Friday, July 7, 2017

Going Digital - Start with outcomes, then scale and price to perfection

Going Digital seems to be all the rage these days. Every strategy, management or IT consultant talks about "going digital". However, execution leaves much to desire. The problem is a poor understanding of the nature of digital disruption and a mindset that is based on decades of living in a different world.

For many consultants, digital is the new flavour of the month. Consultants and consulting organisations are stuck on billable hours or traditional mechanisms of generating income. A quick comparison of leading digital disruptors like Uber, Facebook and others is that these firms have spent the time to hone an offering and then define a business model that makes sense. Imagine if Facebook provided billable resources to help provide you a service.

The true mantra is two fold - providing a repeatable service and removing all middlemen. An Uber does not put a call to a human dispatcher to find and book the nearest cab for you. The software simply plots your location, location of nearest rides and books the ride on a first come first serve basis from a drivers perspective. It does this everytime, no matter where you are and who you are. Income comes from scaling the achievement of this outcome, to meet varied markets and remove/ automate all middle-men.

A more humanized experience would be UpWork that allows buyers and professional talent to showcase their talents and bid a price. Again, the middle man trying to link demand and supply as a faceless corporation is gone. The product or service could be serviced by an individual or a corporation. People don't care as the contract is in most cases deliverable based rather than hours spent.

Based on this trend it is easy to see how the future will move towards outcome based contracts rather than time based. That will be something that consultants and consultancies will have to become used to.

That may also be the key to solving to the problem. When a customer starts paying for an outcome rather than time spent, the really smart consultants will start looking at ways to achieve atypical outcomes using automation and digital enablers.

So as consultants who are trying to advise organizations to go digital, the easiest way of getting "there" would be to start defining outcomes for our customers and then designing digital enablers that can do so at scale and in a repeatable fashion. Finally, it has to be priced to perfection that cannot be matched through conventional means.