Posted , in Business model
Should you be scared of…Transparency Lab?
Today’s clients are faced with a dizzying variety of options when it comes to buying professional services. While the industry is still dominated by a handful of big firms, they are no longer the default option they once were. This is the second in a series of blogs that explores some of the newer businesses and platforms seeking to turn the industry on its head—and whether your firm needs to worry about the new competition. Click here for our previous blog in this series.
Who is Transparency Lab?
Dr. Jan van de Poll is a man on a mission. “Consultancy, as it currently exists, is an elite product for the boardroom: More people buy Chanel than buy consulting services!” he explained when we sat down with him recently. And through his company, Transparency Lab, Jan is out to change that.
Transparency Lab’s stated mission is to develop a new model of “automated consultancy”. And that means a lot more than simply applying the principles of automation to find cost efficiencies in project delivery. Jan believes that, if firms are prepared to jettison their sticky-notes, flip-charts, and slide decks and replace them with a truly digital-first approach, then they can create a wholly new consulting paradigm.
To that end, Transparency Lab has developed a data-driven SaaS platform designed to replicate, extend, and optimise the functions traditionally performed by human analysts and consultants. This includes: performance dashboards for managers and their teams; one-click reporting modules; fully automated personal improvement plans; and AI-powered data collection tools. All of these tools are designed to provide managers at every level of an organisation with a better understanding of the activity going on underneath them and to set targets for their employees—while also supporting those employees in meeting those targets by providing them with relevant advice and information at the right point in time.
And the team at Transparency Lab is constantly pushing the boundaries and finding new ways to apply their “automated consultancy” philosophy to real-world use cases. For example, they recently started providing “do it yourself” workshops through their platform—and they implemented a “nudging” tool designed to promote dashboard activity among teams that are using them. They are currently implementing a new portal to make it easier for customers to configure their data-collection surveys; and they have started to apply the same principles to developing internal-facing solutions for consultants. Their new “FunnelBoost” tool, for instance, helps improve firms’ visibility of the work that they’re doing across clients’ organisations.
While the company does work directly with a few corporate clients, much of its revenue comes through licensing its technology to consulting firms, who then incorporate these platforms into their delivery models. This model—selling technology licenses to consulting firms who then put their solutions in front of their own clients—is similar to that deployed by some of the workforce analytics platforms that have emerged over the last few years, such as Concentra or Qlearsite; although the scope of these platforms is much more limited. Across the world, enterprising data scientists and automation experts are starting to explore ways in which the traditional people-driven consulting model can be streamlined and improved through the application of new technologies.
Why do you need to know about them?
It would be easy to look at solutions like those offered by Transparency Lab and see them as just a way of sanding down the edges of the consulting model— improving project outcomes and making the delivery process faster and cheaper. And to be sure, that is part of the story. But the real promise of companies like Transparency Lab is something much greater than that.
The concept of automated consultancy has the potential to transform, at a fundamental level, the relationship between consultants and the clients they serve. Right now, consultants have to spend the bulk of their time on what could be broadly framed as “production” tasks—fact-finding about a client’s organisation, interviewing stakeholders, poring over data, planning workshops, and so on. But through the power of automation, it is at least theoretically possible that the balance between production and analysis could be flipped on its head.
And that in turn would give consultants the ability to engage with a much wider span of stakeholders. They could use all of that newfound time to deliver value up and down their clients’ organisations—no longer just engaging with the upper echelons. And if firms can deliver meaningful insights to clients while committing fewer resources to the task, then it would also become profitable for them to sell services to companies that have, until now, been priced out of the market. Less Chanel, and more Zara; still a quality product, but one that is more than just an aspirational pipe dream for the average buyer.
How can your firm stay competitive?
McKinsey and BCG probably don’t have to worry that automated consultancy is going to put them out of business overnight. But the big firms do need to recognise that Transparency Lab’s philosophy is one that’s rapidly gaining traction on both sides of the buyer/seller divide. It’s not uncommon to hear a client say some version of: “Look, you consultants are constantly telling us that we need to invest in digital transformation and automate whole swathes of our business. So why are you still using so many of the same tools and methodologies that you were fifty years ago?”
If you’re a consultant, you should expect to increasingly find yourself competing for contracts against competitors who have embraced the automated consultancy mindset—be they new businesses built around this concept from the bottom-up, or established firms that have been able to overcome institutional inertia and move with the times. And you may well find that those competitors are able to offer clients richer, more far-reaching insights or services delivered at a much lower cost; or in some cases, both.
Larger firms and those with a healthy number of in-house software developers may be able to build their own “automated consultancy” products—ones that are precisely tailored to the specific type of engagements that they specialise in. Indeed, we have already seen evidence that some firms have started to go down this route; and we wrote recently on this blog about the possibility that one of those firms will eventually try to establish a monopoly over the underlying technology infrastructure for next generation consulting services.
But for many firms, the more realistic option will be to create partnerships with companies like Transparency Lab, and to find opportunities to deploy their technology in the service of creating value for clients—perhaps with some degree of customisation involved. These partnerships could range from ad hoc collaborations to strategic partnerships; in some cases, firms may be able to develop entirely new service offerings by combining these platform solutions with their own in-house expertise.
However, a word of caution is in order here. Recognising a direction of travel is not enough in and of itself; the hard part is converting that awareness into energy and action. Too often, we have seen firms talk a big game about digitisation but fail to turn that into lasting change within their organisation. They’ll develop all sorts of fancy platforms and AI-powered tools—but when push comes to shove, their partners will fall back to selling what they know. The success of Transparency Lab and its fellow travellers might finally give the industry the impetus it needs to make a serious commitment to embracing the possibilities of automation.