Analysing the transformation of a consulting unit

A case study of transformation of a consulting unit creating value in closed market for one organisation

Abstract

This paper describes a transformation of a consulting unit between 2013 and 2015 as it transformed its business model, products, customers, production methods and over half of its personnel. 

The transformation is described using a concept for consulting business architecture that focus on knowledge creation core for consulting.

Results show that the consulting unit was able to execute a major transformation relative to its history by using the tool and managing several parallel incremental changes balanced through business, culture and information management.

Introduction

This paper provides an illustrative case study of a consulting unit in the journey of transformation. The study offers two snapshots, 2013 and 2015, along with that journey. The consulting unit in the case is operating in the closed market (no price competition) providing value to one customer (contract owner) and several clients (free of charge).

This paper aims to show how business architecture approach can be used in analysing the business situation, defining the end state for a transformation and providing key performance indicators throughout the journey.

The concept for the business architecture analyses is explained in a separate paper titled “An Architecture for Consulting Business”. Therefore, this paper goes directly to the case study and its results. The analysis approaches the transformation from six different viewpoints:

1. Business environment and forces of competition
2. Business model
3. Cultures within unit
4. Maturity of Collaboration
5. Maturity of Processes
6. Content management.

The views of one and two provide the underlying business context. The views of three and four expose the cultural aspects. Finally, the views of five and six analyse the process and information management. In a reflection of the TOGAF 9 framework, the cultural elements are additional whereas the technical views (data, applications, infrastructure) are not included in this case study.

Change in Environment and Competition

The consulting unit was enjoying a very forgiving business environment until 2013. There was a close and trusted relationship between the unit and the contract owner, who was in a senior position to order the clients to use the consulting services. During 2012 the situation changed as the contract owner altered and the new sponsor altered the rules of engagement. He required the consulting unit to provide services to each client as per need basis without authorial guidance and opened the environment for other units to compete in providing consulting. The change illustrated in Figure 1 meant that the bargaining power of clients increased. Other embedded consults became possible in the market, and there was a possibility to introduce substitutes for existing services. The business environment changed suddenly from the uncertainty of forgiving to the certainty of a competitive market.

Figure 1: Business environment and competition change in 2013

Before 2013, the unit had its consultants divided into fixed contracted tasks and similar functional groups. Each group was trying to get client commitment in their narrow areas of expertise. The business improvement was based on additional tasks that allowed the unit to hire people and create more revenue. As the mother company was making its profit based on a fixed percentage of total revenue, additional tasks were promoted heavily by management. This ended up with functionally separated consulting groups, low performing contracted tasks and aggressively growing additional tasks. When hierarchical support vanished, the old fixed groups found their clients not calling them anymore and they were struggling to create a new need for their legacy expertise.

Change in Business Model for Consulting Services

Once the change in the environment and market was understood, the consulting unit started the transformation. The first challenge was to gain the trust of the client with higher level consulting service delivered fast to meet the need and provided in a tailored manner to better fit the situation. As illustrated in Figure 2, the consulting unit decided to transform from classical consulting business model to a more flexible and scalable model.

Figure 2: Transformation of the model for consulting business

The Classical model is based on the principles of hiring talented and experiences people and providing them to clients as expertise or manpower. The optimisation of effort in this model means trying to provide as many consultants as long as possible. The client did not have much to say on the quality of talent or number of consultants engaged. During 2013, the unit had to close eight siloes of total fifteen fixed tasks.

The more flexible and scalable business model was determined to be the end state for the consulting unit. The flexibility was based on a structured process for knowledge creation including all in-house consultants. Furthermore, the unit seeks also the broader base of knowledge from a network of experts and experience. In the new model, each challenge is addressed together with a client in close co-operation applying the generic solution model but sustaining the confidentiality of the client. Value to the client is created more with knowledge transfer and providing solutions rather than embedding single experts. Furthermore, a unit established also a chain to provide information as a service through digital channels. The model builds on the strengths of different competencies, with multinational experiences to solve challenges in the more complex environment the client was facing.

Change in Organisational Culture

Since the organisational culture often nullifies all attempts to change the organisation, the analyses also included a simple chart based on the observation that humans form tribes within official organisations. These tribes tend to draw similarly feeling and motivated people together. Based on the first survey within the management and lead consultants, the starting situation included several subtribes that varied between levels one to three depending on their engagement with the client. The plan was to get the culture of the unit towards the partnership as a whole as pictured in Figure 3.

Figure 3: Situation and plan to change the organisational culture

In average the groups in the unit were defined as separate. Members of this subculture are passively antagonist. They cross their arms in judgement but never gain interest enough to make a difference. Their approach is apathetic since they have seen everything before failing. This culture does not recognise urgency or accountability. Some of the groups were observed to be personal. They think that knowledge is power thus they hoard it. They outthink and outwork their competitors on an individual basis. These people are drawn together since they best others and win being the smartest and most successful.

Since neither of the above subcultures do support well the aimed new business model, the goal for culture development was set to be at the level of partnership. This subculture has a tribal pride and always an adversary to enforce their pride — bigger the adversary, stronger the tribe culture.

Change in Collaboration Between Consultants

As part of the culture, the collaboration between talented people is one of the essential elements in consulting. Collaboration takes place both between consultants and with clients. Collaboration accelerates the knowledge creation as socialisation, externalisation and combination require collaboration between people and sources of information. The situation on 2013 appeared mostly at base level as illustrated in Figure 4: 

• The types of information in repositories mainly were administrative and structured. There were also unstructured documents but mainly divided into task or individual level folders.
• The scope of collaboration was to have contact between individual people. Asking advice from a colleague was not preferred act since it exposed the client relationship to “competitors” and revealed a “gap in individual knowledge”.
• The communities were ad-hoc based on hoarding the information rather than sharing it.
• The persistence of information was not acknowledged since it was managed at the individual level and individuals did not reveal their repositories to others. On the contrary, there was a fear that sharing their information its unreliability or outdatedness would be shown.
• The integration points for collaboration were non-existent since there was no process to create knowledge and deliverables to clients, no one assessed their validity, but the advice was delivered mainly based on individual efforts.
• The connectivity was between non-connected to point-to-point. The density of collaboration did not create value to the unit, groups but only to individuals.

Figure 4: The situation and plan to improve collaboration within consultants

The plan was to improve the collaboration to the level of knowledge repositories, which would create a significant advantage for flexible consulting. 

Change in Processes of Consulting

Processes allow the organisation to align the way every consultant to deliver the value and execute the business. Maturity is cumulative, which means that achieving integrated level there needs to be also aligned and local stages captured. Based on observations, the 2013 situation of process maturity in consulting unit was defined by a variety of personal methods without any unit level measures, and improvement was individualised except the administrative processes, which were following best practices and were established unit wide as described in Figure 5.

Figure 5: Situation and change in process maturity

The plan was to take the main business processes to aligned level and sustain the admin processes while making them leaner.

Change in Content management

Content management provides a base for knowledge creation and consulting business is mainly about creating new or applicable knowledge to the client. The three dimensions of content management showed that 2013 the consulting unit was in Figure 6 situation where:

• Competencies of people were not improved but ad-hoc, security was used to prevent feared sharing, and there was no performance measuring in place for content quality.
• The content was managed by individual people using their methods. Since there was no shared repository, folders were full of duplicates and mixture of deliverables and working files.
• The technology was supporting document management with network storage for group work, but mainly information was stored in workstation hard disks without backup. The email was used to share documents between consultants and client deliverables were done mostly by hard copies.

Figure 6: Situation and change in content management

The plan was to take the unit to enterprise level in content management so flexible use of knowledge resources would be supported.