Is independent consulting dead?

Chip Camden thinks the reports of independent consulting being dead are exaggerated, though he concedes that there are greater obstacles to getting work.

ZDNet blogger Jason Perlow recently posed that question based on the recent demise of the Independent Computer Consultants Association (ICCA), which cited declines in revenue for its members as a major cause of its closure. Perlow goes on to assert that independents are having a tougher time competing for jobs. I think the reports of our death are exaggerated, but we do face the following ongoing threats, which the economic distractions of our time have amplified:

  • Price. Perlow mentions "insanely low hourly or per diem rates" being offered for work these days. I've seen that, too, especially on sites that broker contracts. Now more than ever before inexpensive and relatively skilled labor from Russia, India, and anywhere else on the globe can easily bid against you for jobs at rates that you can't accept in order to keep your business afloat. You have to justify your price by offering a convincing value proposition; you need to provide something that the $15 an hour offshore developer can't do. Even that might not get you a specific job -- some gigs are only looking for the cheapest alternative -- but it will find a market that the low-cost alternatives can't touch.
  • Name. If a prospect is shopping for safety instead of price (astutely recognizing that risk has its own costs), then they're likely to favor a name they can know and think they can trust. If you're competing against IBM or Accenture for that business, you've got a big hill to climb, but there are at least three ways to succeed here: (1) build an even stronger reputation than the big names have in your consulting niche, (2) argue that you can be more lean, agile, and responsive while possessing equivalent skills, and (3) build long-term relationships that bring more to the table than just your technical skills.
  • Gatekeepers. More firms are using hiring agencies to find contract work, so the people asking the questions often possess a poor understanding of the client's needs. At best, they add a translation layer to the conversation that denies you the opportunity to engage the prospect and demonstrate your worth by asking the right questions. Everything except a laundry list of qualifications and your price tag gets filtered out in the translation. Face it: You're not going to get that work, and if you do, you'll regret it.

Despite these obstacles, I've experienced an uptick in demand over the last year, and I've raised my rates accordingly. But I was never a member of the ICCA, so my success or failure was never a factor in theirs. Perhaps the closure of the ICCA indicates a shakedown in the industry but not its demise. Maybe those membership dues weren't providing an equivalent value in return for a lot of members, and leaner times require trimming the fat from your business.

Now more than ever, independents need to concentrate on putting our money where it counts and providing exceptional value to clients in order to compete.

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