Management consulting is one of the sectors that benefits greatly from digitalization. Admittedly, management consulting is one of the sectors that sets up, directs and participates in the implementation of a large number of projects for the digitisation of companies in various industries (Werth et al. 2016). But what potential does there be for the consulting industry itself?

IT Consulting & Digital Transformation

Advice is a service that provides added value for the customer through specialist knowledge in one or more areas. The term consulting is the often used anglisism of counselling and therefore the synonym for consultants is often found (Hoffmann 1991).

Management consultancy, on the other hand, is a sub-area of consulting, which specialises in supporting companies in terms of organisational and porces optimisation (Hoffmann 1991). According to the Federal Association of German Business Consultants, this sub-area generated the majority of the €25.2 billion of sales nationwide in 2014 (Jörg Murmann 2015).

It follows from the previous definition that a management consultancy assists a customer in solving a complex situation (Hoffmann 1991). The question therefore arises: How does it come about that a customer commissions a management consultancy?

Complexity as a trigger for management consulting

The consulting situation   arises from the fact that due to the complexity of the problem or the situation, the customer is not able to adequately solve it on his own or with his own resources. For this reason, he turns to external experts, who are first to give him an overview, later to point out possible decision-making paths and then to assist him in the choice of solution strategy (Hoffmann 1991).

The complexity of a situation can grow beyond the customer’s capabilities, e.g. if the business environment changes rapidly or when changes within the company occur as a result of restructuring the organisation. The aim of the consulting service is to reduce the amount of information and, at the same time, the complexity of the problem in order to make the customer able to act again (Kubr 2002). This results in the two main tasks for management consulting: providing knowledge and developing solutions to business decision-making problems (Schrädler 1996).

Success factor: knowledge transfer

The transfer of knowledge in combination with the development of the solutions for the customer results from the interplay of knowledge, experience and information (Schrädler 1996). Kampe says the leverage structure can be reconciled depending on the scope of the project and complexity. By this he means that the relationship between the consultants of junior and senior consultants for optimal advice is decisive for success (Kampe 2011). The transfer of knowledge within the consulting firm is stored and supplemented in so-called knowledge management systems. In order to continuously supplement the knowledge, there is also close cooperation with science, for example in the form of workshops or further training (Alavi and Leidner 1999).

According to Kubr, the independence of the consultant as a characteristic of success is crucial for the success of the consulting service. In this context, independence is often associated with objectivity to the existing project. Kubr considers an objective and neutral view of the company’s internal events as particularly necessary in order to identify the actual problem with the customer (Kubr 2002). The independence of the consultant is also intended to counteract the “operational blindness” of the customer. Operational blindness in an organization has its origins through routine in everyday work. A company-blind employee considers his work to be good, although this is not the case, and feels no need for change, which means that the effectiveness of everyday work suffers. Operational blindness may increase if management has recognized it but does nothing about it (Hohlbaum and Olesch 2004).

Expertise and new ideas

Consultants have a certain distance from the customer’s internal processes and previous procedures through their external view, which allows them to get an objective impression of the situation. This is the result of an unbiased attitude of the consultant   towards the various stakeholders of the client, which makes it easier to work on solving the problem of the deadlocked structures (Schrädler 1996).

It can be assumed that the consultant has certain competences and resources that are not currently available to the counsellor. According to Kramer, the degree of the consultant is rather secondary, nevertheless, a large part of the approximately 86,000 consultants in Germany has a natural or engineering background, mostly in combination with business knowledge. In addition to the high professional requirements for consultants, the consulting firms also have a strong personality profile of great importance. This includes, for example, safe appearance, communication skills (best in several languages), cosmopolitanism, resilience and analytical thinking (Kramer 2006). It should be noted, however, that it seems that it is sufficient for the clients to pretend to be a consultant or to be employed by a consulting firm. Although there are many certifications and textbooks on the subject of counselling, there is no uniform vocational training in the true sense (Dr. Michael Zirkler 2005).

IT management consulting

According to the Association of German Management Consultants, IT consulting accounts for 21% of the turnover of €25 billion mentioned at the beginning of the chapter in 2014 (Jörg Murmann 2015). The above-mentioned characteristics of the consulting also apply to IT consulting.

The aim of the IT consulting is to strengthen the competitiveness of the service company through various project contracts. The tasks range from Internet and cloud services, such as e-commerce or in-house learning and information platforms, to the analysis and implementation of software and system solutions that cover the topic of IT security, for example (Kramer 2006).

According to Scheer, there is a trend of increasing self-performance on the part of the customer, especially in THE case of IT projects. As a result, large consulting firms have to adapt to a high degree of flexibility in terms of employee deployment or consider the possibility of using freelancers in a targeted manner. On the other hand, the customer’s need for increased self-control brings with it enormous potential for small consulting firms or start-ups that can operate much more efficiently and flexibly with flatter hierarchies and virtual forms of organization.

Management consulting in growth

Overall, Scheer expects strong changes on the advisory market (Scheer 2016) over the next 5 years. Due to the special characteristics of IT consulting, this above all represents an enormous potential for SME consulting and is highlighted in   another   article. The study on this is currently being prepared and approx.  mid-June 2017 in this blog. If you want to stay informed, you can subscribe to the newsletter. The text is an excerpt from a study I am currently conducting with a student.

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Reading tip: Consulting 4.0 white paper

Verwendete Quellen anzeigen

Dr. Michael Zirkler (2005): State-of-the-art of research on organizational consulting. In: Economics Centre, (WWZ), University of Basel. Available online at https://wwz.unibas.ch/fileadmin/wwz/redaktion/Forum/Forschungsberichte/2005/10_05.pdf.

Hoffmann, Werner H. (1991): Factors of successful management consulting. Wiesbaden, s.l.: German University Publishing House. Available online at http://dx.doi.org/10.1007/978-3-322-96413-7.

Hollow tree, Anke; Olesch, Gunther (2004): Human Resources – modern human resources. 1. Rel. Rinteln: Mercury-Verl. (The Compendium).

Jörg Murmann (2015): Facts & Figures on the consultant market 2014/2015. Hg. by the Federal Association of German Business Consultants BDU e.V. Online available at http://www.bdu.de/media/18888/facts-figures-zum-beratermarkt-2015.pdf, last audited on 09.04.2017.

Kampe, Tim (2011): Management of audit firms. Intellectual capital as a framework for strategic management in Professional Service Firms. Documents: Eichstätt, Ingolstadt, Univ., Diss., 2010. 1. Inaddition Wiesbaden: Gabler (Gabler Research Publications on Company Development).

Kubr, Milan (2002): Management Consulting. A Guide to the Profession.

Lünedonk & Hossenfelder GmbH (2016): The 25 leading IT consulting and system integration companies in Germany. Available online at http://luenendonk-shop.de/out/pictures/0/lue_listepi_it-beratung_f010616(1)_fl.pdf, last checked on 30.03.2017.

Samulat, Peter (2017): The digitalization of the world. How the Industrial Internet of Things turns products into services.

Scheer, August-Wilhelm (2016): Benefits driver of digitalization. In: Computer Science Spectrum 39 (4), pp. 275-289. DOI: 10.1007/s00287-016-0975-4.

Schrädler, Josef (1996): Management consulting from an organizational theory point of view. Gabler Edition Science. Wiesbaden, s.l.: German University Publishing House. Available online at http://dx.doi.org/10.1007/978-3-663-01195-8.

Sprenger, Florian; Engemann, Christoph (Ed.) (2015): Internet of Things. About smart objects, smart environments and the technical penetration of the world. Bielefeld: transcript (Digital Society).

Werth, D.; Greff, T. (2016): Digital Consulting. A model for small and medium-sized enterprises. In: IM+io Journal of Innovation, Organisation and Management (issue 1), pp. 82-87.

Werth, Dirk; Greff, Tobias; Scheer, August-Wilhelm (2016): Consulting 4.0 – The digitalization of management consulting. In: HMD 53 (1), pp. DOI: 10.1365/s40702-015-0198-1.

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I blog about the impact of digitalization on our working environment. For this purpose, I present content from science in a practical way and show helpful tips from my everyday work. I am a manager in an SME myself and I wrote my doctoral thesis at the University of Erlangen-Nuremberg at the chair of IT Management.

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