Virtualisation in management Consulting: Interview with Professor Volker Nissen.
This interview is the second in a series of high-level opinions from Academic and Practitioners about Virtualisation, Digitalisation, Trust in Virtualisation, and Communicating in a virtual environment.
I have the pleasure to speak with Volker Nissen, Professor at Technische Universität Ilmenau, author and editor of two relevant books on · Digital Transformation of the Consulting Industry 2018, Advances in Consulting Research 2019
Luca Collina: Good afternoon Volker, thank you for making time to accept the invitation to this interview. As discussed, I would like to ask you some questions related to my research on The impact of virtualisation on trust in the Management Consulting lifecycle.
Volker Nissen: Good afternoon Luca. Thanks for this invitation.
Luca Collina: The first question is based on the Virtualisation status update. What has changed in the virtual and digital world for consulting services since your publications and research?
Volker Nissen: More positivity among consultancy companies related to artificial intelligence and digital in other industries. The maturity level of consultancies is focused on supporting information and communication technologies (groupware and document management). Sales-oriented technology (social media and search engine optimization) are more extensively used. Other complex consulting technologies (process mining and analytical application) are used only by a minority of firms. The previous development started between 2017 and up today has slowed down.
This is creating two situations:
For the incumbent, not changing the business model in large organizations after many years of success, means that there is still no interest in changing their core processes and services, which impacts the core of their business.
Because of this, other consulting providers move forward, and new technology-based competitors appear in the market.
The incumbents don’t see any advantage, do not see the use of digital technologies as a means of increasing acquired orders as an economic benefit.
Despite the acceptance and professionalization of clients with digital consulting technologies, which was already proven in our 2017 study, the majority of consultants see a lack of demand and lack of acceptance as the biggest obstacles to virtualization.
The most common fear in the virtualization of consulting services is the loss of a trust-based consultant-client relationship. This includes the contribution of personal experiences of the consultant and a good understanding of the specific customer situation. In the sales or pitch and implementation phases, personal client contact remains indispensable, according to the consultants surveyed. Whether these figures have changed as a result of the findings of the Coronavirus pandemic remains an open question.
Luca Collina: I see, interesting. And do you think that COVID -19 has speeded up the utilisation of more technologies to be adopted for Managing consulting?
Volker Nissen: The Coronavirus crisis is certainly a boost for digitalization - not only in the consulting industry. What was unimaginable yesterday may be common practice tomorrow. It shows that many projects and appointments can be carried out remotely. And building interpersonal relationships and trust is also possible with digital formats. The current pandemic has already changed a lot in this respect, which is not yet reflected in our pre-Coronavirus survey data.
Luca Collina: Thank you, Volker. And now a little exploration of the management consulting market changes. What are your thoughts about the future of the consulting market: will the classic managing consulting disappear in the next 10 years?
Volker Nissen: The virtualization of consulting services can be an innovative strategy to ensure sustainable business success. The goal of virtualization is to sensibly reduce the personal interaction between consultants and clients by using information and communication technologies.
New digital business models of consulting often pave the way to more efficiency, flexibility and effectiveness of consulting services. Partially or fully virtualized processes and a digitally enhanced service portfolio often make it easier to meet changing customer requirements. At the same time, they enable cost-cutting potential and help improve the work-life balance of employees.
Digital technologies should be viewed more as an addition and not necessarily as a replacement for classical consultants. New digital business models for consulting can be introduced during virtualisation, which increases the efficiency, agility, reaches and effectiveness of services. By rethinking the delivery model of consulting, interaction with clients can be redesigned and new client segments can be won. In connection with standardisation, even the door to fully automatic consulting solutions and new services based on flat-rate payments opens in some areas.
In the end, there is a need to devise better ways to support clients’ business in an agile and value-adding way. Personally, I believe that over the next 10 years we will see a diverse range of more or less disruptive business models in consulting that rely upon scalable platforms and digital ecosystems. This decade will change consulting forever.
Luca Collina: Regarding client-consultant relationships with virtualisation, what do you think about building and maintaining Trust in client-consultant relationships now with virtual? what could the challenges and opportunities be in the next 10-12 months?
Volker Nissen: As far as risks are concerned, the virtualization of consulting services poses a particular threat to the trust-based consultant-client relationship. There are also fears that the individualization of services may be too limited, that coordination of efforts may increase and that IT security and data protection problems may arise. Overall, I believe that these potential disadvantages can (and should) be accounted for in the conception and implementation of virtual consulting services. For instance, it is a good idea to integrate clients early in the design phase of virtualized consulting products, just as it is a good idea to start a project that uses virtualization intensively by having a classical kick-off, where all project members meet and get to know each other before changing to virtual forms of collaboration and consulting.
Thank you Volker for this interview.
You are Welcome