Will Freelance Consultants Reinvent Management Consulting?
The evolution of traditional business consulting towards freelance consultants and online consulting platforms seemed very unlikely even five years ago. Today, it’s simply part of the world-wide shift to digital and technological systems. The flexibility of the gig economy, and the hyper-connectivity that allows for the almost instantaneous and frictionless spread of new ideas and innovations. In fact, freelance consulting platforms may be the disruptive technology that shakes up the long-established world of management consulting.
Professor Clayton Christensen is best known for his work on how innovation disrupts the tradition industry. He recently predicted that the consulting industry, which hasn’t changed its leverage-based business model in more than a hundred years. He said innovation in the areas of tactics and implementation and the competition from the freelance revolution would disrupt it.
Trends in Management Consulting
Consulting is one of the most mature sectors of the professional services industry. It has an annual global value between $250 billion and $600 billion. Globalization, mergers, changes in legislation and regulation drove it. Digitization is driving Growth.
In the 1960s and 70s, the main thrust of consulting was in strategy, market research and data analysis. Major consulting firms emerged, including the Top 3 (McKinsey, BCG and Bain) and the Big Four (Ernst and Young, PwC, Deloitte and KPMG). Their business models incentivized business development, generalist skills and the placement of as many consultants as possible.
Nowadays, there is a challenge from boutique consulting firms, online consulting platforms and freelancers. This is because they focus on agility to meet the new realities in the business world. They depend on their own deep expertise, and give real attention to client needs.
The Freelance Consulting Revolution
We might ask where all the freelancers will come from and how competent they might be, if the big-name prestige companies do not back them?
The truth is that the big consulting companies have spawned this supply.
In the first place, the large consulting firms employ hundreds of thousands of consultants all around the world, and they train them well. A staff turnover of some 18% to 20% per annum means that tens of thousands of experienced consultants are available. Many of them move into senior positions in the private sector. Many opt for short-term, modular and focused services from freelance consultants. They also turn to freelance consultant platforms that provide access to a wide range of specialist skills.
Secondly, the large corporations no longer have proprietary rights over consulting technologies. An important early contribution from the major consulting firms was the development of tools and frameworks to develop corporate strategies. These included SWOT Analysis and Balanced Scorecard, among others. These tools have now become part of the curricula of MBA and other business management programs. They are well understood in business and anyone can apply them. As a result, consulting has become demystified and small operators are competitive.
The gig economy is another driver for disruption of the consulting market. Companies are moving to the so-called liquid workforce. It is a flexible employment model with a combination of full-time, part-time and contract workers. Gig workers are an important source of hard-to-find skills. Individuals are drawn to this model for greater flexibility and lifestyle choices. Today, nearly a third of all workers in the US are part of the gig economy, and it is the fastest growing employee group in the EU. China, India, Singapore and Malaysia are important online labor markets in Asia.
The Impact of Technology and Digitization
Technological changes and the digitization of everything are pushing many companies towards consultants who are digital experts. Those who can assist them in navigating their way through fairly uncharted seas!
Digitization and technology are also disrupting the consulting industry. The hallmark of consulting used to be the ability to gather information about a client’s business, its competitors, its markets and potential markets, etc. Finally, to provide insight and advice on the findings, as a prelude to assisting with implementation of recommendations.
Today, in-house data, big data analytics and artificial intelligence make companies much more independent for day-to-day decision-making. This doesn’t mean that they don't need consultants. But they should be in more specialized roles, to apply the insights gained from the analyses. And consultants with specialized in-depth skills are now more widely available and can be hired independently. Especially if you are looking for them online, or if you are turning to platforms whose niche it is to connect experts with the people who need them.
The Benefits of Online Consulting Platforms
Benefits for clients
The cost of on-demand resources is one of the primary benefits to clients. Small consultancies, online platforms and freelancers don’t have the huge overhead costs of the larger firms, and don’t have to build them into their rates. Yet, because many of these consultants previously have worked in premier consultancies, they bring the same skills without the overheads.
The strength of large organizations is that they have frameworks, methodologies and assets in place to be used off-the-shelf or adapted for a number of clients. However, this can also become a vulnerability – and is an area where more agile and focused consultants can make inroads. Small organizations can compete with larger ones by being obsessed with satisfying the client’s real needs and building tailored interventions around them.
Hiring consultants isn’t always about cost. It’s about finding the right people for the best results. Choosing an outsourced resource is much the same as choosing an in-house employee: you’re looking for specific skills and experience together with a good people fit for your team in terms of personality and style. So, the process of selection should be similar – ask what work the agency has done before, ask for CVs of the consultants being put forward, look at references from others, interview them, perhaps set up an assessment of some kind.
However, freelance consulting platforms such as Consultport pre-screen consultants and ensure that they have a range of in-depth expertise that can be matched to your needs. This significantly reduces your risk and time in finding the right resources.
Benefits for consultants
In consulting, reach is crucial. It is no longer good enough to develop a few local clients and depend on them to market you via word of mouth. Online freelance platforms provide this reach, and they can connect individual consultants with potential clients. While many freelancers want the benefits of flexibility and freedom from corporate constraints, the need to constantly look for new work can be a distraction and a risk. Having access to the business expertise of a consulting platform means that they also have access to the latest technologies and specific industry knowledge, as well as having centralized systems for administration, project management, quality management and the like.
Any port in a storm may be true for some of life’s difficulties, but for navigating the turbulence in the consulting industry we might say that online consulting marketplaces like Consultport are the best port in a storm.
You can access the best management consultants and digital experts through one easy-to-use platform, be assured of top-level expertise, fast and simple focus on your needs and quality assurance and admin back-up that allow you to focus on your project.
If you’re a consultant, the Consultport platform will give you a choice of exciting projects, access to a network of pre-selected clients, flexibility to fit into your lifestyle, and continuous personal and logistical support.
So, will consulting platforms disrupt traditional consulting?
According to Clayton Christensen, “We’re still early in the story of consulting’s disruption…” However, the technology driving the trends and the quest for flexibility, are there for all to see. Freelance management consultants and online consulting platforms certainly seem set to rock the consulting boat!
