Why you shouldn’t write off agencies when it comes to digitalization issues

Only about half of the companies in Germany, which is one of the leading industrial countries in the world, have successfully digitalized to date. At least that’s what Deutsche Telekom AG announced in its digitalization index Mittelstand 2018. The issue of how one’s own company can not only withstand the process of digital transformation, but how it can successfully master it remains pertinent. The question arises as to who can support companies in preparation and implementation. Management consultancies as well as large or specialized digital agencies claim to be the right partner for this. As is often the case, one’s own requirements determine which type of partner is ultimately a better fit.

No vision, no digitalization

In order to make the right choice when it comes to digitalization support, an understanding of the need for change must first be developed. What sounds simple at first glance often feels anything but simple in practice. It all begins by defining a vision that is comprehensible to all stakeholders. It is simply about what the company wants to achieve with digital change. Economist John P. Kotter has therefore placed this necessity at the beginning of his eight-stage change process. Within this process, each company should ask itself whether its own business model is still relevant at all. Might it be necessary to completely rethink? Or is it just about adapting smaller processes?

A good example of this is the Japanese photo company Fujifilm. When President Shigetaka Komori realized at the turn of the millennium that digital photography would soon make photographic film irrelevant, he initiated a complete rethink of the company’s concept within a very short time. This was no risk-free undertaking, but Komori had a vision. Today, Fujifilm successfully uses the results of its previous chemical experiments to improve its photographic films as the foundation for its activities in the pharmaceutical and cosmetics industries. Now Fuji is one of the major players in the collagen industry, for example. Kodak, which was Fuji’s strongest competitor and the market leader at the time, only managed a comparable change a few years ago following painful insolvency proceedings.

The strategy factor: management consultancies as digitalization partners

The developed vision serves as the point of departure for selecting the right partner to implement digital change. Large, often well-known management consultancies such as the Boston Consulting Group, EY, McKinsey or PwC have their own expertise in all industries and markets. This makes them ideal partners for new business models, realignments and very large, long-term projects. This form of high-end consulting is therefore usually directed inwards, which means it primarily focuses on business processes and strategy. In the digital age, however, looking outside one’s own company to the customer plays a much more important role than it did just a few decades ago.

The customer factor: digital agencies as digitalization partners

Simple, intuitive processes, speed, added value and individually tailored content are just a few of the aspects that are becoming more and more important to customers. And these demands are continuing to grow due to the possibilities of digitalization. Companies have to take a proactive forward-looking approach to meet customers’ constantly changing demands. This is where digital agencies can contribute their greatest advantages in terms of digitalization issues, as they act directly at the interface with customers through competencies in areas such as service design and user experience. Their work focuses on customer centricity.

Digital agencies are also flexible. They can respond to trends in real time and thus ensure the continuous optimization of the provided solution. The starting point for this are agile methods like Scrum, Kanban or Design Thinking, which have their origin in the world of digital agencies. Technology is now generally developing more dynamically than corporate structures can be tailored to it and therefore it is precisely this ability of agencies that can provide companies the decisive advantage.

Consulting, creation and technical implementation from a single source

Digital agencies natively master the triad of consulting, creation and technology. Especially creation and technical implementation often give them an advantage over management consultancies. Although it is not uncommon for digital agencies to be bought up by consultancy firms, the “everything from a single source” principle can only be fulfilled to a limited extent in this way. This is because the different structures and working methods of the consultancies and agencies can sometimes lead to frictional losses in the course of a project.

The fact that agencies are required in the digital transformation process is also proven by corresponding market studies. According to the agency ranking by BVDW, a quarter of the agencies’ fee revenues are generated in the area of digital transformation and strategy. And this is a rising tendency.

Anke Herberner, chairwoman of the BVDW‘s full-service digital agencies expert group, knows: “The continued positive growth shows that digital agencies are needed by companies and this applies to an increasing number of industries. This year we have also asked the agencies for their assessments of various trends. This showed that new personnel is currently being hired, especially for the area of digital transformation.”

This is precisely why digital agencies are suitable partners for digital transformation

• Digital agencies act in a customer-centric manner with corresponding effects on companies’ business models and service processes.
• Agile processes enable faster adaptation to technological developments and rising customer expectations.
• Strategy, creation and implementation come from a single source without friction losses.

The bottom line

Business consultancies can help you with your digitalization process when it comes to strategy issues in a larger context. Digital agencies also look at the big picture, but are also able to provide you with innovative creations and processes. They also work in a customer-centric way. Ultimately, however, the question of the right advice for digitalization undertakings is always a question of the budget. After all, consultants’ fees can often be much more expensive than agency fees. Therefore, it is important to choose the suitable partner for your company based on one’s own vision to achieve the desired result efficiently