Will every company be a consulting company?
As datasets become disconnected from their gatekeepers – think our financial data from our financial institutions – it will encourage more companies to think of themselves as consultancies and not just purveyors of the product or service they offer.
What is a consultancy? It's a professional practice serving as an advisor to clients. Consultants enter their client's world and try to understand their pain points to offer viable, workable solutions.
Tech solutions are becoming increasingly democratized. Before we dive deeper, it would be helpful to see how the phenomenon of open banking, a subset of open data, has encouraged businesses to take a strategic step towards playing consultant.
Every company will be a financial technology company
Angela Strange, general partner at a16z, believes that every company will be a fintech company. This is one step towards inhabiting the role of consultant. Companies are taking the initiative to serve their customers better by expanding outside their original niches – in this case, into financial services.
Businesses have a sole purpose: to transfer the value they create to their customers. Whether you're buying lunch at a local cafe or closing a 10-figure business deal for your business – it's all the same. The financial system exists to record and legitimize these transactions.
Every company sits atop a stack of financial technologies that enables the smooth, quick, and reliable transfer of monetary value. While the entire stack is immense, it can be distilled into a few fundamental layers: payments, fraud prevention and anti-money laundering, connecting bank accounts, regulatory and compliance, core systems, and increasing licenses. In 2021, companies solicit the services of several different providers to fulfill these requirements.
The innovation and competition among these financial technology layers is a testament to the force of open banking. Democratization of the banking process — slow and steady as it's been — enables us to unbundle financial technology. Competition drives the price down, accelerating market maturation and access.
With the financial tech stack becoming cheaper and more sophisticated — coupled with the general sentiment that consumers aren't enthused about their bank — there's a clear and direct signal to the market to disrupt traditional financial services.
Look no further than the following examples of firms jumping on this opportunity:
- The Apple card – a credit card powered by the iPhone
- The Uber Visa Debit Card – a debit card targeting Uber Drivers
- Grab – a rideshare turned super app offering financial services.
These examples of horizontal integration into the financial services by Apple, Uber, and their contemporaries illustrate why every company has the potential to become a consulting company. Build trust with your customers, and you'll arrive at a point where they continue to remain loyal.
Leverage trust and goodwill
Embrace your customers. There are quick wins to be made where 20% of the effort can reap 80% of the reward. One such initiative would be investing in your customer intelligence gathering function. Aside from a suitable CRM, pro-actively building customer profiles with permissioned data from their favored business apps has great upside with low cost.
A multi-dimensional view of your customers will better position you to understand their various pain points and frustrations. Companies become de facto consultants for their customers in that regard. You can secure the right partnerships and re-align your product or service offering to bolster your proposition.
The open data shift enables this. As API (application programming interfaces) technology matures, finance institutions and software manufacturers will remove the safeguards in place around access to the customer data they hold.
Simplifying procurement for your customers
Procurement of products and services is easier with fewer partners, as opposed to more stakeholders to consider. With trust and goodwill built over several purchases — or a working relationship nurtured over an extended period — customers will be more likely to take a chance on complementary product offerings.
This phenomenon has played out repeatedly, especially when companies with growth ambitions outgrow their niche. Take the example of Apple who started with desktop computers. Based on in-depth knowledge of their customers' wants and needs, Apple strategically tacked towards delivering music players with the iPod. A few years later, they unveiled the iPhone — and we all know the success story there. Apple, in a sense, behaved like consultants for their customer base.
For a B2B example, look no further than Microsoft. Starting with a computer operating system, they transitioned into all manner of hardware and software markets. Microsoft's influence is so pervasive that for many people, what seals the buying decision for their business is simply that Microsoft developed it.
How can your business take advantage?
While few have the scale or resources that Apple and Microsoft have, the global open data shift unleashes the potential for every business to behave like consultants. As software companies unlock access to data they are holding, there will be more room for innovation and design disruption. Wish you meet the nuanced needs of your customers? With each passing day, developments in open data capabilities will make this a reality.
Talk to us about how you can leverage open data in your business.