The future of consulting

By Kevin Pittman

The future of consulting

This new online venture was fully capital subscribed within days of its seeking start-up funds.  It epitomises a wish to break through traditional models of securing the skills you need when you need them – whether you’re a business or an individual.

Freelancer

Of course, this website is currently nonsensical.  As many “freelancers” who want to bid for your business can, and there is no sensible way of distinguishing between highly skilled people and also-rans.  Also, of course, most of the freelancers will be the latter – since bidding for business just pushes down the rate one gets paid.

But what does it say about the future of any kind of work that can be readily done online by someone in Mumbai with a freshly minted MBA?  If local consulting practices by the big firms are anything to go by, there is going to more of this to come. Big firms seem to be doing  very well as it is by charging above market fees for the services of relatively inexperienced Powerpoint editors.

Breaking business models

Over the past ten years, we’ve seen more and more established businesses and business models come under attack by break-out technology-driven alternatives.

Think about just a couple of examples:

  • Companies that specialise in the software and hardware to handle MICR encoded cheques are seeing their work drop rapidly as consumers move very rapidly away from cheques to direct transfers or BPay.  Now, Google and Facebook are both trying to position themselves to become “bankers”, enabling payments and money transfers worldwide.  Banking and finance are going to face increasing challenges to hold onto profitable business lines.
  • Uber, AirBNB and other similar ventures are all examples of real business model-breaking with hotel chains and taxi companies increasingly vociferous about this unforeseen competition.

Social disruption

Tony Abbott has unilaterally decided that there is no longer a debt and deficit disaster (or at least the scare campaign is not the way to sell it).  Most informed economists disagree with him drastically and dramatically.

Human services take up more than half the Federal budget and two thirds of most State budgets.  As demand for human services continues to ramp up, government finances become more constrained.  On current policy settings, Tasmania, South Australia and the Northern Territory are already structurally bankrupt.  The other States are not far behind.

Since the instinct of governments is always to provide inadequate funding and to then blame the service providers, all human services will need to learn how to do more work with less money and to be able to convince their communities that they are doing as well as the government will allow.  They will even have to actually improve their efficiency, productivity and accountability.

On the other hand ….

New models of business also open up opportunities for consulting work both in existing businesses seeking to become more agile and more profitable and in new businesses, most of which fail solely because they lack the skills infrastructure to back up their technological insight.

New social settings also offer opportunities for people who can spot what’s happening and proactively tell senior management and staff about the impending problems,  offering ideas and solutions to meet those problems (social disruption of failing economies will affect more than human services alone).

What does this imply for consulting?

Firstly, lower level consulting is a bad space to play in.  If your skills are reproducible on-line, you have a limited window of opportunity to change your model or learn to compete with low cost labour on the other side of the world.

Secondly, as a corollary, you need to be moving up the food chain to a point where your work has to be done face to face.

Thirdly, you need to be across what’s happening in the digital world. New models may always come as a surprise but the underlying technologies should be familiar.

Fourthly, you need to be intelligently aware of what is happening in the broader economy and the likely impacts of the underlying, and now largely unavoidable, trends.

Fifthly, you need …….. what?

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