No Thanks, I want to continue reading.
It’s all about ‘Now’ – cabs pick us up ‘now’, we buy ‘now’ and sell ‘now’, we learn, transfer funds, download and do what not ‘now’. Demand, supply, logistics and everything rally for the time called ‘now’. When the pace has been set to create an on-demand economy, there are very few things that will remain unchanged. Consulting was holding its forte for a hundred years, but the forces of the new economy are beginning to disrupt it too.
Consulting for the New and Fast
New fast-paced businesses are putting across new demands on the table. They are highly ambitious, innovative and are early-adopters (if not creators) of technology. Their business models have the just bare minimum semblance to traditional businesses. As they discover the undefined turfs of their business, they need the best expertise from across the world. Traditionally, this service was provided by the big consulting outfits. But in this new era, they are often not the first choice.
The new breed of companies, small to medium in size, are smart, work on limited budgets but have great ambitions. They have to get their analytics and predictions right but they cannot afford to pay the skyrocketing prices that the consulting firms charge. They need information and analytics, which is in any case new knowledge even for the biggies of consulting. In that case, why should they not look out for experienced independent consultants or smaller firms? They often choose to hire independent consultants at competitive costs, which would, in any case, be at a fraction of the cost that the consulting companies would charge.
Disruptive undercurrents in large companies
To the advantage of consulting biggies, there is a loyal brigade of big corporates who swear by the names of McKinsey, BCG, Bain, and others. Large companies have traditionally been averse to hiring consultants and freelancers but we are seeing the grounds shift there as well. These large companies are being pushed to reinvent themselves by the non-traditional business approaches of newer, younger competitors. There is also greater pressure on controlling costs as business uncertainties increase. Both these factors are driving larger players too to explore newer models to get the external consulting support they need.
Why should the stalwarts of consulting reinvent themselves?
As the equations have started changing in large companies as well, an impending disruption is a matter of time. In fact, what’s at state is a big, fat opportunity, here’s why:
One, the number of companies that fall into the small and medium-spectrum is enormous. Entrepreneurship is at its flourishing best and the business opportunity of serving this segment is one that cannot be missed.
The second important call for change comes from the fact that an alternative ecosystem, that of independent consultants and more boutique firms, that is brewing alongside. If the consulting biggies refuse to adapt fast, the opportunity will belong to smaller units of expertise including the independent consultants.
Traditional consulting companies have their claim with their top-notch research capabilities. But technologies like Big data and Analytics technologies are invading this space a big way. The edge might be lost soon unless traditional consulting makes way for disruption.
Are we seeing the early signs of this disruption already?
Disruption has started to announce its arrival in various forms – through boutique consulting firms, through models like Eden McCullum and A-Connect that deliver consulting services through new hiring models of having lean in-house staff and maintain a robust network of freelancers, and finally through online marketplaces for consultants that has democratised access to talent like Hourlynerd and Flexing It. Eden McCullum, A-Connect, and 10EQS came into existence questioning the very legitimacy of consulting services being exorbitantly pricey. These companies assure top-tier quality engagements at reasonable costs which are delivered through their leveraging of independent consultants. They also did away with the ceremonial ambiguity attached to consulting and brought in much greater transparency. Businesses are starting to embrace their idea that combined expert service, greater clarity, flexibility, and affordability.
We are also starting to see another manifestation of the world-class service sans the price tag through another trend: Hire anyone, from anywhere through new platforms that provide access great talent. It is a democratic world out there with – HourlyNerd, MBA&Co, Flexing It and more. The buzz now is - hire anyone, from anywhere, for any number of days, for any number of projects. That’s total free economy. Might sound utopian, but that is how the world of independent and freelance work is evolving.
The freelance and independent consulting model works best for the on-demand economy. The pace of work is fast and there is a great access to quality resources. Also, there are more and more professionals taking up the route to independent working. Why? The opportunity of freelancing and project-based work is estimated to touch at a whopping $600bn -$1 trillion by 2020. Professionals who would never before have planned to become consultants have begun the move to become independent. 34% of the US workforce is freelancing and this is set to cross 50% over the next decade. The global online work industry - which is a subset of the freelance economy –is estimated at close to 2b USD in 2014 and expected to grow to 5b by 2018 giving it a CAGR of over 25%.
Though disruption in consulting is just in the making, the indicators and manifestations of disruption are loud. Today’s on-demand economy is pushing consulting to transform into new and robust ways. It wouldn’t be long before we see new strategies and practices taking shape. Until then, we will continue to witness the market of independent consultants flourish hand in hand with the open talent economy.