SMEs: the backbone of UK economy
Small and medium sized businesses (SMEs) are the backbone of the UK economy. According to the Federation of Small Businesses (FSB), small businesses account for 99.3 per cent of all private sector businesses at the start of 2017 – a huge market potential for consultancies.
A UK government study of over 10,000 SMEs reports that almost half (49 per cent) of SME employers felt competition in the market, regulations and red tape were the major obstacles to the success of their business. This means that SME budgets are already tight in an attempt to keep competitive and plan for regulatory compliance. Coupled with a post-Brexit environment of uncertainty, consultancies need to ensure they solve business issues for SMEs as quickly as possible, bringing new products and services to the market at speed.
‘Big 4’ model not serving needs of SMEs
However, the traditional ‘Big 4’ consulting model is not catering to the needs of the SME community, as they have built a business model only affordable for a selective group of enterprise clients.
Recent research by Zeqr, an online employment platform, shows that there is a current lack of trust by SMEs around consultancy market. A third (36 per cent) of small businesses cite scepticism around expertise as a barrier to hiring an external consultancy. At the same time, every two in five small businesses find fixed fees to be inefficient and one of the major reasons for feeling dissatisfied by the service they received.
Winning back trust
Re-establishing trust within the SME community is essential for the consulting industry to survive. As a way forward we must change the traditional, one-size-fits-all consulting approach in favour for a bespoke solution that is competitive. To do that one needs to challenge the existing pricing models, and invent more efficient ways of working.
As an industry, we need to deploy a 21st century approach to consulting and abandon the Big 4, nostalgic model. By disrupting the way we price, scope and deliver consulting work, consultancies will stand by the side of start-ups, scale-ups and growth businesses.
21st century consulting
Firstly, we need to change the people who shape the consulting process, bringing in teams of ‘makers’ instead of ‘consultants.’ Currently, when it comes to building digital products and services, traditional consultancies tend to deploy generalist teams, massively undervaluing the role of design and the end user experience. Such engagements are most often over-represented by people with a business or an IT background. By building teams of talented cross-functional specialists, applying an ‘experience-first’ approach on product development, we ensure work is world-class both in technology and design.
Secondly, we need to re-define the client-consultant relationship by cutting the fat in client servicing, and inventing in new ways of working such as the ability to solve problems that would take weeks or months, in days. Working directly with the decision makers, and cutting out middle management is another way to build more efficient and straightforward relationships. In a fast moving digital economy businesses cannot afford long time to market pipelines in favour of bureaucracy and multiple approval layers.
Thirdly, we must change the way we price work moving away from charging for the amount of time and material produced, to value and performance based pricing models. This creates greater accountability on the quality of work produced, and enables work to be delivered in a shorter time period with a bigger ROI. It’s evident that pricing based on ‘time spent,’ billable hours goes against the universal search of finding faster ways to do things.
By moving away from traditional consultancy methods and focusing on a modern approach fit for today’s digital economy, we can keep things lean and produce tangible business outcomes for SMEs. We simply need to challenge and re-evaluate what a consultancy should look like to future-proof for the 21st century, and focus on making products and services a success.