The End of Traditional Consulting?
As we’ve already seen with law firms, the rise of the expert economy and on-demand talent networks is beginning to disrupt traditional consulting.
Management consulting firms have traditionally followed the same business model as big law firms: lean on young associates, produce top-quality services, and tackle large-scale projects at a premium price.
It’s been the fundamental way of doing business for decades, but it’s one that big consulting firms are beginning to change in order to compete with on-demand expert networks.
Why Expert Networks Are Gaining Market Share
Big consulting firms offer some excellent advantages in their size and capacity for large-scale analysis and advising. But on-demand expert networks, such as Graphite, offer an ideal option for smaller projects at a faster pace and more affordable cost.
As industry analyst Sanford Bragg explained in a recent Civic Enterprises report, “If I’m trying to figure out how to restructure my business, I’ll probably go to McKinsey or another consulting firm. But the smaller and more defined the project, the more I might turn to an expert network.”
This is because on-demand experts often have more hands-on experience in solving specific business problems and implementing those solutions.
Many of them already have backgrounds as former consultants at big firms such as McKinsey, Boston Consulting Group and Bain & Company, but they’ve also gained hands-on experience while working in the corporate world, in investment banking, or as independent consultants.
This creates an ideal combination of big firm experience and subject matter expertise. It allows them to analyze and solve problems and provide industry-specific expertise in areas such as market analysis, new product development, sales and marketing, mergers and acquisitions, accounting, IT and more.
Independent consultants and experts can provide all of these services without the high overhead costs or potential limitations of younger and less experienced teams from a big consulting firm. For example, at Graphite, pre-vetted and top-tier consultants are available at rates of $75 to $200 per hour, which represents a savings of 60% compared to the typical costs of big consulting firms.
How Traditional Consulting May Be Impacted
The disruptive advantages of on-demand expertise are forcing big firms to take notice, and some Harvard industry analysts have predicted that alternative staffing and alternative professional services firms will cause a major disruption in traditional consulting. In fact, they predict that some firms may ultimately be toppled by these developments, while others will use them to their advantage and be strengthened.
We’ve seen some of this first-hand at Graphite. Many consulting firms are already using our service to hire independent consultants to flexibly fill talent gaps, address specific client needs, and scale up for larger client engagements. For these forward-thinking firms, on-demand talent isn’t a threat but a competitive advantage.
Thus, on-demand expertise could mark the end of traditional consulting firms for some, but it might be the beginning of a brighter future for those who know how to leverage it.
A case in point is PwC and its own move into the on-demand talent space. In 2016, PwC launched a new platform called “Talent Exchange,” geared toward its consulting business.
The Talent Exchange is a marketplace where freelance workers can upload their resumes and apply to work on projects for PwC clients. If applicants are deemed qualified by PwC, they are invited to bid on specific jobs by submitting their per-hour rate. PwC then decides which freelancers get the job.
It’s all part of PwC’s effort to leverage the rapid growth of its consulting engagements. According to the Wall Street Journal, global revenue from consulting and other advisory work at PwC and the other Big Four auditing firms has risen 44% since 2012. This is in stark contrast to a meager 3% revenue growth in auditing at PwC, Deloitte, EY and KPMG.
Turning On-Demand Expertise into a Growth Strategy
As consulting and auditing firms look to keep pace and maximize these growing opportunities, independent experts and consultants are an ideal way to meet demand. But firms don’t need to build their own talent platforms to realize the benefits.
Firms of all sizes can use Graphite to find the consulting talent they need through an existing platform with flexible arrangements, secure billing, and a fast-growing network of over 5,000 pre-vetted and highly qualified professionals.
Our Graphite team can work closely with firms to develop an effective on-demand talent strategy and curate lists of pre-qualified and recommended candidates for specific needs.