Guide
Digital transformation services is one of the most searched and least defined phrases in consulting. Here is what the term actually covers, what each part should cost, where programmes go wrong and how to pick a provider who will still be accountable after go live.
By Christopher Fagan, Managing Partner, PEF Consulting Partners
Strip away the brochure language and the services fall into eight parts: a strategy and roadmap that says what the business is trying to become and in what order; operating model and process redesign; the core systems, meaning ERP, billing, CRM and the platforms around them, from selection through implementation; data and analytics; automation and AI; cloud, integration and the retirement of legacy systems; change management and adoption; and the programme management and assurance that holds all of it together. A real transformation uses most of these. A single system project dressed up as a transformation uses two.
The honest point is that very few providers do all eight well. The agencies that design beautiful apps are rarely the firms that can run an ERP programme, and the systems integrators who can run an ERP programme are rarely the people you want designing your operating model.
The big consultancies bring scale, a bench and alliances with every major vendor, at the highest day rates and with the youngest people doing most of the work. Systems integrators and vendor partners bring deep product knowledge and a commercial interest in the licence, which is useful when you have already chosen the platform and a problem when you have not. Digital agencies are strong on customer facing design, web and mobile and weak on the systems behind them. Independent consultancies work client side with senior people, no vendor ties and no bench of two hundred developers, which makes them the right choice for shaping, running and assuring a programme and the wrong choice for building a platform from scratch. Most successful programmes use two of the four, with one of them clearly in charge.
Day rates run from around £800 to £1,800 for experienced independent and boutique consultants and from £1,500 to well over £3,000 for senior people at the large firms, with implementation partners typically charging £800 to £1,800 depending on the role. A strategy and roadmap phase is usually a matter of weeks and a five figure sum. A mid market transformation built around a new ERP or billing platform typically lands between £250,000 and £3m all in, including licences, and enterprise programmes run to tens of millions. The numbers people forget are the internal time, the data cleansing, the change work and the second year, when the platform has to be run, upgraded and paid for without the programme team. Our ERP cost guide, linked below, sets out the ranges by company size.
They start from the technology rather than the outcome. The business case is approved once and never checked again. The vendor or integrator ends up setting the scope because nobody on the client side owns it. Change management is left to the final quarter. The data is assumed to be clean until the first migration rehearsal proves otherwise. None of these are technical failures, which is why changing the technology rarely fixes them. On a national EV charging rollout we recovered, the finance system migration landed 39 days ahead of forecast once the client side owned the plan. The technology had not changed; the ownership had.
Ask who exactly will do the work, by name, and how much of their time you get. Ask whether they earn anything from the software they recommend. Ask what they have delivered at your size and whether you can speak to a client whose programme went wrong, because every honest provider has one. Ask what is fixed fee and what is time and materials, and what happens to the fee if the date slips. Ask how benefits are measured after go live and who signs off that they landed. The answers tell you more than any case study.
PEF provides the client side version of digital transformation services: a short diagnostic, a roadmap you can actually fund, the programme leadership to run it and independent assurance when someone else is running it. We hold no reseller agreements, we work in fixed fee phases and the people you meet are the people who turn up.
Related reading: digital transformation consultancy, business transformation consultancy, what an ERP implementation costs in the UK, how to choose a transformation partner, the free ERP readiness check.
IT modernisation replaces old technology with new technology and leaves the business doing the same things faster. Digital transformation changes what the business does and how, using technology as one of the levers. If nothing about roles, processes or customer experience changes, it was modernisation, whatever the programme was called.
A focused programme around one platform or one function takes nine to eighteen months. An enterprise wide transformation with new core systems and a new operating model takes two to three years, delivered in stages that each release value. Anything promised faster is usually a systems project with a new name.
Not always. If you have a transformation director who has done it before, a programme office and time, you can run it yourself. Most organisations have one of the three, and the cost of a programme that drifts for a year is far higher than the cost of experienced help at the start.
The outcomes and how they will be measured, the sequence of changes with dependencies, the systems decisions and when they must be made, the people and change plan, the budget by phase and the governance, including who can stop the programme. A roadmap without dates, money and names is a vision statement.
If you are weighing up digital transformation services and want a plain view of what you actually need, a short confidential conversation is the right place to start.