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"Providing Freedom of Choice, Rather Than Working along Strict Lines": How IT Consulting Does (Not) Work

16/03/2021
Article for vc.ru.
The Russian IT market is relatively young. Clear standards have not been established yet in the majority of its areas, the IT consulting included. Basically, the term consulting is used for anything – audits, implementation support, or the stealth sales of IT products. As a result, the business has a vague idea of the IT consulting true value: sometimes our company is faced with the fact that customers do not understand the actual benefits of IT consulting for them. Let's figure out why use the IT consulting in business, how it works and how it doesn't work.

From IT audit to IT consulting

en: IT audit and IT consulting | kt.team blog
These two concepts are commonly confused. That's why sometimes business cannot decide, which service it needs at the current stage.

Our colleagues in the financial sector have agreed to clarify these two notions for us as market standards in this sector have been formed quite a while ago in terms of both legal regulations clients' awareness.

For example, the company is going to have a tax audit. To prepare for it, company invites an auditor who checks if the documents are correct, if the reporting meets the existing standards, if there are no grounds for penalties or presenting administrative (or even criminal) charges and comes up with the relevant changes to eliminate all inconsistencies in a short time. That's a comprehensive scope of the auditor's responsibilities.

Consulting is a more advanced activity. It is no longer aimed at correcting the consequences, but at building the right processes. How to avoid any mistakes at work? How to achieve business goals? How to rebuild the system to meet new conditions?

In the IT sector, the situation is exactly the same: IT audit is aimed at finding existing and potential errors, whereas IT consulting is aimed at achieving strategic and tactical goals within the digital transformation framework. With one reservation: in the IT consulting the achievement of business goals is considered from the point of view of information technology.

IT Consulting Levels

IT consulting includes three levels: consulting-audit (the management consulting), applied (or architectural) consulting, and strategic consulting. They differ in the level of consulting tasks set by the customer: from tactical and minor to strategic ones.
en: Levels of IT consulting | kt.team blog
The bottom level is the management consulting. An IT consultant assesses processes, identifies the weak points, and offers actual changes. The question they answer is: "How to adjust the existing processes to get a perfect result?" It can be the improvement of processes or systems, or the introduction of new functionality.

At the middle level – within the framework of architectural consulting – the main question is: "How to build or transform the company's IT architecture to make it most efficient in the context of existing business model and the company's goals?" The work is no longer at the level of individual processes, but at the level of the system of company's activities. The IT consultant identifies the owners of each business process in the company and the existing problems, checks how the IT architecture reflects the company's organizational contour, and makes necessary improvements to the existing architecture.

Strategic consulting is the upper level, the level of strategic changes and digital business transformation. At this level, the IT consulting works with strategic decisions and the restructuring of the business model instead of specific technologies.

The upper levels of consulting are less focused on details: in other words, specific systems that can be implemented in the company's IT infrastructure. Meanwhile, each decision or proposal has a stronger impact on customer's results.

It is worth mentioning that even at the strategic level of IT consulting a request like: "We have no idea what to do next, but we want to be the next Tesla, so write a development strategy for us" makes no point. To make the most out of IT consulting, a business must have a vision of its future and a general development strategy. A consultant only helps apply them at the level of information technologies and digitalization, define steps for implementing the strategy, calculate the possible risks of digital transformation and discuss the change of strategy according to the experience gained.

A Fine Line between Sales and Consulting

en: Fine line between sales and IT consulting | kt.team blog
In most cases, the IT consulting is performed by companies that also work as systems Integrators. This impacts the consultation process itself and its outcome.

Having mastered certain technologies, they often try to apply them to solve clients' business problems. For example, 6 or 7 years ago, we also tried to handle all clients' requests using Magento – a product we were proficient in at that point.

With a limited number of technologies in the toolkit, a consultant will be limited to certain solutions. And instead of carrying out an effective digital transformation, they can simply drive customer's business in a technological dead end.

A much better option is when an IT consultant has experience in using a wide range of technologies. It means they can offer different approaches that are relevant for customers business goals.

Another option is the chase after fashionable technologies. Nowadays, everyone's talking about block chain, computer vision, machine learning, so they're perceived as trendy and cool. Both customers and developers are very enthusiastic about them, but the actual number of successful cases is not that huge. Offering such technologies as part of the consulting framework, the IT integrator does not always assess their relevance for customer's business.
Consulting does not only explain what to do, but also why and what results you can have. If a consultant can justify their proposals and recommendations from the point of view of figures and practicability, it proves the efficiency of their work.

Must-have for a Consultant

en: Must-have for a consultant | kt.team blog
In IT consulting, reasoning and operation are implemented at two levels: the level of business goals and the level of applied solutions. This helps us infer which skills are necessary for a consultant.

The first is the business expertise. Any type of consulting is based on the understanding of company's strategy, tactics, business goals, and business processes. In this sense, IT consulting differs from classical business consulting only in terms of perspective: the former views the goals and objectives through the lens of information technologies. It evaluates the possibilities for business processes improvement using IT tools and offers technological solutions (at the level of specific systems or IT architecture) that will help implement the company's strategy. It helps to finalize the IT strategy.

The second core skill of an IT consultant is having practical experience, which helps them think of truly effective and viable digitalization scenarios. The practical experience makes people reconsider theмgreat expectations of technologies and teaches to assess the trends critically. An IT consultant has a clear idea of the pros and cons, the specifics of implementing each technology based on the actual practical experience, instead of some marketing slogans. Therefore, they can offer the solutions that are both cutting-edge and relevant.

An mportant remark: having extensive practical experience is not limited to having proficiency in working with a couple technologies.
The value of consulting is in the ability to see the problems and processes in the company from different angles, provide clients with the best solutions available on the market, and justify the choice of these solutions.

Where IT Consulting is Used

en: Where IT consulting is used | kt.team blog
It seems that in IT consulting it's the contractor who always takes the lead: they deal with the business processes, make proposals, etc. Nevertheless, thevresults of IT consulting depend on the customer as well.

You can get specific, working and effective proposals invthe following cases.
  • You have developed a business strategy and have a clear vision of how the business should evolve. Working on a common strategy is the task of C-level managers and owners: the strategy is based on their vision of business prospects, and they are personally responsible for the implementation results. Shifting this responsibility to consulting is not correct from the managerial perspective.
  • You have a list of business tasks formulated as "improve the X business process" or "increase the X indicator". In response to these tasks, consulting should offer specific step-by-step solutions, instead of merely suggesting something abstract and difficult-to-implement like "Be the next Uber". By the way, this is one of the markers for assessing the effectiveness of consulting.
  • You understand that consulting is not the same as development. You shouldn't assign the technological-level tasks, like developing a B2B portal or integrating a specific system, to consultants. Their target tasks are as follows: "We have problems in this part of the process: what is wrong, which changes in terms of IT will help solve the problem and improve this set of indicators?

Things to Remember

en: Things to remember about IT consulting | kt.team blog
IT consulting and IT audit are two different things. IT audit identifies existing and possible errors. IT consulting is aimed at achieving strategic and tactical goals with the help of IT solutions.

Also, you should distinguish between thevIT consulting and technology sales. Consulting helps you understand not only what to do, but also why and what results you can get.

There are three levels in the IT consulting:
  • management consulting answers the question: "How to adjust the existing processes to get a perfect result?"
  • architectural consulting answers the question: "How to build or transform the company's IT architecture to make it most efficient in the context of existing business model?";
  • strategic consulting answers the question: "How to form and implement the company's IT strategy?
An IT consultant must:
  • have business expertise, since IT consulting is a specific instant of business consulting;
  • have sufficient practical experience in using diverse technologies and platforms.
In order to make the most of IT consulting, the customer should clearly formulate their business goals and specify the weak points. The consultant's role is to offer appropriate solutions, so don't ask for a specific technology.

You won't see the benefits of consulting if:
  • your company does not have a clear business model or strategy;
  • a consultant cannot explain exactly how a particular business goal can be achieved from a technological point of view;
  • a consultant lacks the required expertise in the use of different technologies.
When choosing a contractor for IT consulting, don't forget that what your company needs is not a technology, no matter how attractive, trendy or widespread it is, but a solution to a specific task or problem.

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