Subscription Options

January 8, 2009

A recession proof consultancy

This is probably the best time to be out there selling professional services and other consulting activities. There is a lot of pain out there and there are a lot of companies who need our help more than at any time in the past.

As many companies shift their focus from growth to cost reduction, there are many areas where we can help clients to continue to surge even in hard times.

Outsourcing is the king of recession proof service offerings. The bottom line is that it provides companies with access to specialized labor and abilities at a reduced price.

There isn't a company in the world who is not asking itself how they can better source services and labor. Not one. Reports of the death of outsourcing come and go, but it is clearly something that is a part of business fo the very long term.

As a local provider of services you and your company are in pole position to take advantage of this dramatic shift in the marketplace. Outsourcing is not off shoring.

There are two distinct models of outsourcing. The "more efficient" model, where per person costs are similar but your company is able to do it with less people. And there is the centralizing model; where you provide services to a range of companies through a centralized pool of specialists and experts.

I am very fond of both models, but more fond of the second style.

The Centralizing Model

The basic concept is that every department or function requires a group of skill sets. Some people are good at one or two of these, but never good at all of them. So using the employee approach companies are forced to hire more people than they need in order to get coverage of all skill types.

The result. Underutilized people, or worse, people having to stretch into areas where they have little real understanding. A key cause of human error.

Within a centralizing model, however, this fact works as an advantage.

A HR department, say, will have a need for succession planning, talent development, recruitment and induction, policy development and enforcement and the payroll function often associated with HR.

A consultancy delivering these functions from a centralized location is able to leverage the underutilization of their people to deliver services for other companies also. Thus giving all clients access to exactly the skills they require, at the time they require, and allowing each employee to be more fully utilized.

A profitable model 

A second issue, and one that wasn't even thought of three years ago. The SaaS revolution of the past few years. With online systems cheaply and readily available, the ability for a centralized consultancy to manage processes, and for the client to maintain an involvement, is dramatically increased.

Like anything else, it is all about creativity and imagination. The outsourcing market is a gigantic area which is currently serviced only by giants. Yet, it is an area that could easily be tapped into by mid sized consultants with a bit of guts and innovative use available technologies.