Today’s clients are faced with a dizzying variety of options when it comes to buying professional services. While the industry is still dominated by a handful of big firms, they are no longer the default option they once were, writes Fergus Blair of Source Global Research...
This is the first in a series of blogs that explores some of the newer businesses and platforms seeking to turn the industry on its head—and whether your firm needs to worry about the new competition.
Who are COMATCH?
Founded in Germany in late 2014 by a pair of ex-McKinseyites, COMATCH has only been around for half a decade—but in that time has expanded rapidly, and now operates across much of Europe, the UK, and the Middle East. And in 2019 they opened an office in New York, their first in the US.
COMATCH’s concept is straightforward. Through their online marketplace, they provide clients with access to a curated network of independent consultants—all of whom have either an industry track record or at least two years’ experience at a consulting firm, auditor, or investment bank. Prospective buyers simply fill in an online form with details of their project needs, and COMATCH sends them back the CVs of consultants who might be a good fit. At the time of writing, there are over 10,000 independent consultants in COMATCH’s talent pool.
The idea of staffing projects using freelance resources is not particularly innovative; there are firms like Eden McCallum that have been operating for decades whose entire business model is built around this concept. But what is new is the idea of giving clients direct access to a digital marketplace through which they can find their own consulting resources, stripping out the middleman entirely. In this respect, COMATCH shares DNA with some of the other “talent-on-demand” services that have carved out a niche for themselves in recent years. Movemeon, Catalant, Malt; all of these platforms offer the promise of ready access to high-quality independent consultants, without the overheads associated with large, multinational firms.
While COMATCH has chosen to focus on the consulting space—providing clients with access to project managers and subject matter experts—other such marketplaces focus on different types of service provider. Whatever type of freelance professional you need to find, there’s probably an on-demand service out there you can get them through.
Why do you need to know about them?
Like it or not, contract resources are coming to play an increasingly important role in how clients access professional services. Going freelance is an attractive proposition for many consultants at the mid-points of their careers; and the more services like COMATCH that exist (and the more sophisticated these services become), the easier it will be for them to find work. COMATCH is a classic example of a company using network effects to its advantage, much like Facebook did in its early days: Every additional consultant that becomes a member of the COMATCH community makes that community more attractive to clients and helps to attract more of them, creating a virtuous cycle.
And a savvy client can extract a great deal of value from working with freelancers. There are the obvious cost benefits, of course. But beyond this, many clients simply prefer the experience of working with independent consultants. Bring in a team from a strategy house or one of the Big Four, and most of the actual delivery work will be carried out by relatively junior analysts. You might, if you’re lucky, get 10% of the lead partner’s time—they’ll have to slot you in around all of their other projects and whichever internal affairs they have responsibility for at their firm. But use a service like COMATCH, and you can find an outside adviser with a similar level of experience and get 90% of their time and attention.
None of this is to say that these marketplaces will ever compete with established firms as a one-to-one replacement for their core services. If you’re a buyer and you need one or two experts or managers to fill resource gaps on a project, then COMATCH looks like a great option; if you need a dozen or more analysts at a variety of different grades, then not so much. Big, complex, and resource-intensive projects will likely remain the domain of the traditional professional services firm.
What may happen, however, is that as talent-on-demand services become more common, clients will become more willing to run projects in-house. There are already sectors (financial services, for example), where client organisations have been building up internal consulting capability in the last few years. And being able to quickly and reliably plug resource gaps on any given project team would take a lot of risk out of internal delivery. So while the established firms will not be, in the strictest sense, competing directly against companies like COMATCH, the existence of such marketplaces could nevertheless have an impact on the size of their market.
How can your firm stay competitive?
Seeing the rise of COMATCH and its ilk, some firms have chosen to try to get in on the act themselves. The Big Four all now have some sort of equivalent offering; Deloitte’s “Open Talent Community”, for example, allows the firm to tap into a pool of freelancers to find specialist expertise that it wouldn’t be economically viable to keep in-house. However, building and maintaining a high-quality network of independent experts is no easy task; realistically, only the largest firms will have the technical resources and the manpower to do so.
Fortunately, there are still opportunities for small and mid-sized firms to eke out a competitive advantage from the rise of the professional gig economy. Some firms have already started to incorporate companies like COMATCH into their own delivery processes: still staffing projects using primarily their in-house consultants, but peppering them with freelance specialists to create more effective and diverse teams.
In the future, some firms may even decide to open up strategic partnerships with these talent-on-demand platforms. One could imagine a symbiotic relationship emerging: talent marketplaces provide firms with low-cost access to their resource pools, and in return those firms help them reach new clients, and sometimes even assist in the vetting and authentication of independent consultants. We would not be at all surprised to see some creative collaborations take shape in the near future—collaborations that create value for clients, service providers, and platforms alike.