Digitizing the value chain: an opportunity for clever consulting companies?
Reflecting on this McKinsey report, there must be a huge opportunity in consulting industrial companies around digital changes:
The fact that 80% of company executives consider digital operations as critical driver of competitiveness, reveals its importance for the C-levels, as well as the assertion “digital is a senior leadership priority” (61%).
Interestingly, senior leaders are not happy with classical industry applications like computer-aided design (CAD), enterprise resource planning (ERP), and manufacturing execution systems (MES). Target for ameliorations are areas you would bet to find poorly addressed by today’s star vendors as Oracle and SAP: rigid, user-unfriendly, not really open / flexible.
Despite their rush, it is questionable whether they can catch up with the change, especially when comparing with modern apps.
With this in mind, I think that the market for flexible, good skilled consulting companies is growing in the direction of supporting industrial companies in six key areas:
Making up their mind on possible digital strategies
Identifying processes to ameliorate in a first run
Building the business case for resource allocation and the journey roadmap
Determining criteria of success to be used as measure for the initiatives
Running the technical projects related to the initiatives in close cooperation with the business functions
Learning and adapting to scale the initiatives.
Given the perceived strategic importance, in my opinion there are very few chances the CIOs are involved in strategic topics like assessing whether “digital” would represents a business opportunity or not – especially in companies where the CIO reports to the CFO.
Why is this the case? Because strategic discussions in this context include e.g. the overall company strategy, how to better engage with customers, how to digitally enhance operations, how to create a digital vision, etc.
Entitlement to this discussion requires two capabilities: (1) cross-functional understanding of business processes, and (2) personal standing – means being recognized as expert – in front of senior executives when talking about the above topics.
How many senior executives would see a CIO in this role? I rather saw a C-Team trusting a recognized consultant instead.