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Consulting Disruption: How to Stay Competitive in an Ever-Changing Landscape

Consulting Disruption: How to Stay Competitive in an Ever-Changing Landscape

This is a guest post by Sebastian Sager, CEO and co-founder of CONSULTED

Companies are getting smarter and they need external advice now more than ever to stay competitive. The old fashioned ways of getting advice just aren’t working anymore and change is coming. Businesses are beginning to look for more flexible options and solutions are appearing at a growing rate.

Change is coming and businesses should care because those companies that adapt quicker will be more competitive and better positioned in the long run.

The clock is ticking…

The Way Things Were Done

Consulting companies, both big and small, need to sell longer projects with larger teams in order to justify the time spent by partners selling their services. If they sell anything short of that, it would simply not be economical to have the partners fly out to clients selling week after week.

And there is nothing wrong with that.

This model works well for both consultancies and companies getting the advice, but it only works with long projects and large teams to address the challenges.

In reality, what companies increasingly need is very different from this current model – they need more flexible options. Some companies are already aware of this change, but most have yet to realise what is happening in the industry.

Change is Coming

Traditional consulting worked really well for corporations a decade ago, but three key things have changed that have made companies look for a different kind of consulting.

1. Companies are much smarter

Hundreds of thousands of MBA graduates and former management consultants have made their way into the corporate workforce over the past two decades. Companies all over the world now have all the tactical knowledge and ambition available internally to solve problems in a structured way. Thus, the need to engage external consultants for their brain-power is decreasing.

2. Companies are doing more projects

We are not only living in a globalised world, but an increasingly uncertain one. More uncertainty is associated with more risk, not only to the underlying business model of a company but also to the tactical plans for the foreseeable future. As a reaction, companies do more projects in shorter time spans. This happens, because what was quite predictable is now uncertain and that change requires constant re-evaluation of solutions.

3. Companies are doing more projects internally

Partially driven by a smarter in-house workforce, businesses are switching from a ‘buy’ strategy to a ‘make’ strategy. They can build up greater institutional knowledge if they solve a problem themselves. And that doesn’t only grow the intelligence of an organisation, but comes with major cost savings.

Choosing the Lesser of Two Evils

Despite having the in-house capability, a preference to handle projects internally and the added benefit of cost savings, many companies are still engaging consulting project teams. Why is this?

Companies often lack access to the data or expert knowledge that can make a mediocre project a great one. This access has typically come through consultancies. As a result, companies have to choose between two less-than-ideal options:

Option #1: Accept the fact that you need to pay premium prices to a consultancy for activities they could actually have done themselves, just to get access to that missing piece of data or knowledge.

Option #2: Do a project internally and either forgo the necessary information to make an educated decision or conduct time-consuming searches for the right information.

Both options result in less than favorable results. The first costs an arm and a leg, and the second either leads to delayed projects or completed projects that are based on partial insights.

Disrupting the Status Quo

Real alternative solutions that have been built to empower internal project teams are emerging across the professional services value chain. They provide on-demand access to data and knowledge traditionally bundled within more expensive offerings. This is exactly what companies have been missing in order to tackle their problems in-house.

There are several companies and services available that are disrupting the status quo, giving internal teams options to approach projects. Here are some of the different options emerging to address companies’ need for high quality information and advice:

1. Access to data

Primary research can be done with new tools like VB Insight, a marketplace for reports, and Workio, a crowd-sourcing platform for data. Companies can also get data analysis with options like Experfy, a crowd-sourcing marketplace for data analysis.

2. Access to knowledge

New companies like CONSULTED, the organisation I co-founded, provide on-demand access to hundreds of experts with knowledge across a wide range of industries through an online marketplace. Basically, it solves the “wouldn’t it be nice if we could talk to someone who actually knows” problem.

3. Access to leaner traditional consulting

Getting small projects and sub-projects done remotely is fast becoming a cost-effective option. For example, 10eqs answers research questions within a few days. Freelancer platforms are also becoming more prevalent. HourlyNerd is one option that provides access to MBA students and young professionals to complement internal teams or do independent small projects.

New services will continue to emerge. Companies that have been outsourcing projects, but prefer to do them in-house, will continue to have more options. And companies that have been lacking the resources to address their business problems appropriately now have a number of tools at their fingertips.

Why Companies Should Care

By complementing internal teams with on-demand access to data, knowledge and leaner traditional consulting, companies increase their competitive edge and can – for the first time – address many problems conclusively.

The challenge now is getting companies to alter their behavior when for so long inertia has forced them to settle for suboptimal solutions.

With such a low hurdle to accessing these new tools, staying ahead of competition has never been easier. But it won’t be long before the competition realises this as well. Businesses should start thinking about how to optimise their knowledge from within to complement the external tools now available. There is no excuse for inertia when so little needs to be changed to have an immediate impact.

About Silicon Allee

Silicon Allee
Silicon Allee is an independent English-language news website which has been covering the startup scene in Berlin and across Germany since June 2011. It is foremost international news source for the exploding startup scene in the German capital.

One comment

  1. Great article, Sebastian! It really nails some points with regard to the changed buying decisions at companies.

    What about the disruptive force of new software solutions & tools, which are designed to (partly) automate repetitive processes/analyses (which typically are performed by consulting firm’s analists) ?

    We think that small & large consulting firms will form alliances with niche software vendors to complete/enrich their offering towards corporate clients. See also this article http://hbr.org/2013/10/consulting-on-the-cusp-of-disruption/

    @Sébastian: I’m interested to hear you thoughts about that. Maybe you know some examples too?

    Nicolas Christiaen
    - CEO of DiscoverEdge & Working Capital Manager
    - http://www.discover-edge.com

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