Organization

How Companies Benefit from Using a Consulting Marketplace

Part 1

  • Dr. "Jack" Jörg Leib
  • September 17, 2021
Hire a consultant

Whether you lead your own company or manage a large corporation, occasionally you face situations in which you may consider seeking external advice. If you plan to enter a new market, acquire a competitor, or need to restructure your business, you may not have the required expertise in-house. The classic approach to overcoming such challenges is to hire a consulting firm, which then sends you a consulting team for the duration of the project.

Nowadays, consulting marketplaces such as COMATCH dramatically simplify the process of getting access to external expertise, offering an alternative option that is often cheaper and worth considering. This article summarizes the benefits that consulting marketplaces may offer to you as a corporate client.

Hiring a consulting firm vs. an independent consultant

If you hire a consulting team from a top consulting firm such as McKinsey, BCG, or Bain, you can expect high-quality service and gain access to a worldwide expert network. While convenient, this traditional option comes with some drawbacks: 

High price: Hiring a top-tier consulting firm is expensive. You can be sure that you will pay a premium price, both due to the brand and because consulting firm partners staffed on projects earn high salaries. 

Limited influence on team composition: You cannot always hand-pick the consultants you want to collaborate with, because by the time you start a project, they may have been committed to other projects. 

Rigid support schemes: While top consulting firms have established proven project management processes, they may be somewhat inflexible and unable to present the perfect fit for your individual challenge.

Limited number of available consultants: If you decide to hire a smaller boutique consulting firm, it may not have access to a large pool of available consultants.

For these reasons, the alternative option of hiring independent (or freelance) consultants has always been attractive. When you neither need senior partner expertise nor a consultant team, but rather a single knowledge expert or analytical mastermind, hiring one or two freelance consultants to complement your team may be sufficient. 

When contracting an individual instead of a company, you cut out all of the overhead leading to a significant reduction of consulting fees. If you hire an independent consultant, you have full control over which individual consultant you select, and it is easier to negotiate flexible terms of collaboration. For instance, you might prefer part-time support over the standard full-time support model.

Unfortunately, traditionally the search and transaction costs for a corporate client seeking a freelance consultant have been significant. There has been little transparency about available freelance experts in the market, and it has also been a challenge for independent consultants to make large corporate clients aware of their existence.

Benefits for corporate clients 

Consulting marketplaces, such as COMATCH, serve as brokers between corporate clients and freelance consultants. A marketplace invites independent professionals and industry experts to create profiles and describe their expertise on the platform. 

If a corporate client requires project support, they can inform the consulting marketplace about the target expert profile(s) required. The consulting platform then goes through its entire pool of registered freelance consultants to select and propose the most suitable candidates. COMATCH uses a proprietary matching algorithm to make this process more efficient, but the final decision is ultimately made by an account manager. Finally, the corporate client selects the most suitable expert profile(s). 

Consulting marketplaces significantly reduce the search and transactional costs on both sides, yielding several benefits for both you as a corporate client as well as freelance consultants, which include:

Significant cost savings: Compared to the premium prices charged by the top consulting firms, the brokerage fee charged by the marketplaces is moderate. The support of experienced consultants who have often been educated by the same top consulting firms is often much more affordable than directly hiring consulting teams from these firms. At the same time, freelance consultants can expect to earn a significantly higher income than employed consultants, making it a win-win-win for corporate clients, independent consultants, and marketplaces.

Simplified search process: Corporate clients need to explain their need and required expert profile(s) only once – the marketplace then identifies suitable experts from its network and invites them to apply for the project. At the same time, freelance consultants are (partially) unburdened from the need for self-promotion and proactive client acquisition.

Standardized processes: The consulting marketplaces offer negotiable, but transparent terms and conditions to both sides. They also standardize the temporary work contracts.

Furthermore, they retain all the general advantages of hiring a freelance consultant discussed earlier. While consulting firms with their all-around and premium services continue to play a significant role in the consulting markets, in many cases support from independent consultant(s) suits just as well, while being much more cost-efficient. Next time you hire consultants, you may want to keep this alternative option in mind!

 

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