The Future of Consulting Has Arrived – The Online Consulting Marketplace
Sometimes change creeps up on us without us realizing how significant it is. I think that the online consulting marketplace may be one such change. It might indeed have ushered in the future of consulting.
Technology has dramatically changed so many aspects of our lives. Do you remember when you watched movies at a theater, bought a newspaper to read the news, went to the library to research a project, bought reels of film to take photos, had a wristwatch to know the time – and had a telephone handset on the hall table? Maybe you’re too young to remember all of these – but it’s hard to imagine life without our current multi-purpose mobile phones!
The same is true for financial services, travel agencies, job recruiters, taxi drivers, postal services, and others. None of these industries has vanished. But all of them have been significantly transformed. Probably what has changed most is the way we think about them and use them. We now routinely order goods and pay for them online. We book our flights, call an Uber or Lyft, send letters via email, and post our CVs to apply for jobs online.
Perhaps this is a good time to look more closely at what is happening in the consulting industry. To study the impact of online consulting platforms and freelance consultants in the so-called online consulting marketplace?
The Growth in Demand for Specialized Consulting Services
The compound annual growth rate (CAGR) of the global management consulting market between 2014 and 2019 was 8.6%, reaching a value of nearly a trillion dollars. The prediction was that it would grow at a CAGR of 10.6% to reach almost $1.5 trillion by 2022. We can factor in the impact of COVID-19 into these predictions.
However, an interesting statistic is that small, niche consulting businesses were growing at close to 18%. This is a significantly higher rate than medium to large firms. Companies are looking for more specialist offerings and a more intimate client-consultant relationship. Many smaller and family-owned businesses are turning to consultants to help them navigate the changing business environment, brought about by the digitalization. These smaller businesses are likely to work in unique market niches and need more than what a standard management consultancy can offer. At the same time, they have smaller budgets and are generally not able to afford the larger firms' rates.
Larger corporations are likewise moving to a more specialized approach to digital project management consulting, breaking down needs into more specific niche areas. These are such as bringing in an expert on customer service or digital project management rather than someone from a more generalist consultancy firm. Similarly, there is a move to industry niche consultancy. There are now multiple demands and nuances in every industry that require consultants with extensive and specific experience to handle.
This is good news for freelance or independent consultants. It leads to a revolution on its perception. How are they utilized through the help of online consulting.
A New Definition for Freelance Consultants
We have perhaps had certain stereotypes when we have thought of the terms self-employed, entrepreneurial, freelance, and consultant. However, today it is difficult to separate them.
Freelancers can be defined as self-employed and not committed to any employer in the long term. Did you know that the word came from the “free lances” described in Sir Walter Scott’s novel Ivanhoe, in 1820? These were soldiers, armed with lances, who did not owe allegiance to a particular lord and hired themselves out to the highest bidder.
Traditionally, we have associated freelancers with creative professions (music, writing, photography, translating) and IT development and web design. Freelancers have also been associated with millennials wanting more of a work-life balance. They may even have been stigmatized as being lesser-skilled, for low-end roles.
They may provide something tangible – an article, a website, or a software application. Alternatively, they might deliver a performance – as by freelance musicians – or temporary service, such as a freelance social media marketing manager. In general, they are paid for providing some sort of finished product or service. They are not paid to be present for certain working hours.
What’s the reality?
Today, freelancers are increasingly highly skilled, experienced, and professional. They have chosen not to owe allegiance to one employer and want the flexibility that comes with self-employment. Many work from their own homes or offices; others work at a client’s workplace for the project's duration – or even on a long-term basis.
Freelancers include consultants who traditionally have supplied strategic, advisory, planning, or project management services. Most have been employed within consulting firms or in senior positions in business. They are skilled and well-trained, many of them in specialist niches and industries. They are increasingly turning to the freelance or independent models and are more entrepreneurial than they were in the past.
These really are the new free lances: skilled, well-armed, and ready to provide their services where they will achieve the maximum return for themselves and their clients.
Agility is Driving Transformation in Consulting
Changes in clients’ requirements and expectations are driving the future transformation of the consulting industry.
Freelance Consulting Platforms
This new agile approach to staffing may sound obvious. However, many companies still wonder how complicated it might be, how long it might take to find and hire the right freelance consultant, what it will cost, and whether they will find someone who will understand the client's business quickly and deliver work of high quality.
These are all legitimate concerns.
But, as technology is changing the business landscape, it is changing the consultant hiring landscape. Online consulting platforms have become the ports of call for freelance consultants and clients alike. According to Payoneer, the international digital payment company, up to 73% of all freelancers have used these platforms to find clients. Nearly a third of the Fortune 500 companies now use them, including the best-known ones such as Upwork and Fiverr. In one survey, nine out of ten hiring managers said that they would rather work with freelancers than with temporary hires through a staffing firm. One reported a 52% cost saving and six times faster onboarding process than the managed service provider model. The head of Innovation and Advanced Manufacturing at GE says, “Our customers engage with talent networks in new ways – often accelerating programs by at least 50 percent and increasing productivity and cost savings.”
However, as businesses are looking for more specialized services, smaller, niche platforms that cater specifically for freelance consultants are coming to the fore.
Consultport is a good example. This is a smaller freelance consulting platform, focusing on management consulting and digital expertise. They connect skilled professionals with clients, pre-screening both parties, ensuring that consultant skills are verified and clients are legitimate, thus assuring both parties. When a client registers a project on the platform, Consultport searches for the most appropriate consultants and presents a shortlist to the client, who can then interview and select the best candidate. The platform undertakes all the administration around hiring, invoicing, payments, and even quality management. And it provides a network of consultants - exactly what agile staffing requires.
Has the Future of Consulting Arrived?
There is still a place for traditional consulting firms. But changes in the workplace, driven by technology and the need for agility, are leading to a very different kind of demand for consultants. The knowledge industry is moving online, and the online consulting marketplace is the place to find a growing workforce of independent professionals. There is no doubt that this is the future of work – and it may well be the future of consulting.