quality consulting is crucial to the success of digitalization.

How do you assess the situation in Germany? Have German companies already arrived in the digital age?

Certainly, efforts to prepare for the digital transformation can be identified. In Germany, however, the corporate landscape is still in the early stages of digitalization. So there is still a lot of optimization potential that companies should definitely exploit.

The biggest difficulty I see here is the lack of a comprehensive digitalization strategy. Often, companies know they need to digitalize to keep up with the competition. And then they get into a hectic rush: that is, they digitize out of the blue, without a basic or secure strategy. This cannot work.

What should a company that wants to start digitalization look for when choosing the right consultancy?

In your opinion, how can a qualified and serious consultant be recognized?

This already starts with the appearance of the corresponding consulting company. Alarm bells should ring when it comes to exaggerated promises and ratio effects.

It is worth taking a closer look at the references in particular: Are there meaningful use cases that not only demonstrate the effective introduction of digitization measures, but also prove their positive impact? I’m talking about real reference cases here, not pilot projects.

In addition, it is important to pay attention to whether the consulting has holistic competencies to completely fulfil the 3 levels mentioned above. If this criterion is met, a successful start into the digital future is almost certain.

About Dr. Gerhard Nowak

Dr. Gerhard Nowak is a leading practitioner in the fields of business strategy, change management, operational excellence and business process improvement.

He focuses on the manufacturing, electronics and automotive industries, where he has extensive expertise in operational excellence, production footprint and supply chain management.